Ralliant Corp

Where It Passes

Where It Falls Short

• Profitability0% pass✓ 1✗ 34▾

  No clean pass — all 16 investors flag at least one profitability criterion

  Positive EPS (10 years)2/4 years positive

  ✗GrahamPositive EPS every year for 10 years

  EPS Growth (3-yr avg, 10-yr window)

  ✗Graham>= 33% growth

  Net Income Positive (10+ years)2/4 years positive

  ✗BuffettPositive every year for 10+ years

  ROE (up to 5-year arithmetic mean)-15.6%

  ✗Buffett> 15% arithmetic mean (app rule)

  Operating Margin (10-yr trend)

  ✗BuffettStable or rising over 10 years

  Free Cash Flow Proxy$-1.1B

  ✗BuffettPositive and growing

  Earnings Variance (10-yr CoV)

  ✗BuffettCoV < 0.3

  Retained Earnings Effectiveness

  ✗Buffett$1 retained -> > $1 market value created

  Basic earnings-growth PEG (dividends excluded)

  ✗Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR

  ✗Lynch15-30% (Fast Grower); > 0% to pass

  ROE-73.4%

  ✗Lynch> 15%

  EBIT / Enterprise Value-13.1%

  ✗Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=-13.1%, ROC=-386.0%

  ✗GreenblattBoth EY > 10% and ROC > 25%

  Net Income / Total Assets-31.99%

  ✗PiotroskiROA > 0

  ROA Change YoY7.51% -> -31.99% (delta: -39.50%)

  ✗PiotroskiCurrent ROA > Prior ROA

  (CFO / Total Assets) vs ROACFO/Assets=10.40%, ROA=-31.99%

  ✓PiotroskiCFO/Assets > ROA

  Gross Margin Change YoY51.6% -> 50.3%

  ✗PiotroskiImproved YoY

  Pre-Tax Income / Revenue-50.9%

  ✗Dreman>= 8%

  Net Income / Shareholders' Equity-73.4%

  ✗Dreman> 12%

  Margin of SafetyP/B=4.7x

  ✗PabraiP/B < 1.5 or P/E < 15

  Return on Equity-15.6% (3-yr avg)

  ✗AkreROE > 20% (3-year avg)

  Discount to Intrinsic ValueN/A (negative normalized EPS)

  ✗Marks>= 20% below intrinsic value

  Positive Net Income Frequency2/3 years positive

  ✗MarksPositive net income in >= 7 of last 10 years

  Operating Income / Revenue-48.3%

  ✗Ackman>= 15%

  Net Income / Shareholders Equity-73.4%

  ✗Ackman>= 15%

  5-Year EPS CAGR

  ✗Templeton> 0% (5-year EPS CAGR)

  Operating Margin Trend23.7% (2023) -> -57.2% (2025)

  ✗TempletonNon-negative operating-margin trend over 3 years

  Revenue growth vs. gross and operating margin trendgross margin 51.9% -> 50.3%, operating margin 23.7% -> -57.2%

  ✗SleepRevenue rising; gross margin flat or falling; operating margin holding

  Net income / market capitalization-15.57%; #4406/6340 (top 69.5%)

  ✗AsnessTop 30% of eligible cross-section✗OshaughnessyTop 10% of eligible cross-section

  Gross profit / total assets+30.83%; #1382/3702 (top 37.3%)

  ✗AsnessTop 30% of eligible cross-section

  Net income / positive book equity-73.39%; #4432/5226 (top 84.8%)

  ✗AsnessTop 30% of eligible cross-section

  Negative 5-year standard deviation of ROA

  ✗AsnessTop 30% of eligible cross-section

  3-5 Year Diluted EPS CAGR

  ✗Neff7%-20% annualized

  Positive Diluted-EPS Years

  ✗Schloss>= 70% positive over 5-10 observed years (app rule)
• Growth0% pass✗ 13▾

  All 8 investors flag RAL's growth

  EPS Growth (3-yr avg, 10-yr window)

  ✗Graham>= 33% growth

  Basic earnings-growth PEG (dividends excluded)

  ✗Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR

  ✗Lynch15-30% (Fast Grower); > 0% to pass

  Inventory Growth vs Revenue GrowthInv: 6.6% vs Rev: -4.0%

  ✗LynchInventory growth < Revenue growth

  EPS Growth Direction$3.70 (2023) -> $-10.84 (2025)

  ✗DremanPositive over recent years

  EPS CAGR

  ✗Dreman> 5% annualized

  Positive Net Income Frequency2/3 years positive

  ✗MarksPositive net income in >= 7 of last 10 years

  3yr Median Revenue Growth-2.0%

  ✗Ackman>= 5%

  Positive EPS Growth Frequency0/2 years with positive EPS growth

  ✗AckmanPositive EPS growth in >= 3 of last 5 years

  5-Year EPS CAGR

  ✗Templeton> 0% (5-year EPS CAGR)

  Revenue growth vs. gross and operating margin trendgross margin 51.9% -> 50.3%, operating margin 23.7% -> -57.2%

  ✗SleepRevenue rising; gross margin flat or falling; operating margin holding

  5-year Revenue CAGR

  ✗SleepCAGR > 7%

  3-5 Year Diluted EPS CAGR

  ✗Neff7%-20% annualized
• Valuation models0% pass✗ 3▾

  RAL overvalued: all 3 models price fair value below $68.73 (median $30.06)

  Munger fair value$30.06

  ✗Munger-128.6% margin vs $68.73

  Akre fair value$20.81

  ✗Akre-230.3% margin vs $68.73

  Ackman fair value$32.77

  ✗Ackman-109.7% margin vs $68.73
• Valuation8% pass✓ 1✗ 27▾

  12 of 13 flag RAL's valuation — Graham, Lynch, Greenblatt +9 more

  Price / 3-yr avg EPS

  ✗Graham<= 15x

  Price-to-Book Ratio4.7x

  ✗Graham<= 1.5x

  P/E x P/B

  ✗Graham<= 22.5

  Basic earnings-growth PEG (dividends excluded)

  ✗Lynch< 1.0 (ideally < 0.5)

  EBIT / Enterprise Value-13.1%

  ✗Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=-13.1%, ROC=-386.0%

  ✗GreenblattBoth EY > 10% and ROC > 25%

  Price / EPS

  ✗Dreman< 12x✗Templeton< 12x (fixed ceiling; proxy for the market's cheapest 40%)

  Price / (CFO / Shares)19.3x

  ✗Dreman< 8x

  Price / Book Value per Share4.7x

  ✗Dreman< 1.2x✗Templeton< 1.5x✗SchlossP/B <= 0.80x (app cutoff)

  Valuation ReasonablenessOE Yield=-14.9%

  ✗MungerP/E < 25 or Owner Earnings Yield > 5%

  P/E or FCF YieldFCF Yield=4.7%

  ✗PabraiP/E < 15 or FCF Yield > 10%

  P/B or P/E vs. Historical AverageP/B=4.7x

  ✗MarksP/E < 15 or P/B < 2.0

  Discount to Intrinsic ValueN/A (negative normalized EPS)

  ✗Marks>= 20% below intrinsic value

  Price / FCF per Share21.4x

  ✓Ackman<= 25

  Price vs. Trailing Low165% of trailing low ($41.59)

  ✗Templeton<= 120% of trailing low (certified split-adjusted live window)

  Net income / market capitalization-15.57%; #4406/6340 (top 69.5%)

  ✗AsnessTop 30% of eligible cross-section✗OshaughnessyTop 10% of eligible cross-section

  Positive book equity / market capitalization+0.2121; #4131/6449 (top 64.1%)

  ✗AsnessTop 30% of eligible cross-section

  Price / Diluted EPS

  ✗NeffP/E <= 15x (app proxy for a P/E 40%-60% below the market)

  (EPS CAGR % + Dividend Yield %) / P/E

  ✗Neff> 0.7 (Neff's published traditional edge)

  Price / Tangible Book Value per ShareN/A (non-positive TBVPS)

  ✗SchlossP/TBV <= 1.00x (app cutoff)

  Book Value per Share Change

  ✗SchlossLatest BVPS >= earliest BVPS over >= 3 years (app rule)

  Revenue / market capitalization+0.2988; #3337/5247 (top 63.6%)

  ✗OshaughnessyTop 10% of eligible cross-section

  (Operating cash flow - capex) / market capitalization+3.98%; #1799/4519 (top 39.8%)

  ✗OshaughnessyTop 10% of eligible cross-section

  Trailing six-month price return through the evaluation date+51.25%; #635/6202 (top 10.2%)

  ✗OshaughnessyTop 10% of eligible cross-section
• Efficiency13% pass✓ 2✗ 9▾

  7 of 8 flag RAL's efficiency — Graham, Buffett, Greenblatt +4 more

  Current Ratio1.65

  ✗Graham>= 2.0

  ROIC (3-5 yr avg)-14.1%

  ✗Buffett> 10%

  ROIC - WACC-24.1%

  ✗BuffettPositive (WACC = 10%)

  EBIT / (NWC + Net Fixed Assets)-386.0%

  ✗Greenblatt> 25%

  Current Ratio Change YoY1.16 -> 0.84

  ✗PiotroskiIncreased YoY

  Revenue / Total Assets Change YoY0.46x -> 0.54x

  ✓PiotroskiImproved YoY

  Current Assets / Current Liabilities1.65

  ✓Dreman> 1.5

  Return on Invested Capital-31.4%

  ✗Munger> 15%

  ROIC (high and growing)FY2023: ROIC=unavailable; FY2024: ROIC=9.6%; FY2025: ROIC=-33.6%

  ✗AkreLatest 3 consecutive FYs: ROIC > 15% in each

  Reinvestment Rate x ROICN/A (non-positive net income)

  ✗AkreReinvestment Rate * ROIC > 10%

  ROIC (5-year)0/2 years above 12% (latest -33.6%)

  ✗SleepROIC > 12% in a majority of years
• Verdicts13% pass✓ 2✗ 14▾

  Split decision: 13 FAIL · 2 PASS · 1 NEUTRAL

  Overall verdict

  ✗GrahamFAIL (1/9)✗BuffettFAIL (0/9)✗LynchFAIL (0/7)✗GreenblattRank #2716✓PiotroskiPASS (F-Score 4)✗DremanFAIL (3/11)✗MungerFAIL (1/4)✗PabraiFAIL (0/3)✗AkreFAIL (1/6)✗MarksFAIL (1/5)✗AckmanFAIL (3/9)✗TempletonFAIL (2/8)✓SleepPASS (3/6)•AsnessNEUTRAL (Not ranked)✗NeffFAIL (2/6)✗SchlossFAIL (2/7)✗OshaughnessyFAIL (Rank #725/963 (Top 75.3%))
• Debt & Leverage33% pass✓ 6✗ 9▾

  8 of 12 flag RAL's debt & leverage — Graham, Buffett, Lynch +5 more

  LT Debt vs Net Current AssetsLT Debt $1.1B vs NCA $436.8M

  ✗GrahamLT Debt <= Net Current Assets

  Debt/Equity & Interest CoverageD/E: 0.71, IC: -19.0x

  ✗BuffettD/E < 0.5 AND Interest Coverage > 5x

  Total Debt / Equity0.71

  ✗Lynch< 0.33

  Cash - Long-term Debt$-782.9M

  ✗LynchPositive preferred

  LT Debt / Total Assets Change0.00% -> 16.18%

  ✗PiotroskiDecreased YoY

  Current Assets / Current Liabilities1.65

  ✓Dreman> 1.5✓SchlossCurrent ratio >= 1.50x (app cutoff)

  Total Debt / Shareholders' Equity0.71

  ✓Dreman< 0.8✓Templeton< 1.0 (fixed cap; proxy for below-sector-median leverage)✓SchlossD/E < 1.00x

  Debt Levels0.71

  ✗MungerDebt/Equity < 0.5✗AkreDebt/Equity < 0.3

  Interest Coverage & Debt/EBITDAIC=-19.0x, D/EBITDA=N/A

  ✗MarksInterest Coverage > 3x; Debt/EBITDA < 4x

  Total Debt / Shareholders Equity0.71

  ✓Ackman<= 1.0

  Negative debt-to-equity (higher means less debt)-0.7106; #2864/4210 (top 68.0%)

  ✗AsnessTop 30% of eligible cross-section
• Cash Flow40% pass✓ 6✗ 6▾

  6 of 10 flag RAL's cash flow — Buffett, Lynch, Dreman +3 more

  Free Cash Flow Proxy$-1.1B

  ✗BuffettPositive and growing

  FCF Positive and Growing$358.4M

  ✗LynchPositive and growing

  Operating Cash Flow$397.6M

  ✓PiotroskiCFO > 0

  (CFO / Total Assets) vs ROACFO/Assets=10.40%, ROA=-31.99%

  ✓PiotroskiCFO/Assets > ROA

  Price / (CFO / Shares)19.3x

  ✗Dreman< 8x

  P/E or FCF YieldFCF Yield=4.7%

  ✗PabraiP/E < 15 or FCF Yield > 10%

  FCF Positive3/3 years FCF positive

  ✓MarksPositive FCF in majority of recent years

  (OCF - CapEx) / Market Cap3.9%

  ✗Ackman>= 4%

  Price / FCF per Share21.4x

  ✓Ackman<= 25

  Positive Operating Cash Flow frequency3/3 years positive

  ✓SleepPositive OCF in >= 70% of available years

  Operating Cash Flow - Capital Expenditures$303.0M

  ✓Neff> $0 (app proxy for a strong fundamental case)

  (Operating cash flow - capex) / market capitalization+3.98%; #1799/4519 (top 39.8%)

  ✗OshaughnessyTop 10% of eligible cross-section