RBC Bearings heads into its May 15 earnings release with options traders showing unusually strong conviction on the upside — a notable tilt given the stock trades at a lofty premium.
The clearest positioning signal is a sharp shift in options sentiment. The put/call ratio has dropped to 0.72, more than two standard deviations below its 20-day average of 0.85 — meaning calls are dominating the options market by the most in months, well below even the 52-week low of 0.22 on a relative basis. That's an unusually bullish lean heading into the print. It follows a solid month for the stock, which has added 2.6% over the past month and 3.5% in the last week, closing at $613.59. Peer performance has been more mixed: TKR gained 6% on the week while OSK fell more than 10%, suggesting sector tailwinds are flowing selectively.
Short interest is too small to drive the story here. At under 1% of the free float, bearish positioning through the lending market is minimal. Cost to borrow has eased roughly 11% over the past week to 0.32%, and availability remains ample — the borrow market offers no meaningful squeeze risk in either direction. The ORTEX short score of 28.6 is consistent with a low-conviction short thesis. What is notable is a 27% rise in short shares over the past month, albeit from a very low base, which bears watching if it continues after the print.
Bulls point to genuine operational momentum. The most recent quarter showed revenue up 7.3% year-over-year to $436 million, with gross margins at 45.4% — among the strongest in the industrial machinery peer group. The backlog reportedly stood at $1.6 billion, up 86% year-over-year. EPS growth of 26% in the prior period beat estimates, and EPS momentum scores rank in the 82nd percentile on a 90-day basis. Keybanc has repeatedly raised its target, most recently to $680 in March, maintaining an Overweight rating. Bears focus on the valuation: RBC trades at roughly 41x trailing earnings and an EV/EBITDA of about 28x, expensive multiples that leave limited margin for disappointment. The bear case also flags guidance risk — revenue guidance falling short of consensus has been a past pattern — and the lingering complexity of integrating the Dodge acquisition. Goldman Sachs maintained a Neutral rating as recently as mid-2025, a position that acknowledged the quality of the business while questioning whether the price already reflects it.
The last two confirmed earnings events produced one-day moves of roughly 5.3–5.4% and five-day moves of 6.2–6.5% on the upside, suggesting the stock has rewarded beats with meaningful rallies. The May 15 print will therefore test whether execution at this margin level — and any revision to full-year guidance — can justify a valuation that has well outpaced even the most bullish analyst targets of a year ago.
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