RB Global (RBA)

Commercial asset marketplace RB Global (NYSE:RBA) beat Wall Street’s revenue expectations in Q3 CY2025, with sales up 11.3% year on year to $1.09 billion. Its non-GAAP profit of $0.93 per share was 17.3% above analysts’ consensus estimates.

Company Overview

Born from the 1958 founding of Ritchie Bros. Auctioneers and rebranded in 2023, RB Global (NYSE:RBA) operates global marketplaces that connect buyers and sellers of commercial assets, vehicles, and equipment across multiple industries.

Like in other industries, the shift to online platforms can lower transaction costs and improve liquidity for sellers. Increasing digitization, AI-driven pricing analytics, and automation in logistics can enhance efficiency for operators who invest in technology and software. On the other hand, challenges include potential regulatory scrutiny on auction transparency, data privacy concerns with AI-driven valuation models, and shifting environmental policies that could impact the resale market for internal combustion vehicles. Additionally, supply chain volatility in new car production may create unpredictable swings in used vehicle supply, impacting auction volumes.

RB Global's primary competitors include Copart, Inc. (NASDAQ:CPRT), which specializes in online vehicle auctions and remarketing services, Total Resource Auctions (a subsidiary of Cox Enterprises), and various independent auction companies that focus on damaged vehicles and commercial equipment.

A company’s long-term performance is an indicator of its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years.

With $4.53 billion in revenue over the past 12 months, RB Global is a mid-sized business services company, which sometimes brings disadvantages compared to larger competitors benefiting from better economies of scale. On the bright side, it can still flex high growth rates because it’s working from a smaller revenue base.

As you can see below, RB Global’s 27.8% annualized revenue growth over the last five years was incredible. This is a great starting point for our analysis because it shows RB Global’s demand was higher than many business services companies.

We at StockStory place the most emphasis on long-term growth, but within business services, a half-decade historical view may miss recent innovations or disruptive industry trends. RB Global’s annualized revenue growth of 21.2% over the last two years is below its five-year trend, but we still think the results suggest healthy demand.

This quarter, RB Global reported year-on-year revenue growth of 11.3%, and its $1.09 billion of revenue exceeded Wall Street’s estimates by 3.4%.

Looking ahead, sell-side analysts expect revenue to grow 2.4% over the next 12 months, a deceleration versus the last two years. This projection is underwhelming and implies its products and services will face some demand challenges. At least the company is tracking well in other measures of financial health.

Operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses – everything from the cost of goods sold to advertising and wages. It’s also useful for comparing profitability across companies with different levels of debt and tax rates because it excludes interest and taxes.

RB Global has been an efficient company over the last five years. It was one of the more profitable businesses in the business services sector, boasting an average operating margin of 17%.

Looking at the trend in its profitability, RB Global’s operating margin decreased by 1.7 percentage points over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability.

This quarter, RB Global generated an operating margin profit margin of 14.5%, down 1.1 percentage points year on year. This reduction is quite minuscule and indicates the company’s overall cost structure has been relatively stable.

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

RB Global’s EPS grew at an astounding 18.7% compounded annual growth rate over the last five years. However, this performance was lower than its 27.8% annualized revenue growth, telling us the company became less profitable on a per-share basis as it expanded.

Diving into RB Global’s quality of earnings can give us a better understanding of its performance. As we mentioned earlier, RB Global’s operating margin declined by 1.7 percentage points over the last five years. Its share count also grew by 69.5%, meaning the company not only became less efficient with its operating expenses but also diluted its shareholders.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

For RB Global, its two-year annual EPS growth of 16.7% was lower than its five-year trend. We still think its growth was good and hope it can accelerate in the future.

In Q3, RB Global reported adjusted EPS of $0.93, up from $0.71 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects RB Global’s full-year EPS of $3.84 to grow 9.2%.

Although earnings are undoubtedly valuable for assessing company performance, we believe cash is king because you can’t use accounting profits to pay the bills.

RB Global has shown terrific cash profitability, enabling it to reinvest, return capital to investors, and stay ahead of the competition while maintaining an ample cushion. The company’s free cash flow margin was among the best in the business services sector, averaging 15.3% over the last five years.

Taking a step back, we can see that RB Global’s margin dropped by 5.1 percentage points during that time. If its declines continue, it could signal increasing investment needs and capital intensity.

RB Global’s free cash flow clocked in at $188.5 million in Q3, equivalent to a 17.3% margin. The company’s cash profitability regressed as it was 6 percentage points lower than in the same quarter last year, but it’s still above its five-year average. We wouldn’t put too much weight on this quarter’s decline because investment needs can be seasonal, causing short-term swings. Long-term trends are more important.

EPS and free cash flow tell us whether a company was profitable while growing its revenue. But was it capital-efficient? A company’s ROIC explains this by showing how much operating profit it makes compared to the money it has raised (debt and equity).

Although RB Global has shown solid business quality lately, it historically did a mediocre job investing in profitable growth initiatives. Its five-year average ROIC was 10.8%, somewhat low compared to the best business services companies that consistently pump out 25%+.

We like to invest in businesses with high returns, but the trend in a company’s ROIC is what often surprises the market and moves the stock price. Unfortunately, RB Global’s ROIC has decreased significantly over the last few years. If its returns keep falling, it could suggest its profitable growth opportunities are drying up. We’ll keep a close eye.

RB Global reported $753.3 million of cash and $4.16 billion of debt on its balance sheet in the most recent quarter. As investors in high-quality companies, we primarily focus on two things: 1) that a company’s debt level isn’t too high and 2) that its interest payments are not excessively burdening the business.

With $1.37 billion of EBITDA over the last 12 months, we view RB Global’s 2.5× net-debt-to-EBITDA ratio as safe. We also see its $89 million of annual interest expenses as appropriate. The company’s profits give it plenty of breathing room, allowing it to continue investing in growth initiatives.

It was good to see RB Global beat analysts’ EPS expectations this quarter. We were also glad its revenue outperformed Wall Street’s estimates. Zooming out, we think this quarter featured some important positives. The stock remained flat at $97 immediately after reporting.

Updated: December 4, 2025 at 11:14 PM EST

Are you wondering whether to buy RB Global or pass? We urge investors to not only consider the latest earnings results but also longer-term business quality and valuation as well.

There are several reasons why we think RB Global is a great business. First of all, the company’s revenue growth was exceptional over the last five years. And while its diminishing returns show management's recent bets still have yet to bear fruit, its powerful free cash flow generation enables it to stay ahead of the competition through consistent reinvestment of profits. Additionally, RB Global’s impressive operating margins show it has a highly efficient business model.

RB Global’s P/E ratio based on the next 12 months is 24x. Looking across the spectrum of business services companies today, RB Global’s fundamentals shine bright. We like the stock at this price.

Wall Street analysts have a consensus one-year price target of $123.80 on the company (compared to the current share price of $98.23), implying they see 26% upside in buying RB Global in the short term.