Should You Investigate RB Global, Inc. (NYSE:RBA) At US$72.90?

Let's talk about the popular RB Global, Inc. (NYSE:RBA). The company's shares saw its share price hover around a small range of US$70.80 to US$77.33 over the last few weeks. But is this actually reflective of the share value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at RB Global’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

View our latest analysis for RB Global

What Is RB Global Worth?

RB Global appears to be expensive according to our price multiple model, which makes a comparison between the company's price-to-earnings ratio and the industry average. We’ve used the price-to-earnings ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 43.74x is currently well-above the industry average of 26.56x, meaning that it is trading at a more expensive price relative to its peers. Furthermore, RB Global’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. If you believe the share price should eventually reach levels around its industry peers, a low beta could suggest it is unlikely to rapidly do so anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range.

What does the future of RB Global look like?

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. RB Global's earnings over the next few years are expected to increase by 90%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? It seems like the market has well and truly priced in RBA’s positive outlook, with shares trading above industry price multiples. However, this brings up another question – is now the right time to sell? If you believe RBA should trade below its current price, selling high and buying it back up again when its price falls towards the industry PE ratio can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping tabs on RBA for some time, now may not be the best time to enter into the stock. The price has surpassed its industry peers, which means it is likely that there is no more upside from mispricing. However, the positive outlook is encouraging for RBA, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

If you'd like to know more about RB Global as a business, it's important to be aware of any risks it's facing. Every company has risks, and we've spotted 2 warning signs for RB Global you should know about.

If you are no longer interested in RB Global, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.