Investment Thesis
Rockwell Automation demonstrates solid profitability with healthy gross and operating margins (48.3% and 20.7%), but growth has stalled with revenue and net income essentially flat YoY (+0.9% and +0.2%). The company maintains reasonable financial health with adequate liquidity (1.16x current ratio) and manageable leverage (0.69x D/E), though free cash flow generation of $170M represents modest conversion from operations.
ROK Strengths
- Strong operating margins of 20.7% and gross margins of 48.3% indicate pricing power and operational efficiency
- Solid free cash flow generation of $170M with 8.1% FCF margin supports dividend and debt service capacity
- Manageable debt-to-equity ratio of 0.69x and healthy interest coverage of 6.0x provide financial flexibility
- Sufficient cash reserves of $444M provide operational cushion
ROK Risks
- Revenue growth stalled at only +0.9% YoY, indicating market maturity or demand weakness in core industrial automation segment
- EPS declining 7.4% YoY despite flat net income suggests share dilution or adverse mix shifts
- Quick ratio of 0.80x falls below 1.0x threshold, signaling potential short-term liquidity pressure
- Low ROE of 8.1% and ROA of 2.7% suggest capital efficiency deterioration relative to asset base of $11.2B
- Operating cash flow of $234M covers capex but leaves limited margin for growth investments or shareholder returns
Key Metrics to Watch
- Revenue growth trajectory - must accelerate above 2-3% to justify valuations
- Operating margin sustainability - monitor for erosion from competitive or cost pressures
- Free cash flow conversion and capital allocation decisions
- Return on equity trends - improvement critical given 8.1% current level
- Order backlog and pipeline indicators for forward growth visibility
ROK Financial Metrics
ROK Profitability Ratios
ROK Balance Sheet & Liquidity
ROK 5-Year Financial Trend
5-Year Trend Summary: ROCKWELL AUTOMATION, INC's revenue has grown significantly by 29% over the 5-year period, indicating strong business expansion. The most recent EPS of $11.95 reflects profitable operations.
ROK Growth Metrics (YoY)
ROK Quarterly Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q1 2026 | $1.9B | $184.0M | $1.61 |
| Q3 2025 | $2.1B | $232.0M | $2.02 |
| Q2 2025 | $2.0B | $252.0M | $2.22 |
| Q1 2025 | $1.9B | $184.0M | $1.61 |
| Q3 2024 | $2.1B | $232.0M | $2.02 |
| Q2 2024 | $2.1B | $266.2M | $2.31 |
| Q1 2024 | $2.0B | $215.2M | $1.86 |
| Q3 2023 | $2.0B | $297.9M | $2.55 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
ROK Capital Allocation
ROK SEC Filings
Access official SEC EDGAR filings for ROCKWELL AUTOMATION, INC (CIK: 0001024478)