Ralliant Corp.

Ralliant’s operating margin is negative 57.2%, and the stock still carries a $70 18-month target.

If you own Ralliant, you need to know this is a spin-off story with messy numbers and a real margin debate.

ral

technology · industrial / test & measurement mid cap updated feb 6, 2026
$53.85
market cap ~$6B · 52-week range $41–$55
xvary composite: 55 / 100 · below average
our overall rating — combines growth, value, risk, and momentum
Start here if you're new
what it is
Ralliant sells the gear and software that help customers test equipment, monitor grids, and keep aircraft and defense systems safe.
how it gets paid
Last year Ralliant made $2.1B in revenue. Safety and sensing systems was the main engine at $0.82B, or 39% of sales.
why growth slowed
Revenue fell 4.0% last year. Gross margin at 50.2% matters most because it says the products still have pricing power even while reported operating results look chaotic.
what just happened
The latest quarter printed about $525M of revenue and $1.34 EPS (in line with ~$2.1B annual scale), but the earnings picture is messy enough that the market is still arguing with the math.
At a glance
B+ balance sheet — decent shape, but not bulletproof
20.3x trailing p/e — priced about right
0.5% dividend yield — cash in your pocket every quarter
9.0% return on capital — nothing to write home about
$3.35 fy2029 eps est
xvary composite: 55/100 — below average
What they do
Ralliant sells the gear and software that help customers test equipment, monitor grids, and keep aircraft and defense systems safe.
Ralliant sits inside jobs where failure is expensive. You do not casually swap out test gear or safety systems tied to power grids, aircraft, or defense programs. That helps explain why gross margin reached 50.2% in the latest quarter, even while reported operating margin was a surreal negative 57.2%.
software mid-cap industrial-tech spin-off test-and-measurement
How they make money
$2.1B annual revenue · their business grew -4.0% last year
Test instruments
$0.43B
Test systems, software, and services
$0.39B
Power grid monitoring solutions
$0.46B
Safety and sensing systems
$0.82B
The products that matter
precision instruments & software
Test & Measurement
$819M · 39% of disclosed mix
it generated 39% of 2025 year-to-date revenue in the segment mix shown here. this is the part of the business most tied to engineers' testing budgets.
39% mix
grid and aerospace safety
Sensors & Safety Systems
$337M · 25.1% margin
Q4 2025 sales reached $337M with a 25.1% operating profit margin. if there is an operating-leverage engine here, this is the closest thing to it.
25.1% margin
other operating businesses
Other Operations
$944M · 45% of disclosed mix
this line is $944M, or 45% of the segment rows on the page. it matters because it is too large to ignore and too vague to underwrite confidently.
largest bucket
Key numbers
$70
18-month target
The average target sits $16.15 above the $53.85 stock price, which is about 30% upside if execution stops wobbling.
-57.2%
operating margin
Jargon → operating margin → profit after day-to-day costs → so what: reported GAAP operating margin is deeply negative on spin-related and one-time items; use segment margins and adjusted views for operations.
$2.1B
annual revenue
That is the current size of the business, and it shrank 4.0% vs. prior year, so this is not a growth story yet.
9.0%
return on capital
Jargon → return on capital → profit on the money invested in the business → so what: 9.0% is decent, not elite.
Financial health
B+
strength
  • balance sheet grade B+ — solid but not elite
  • risk rank 3 — safer than 50% of stocks
  • long-term debt $1.1B (16% of capital)
  • net profit margin 14.3% — keeps 14 cents of every dollar in revenue
  • return on equity 13% — $0.13 profit for every $1 investors have put in
B+ — functional but not a standout on the balance sheet.
Total return vs. market

Return history isn't available for RAL right now.

same standard. no invented return math.

source: institutional data · return history unavailable
What just happened
missed estimates
The latest quarter showed ~$525M of revenue and $1.34 EPS, but the earnings picture is messy enough that the market is still arguing with the math.
vs. prior year comps are distorted by the spin-off and carve-out reporting, so headline growth rates are not a clean read. Consensus data can still flag misses on adjusted lines when one-time and separation costs move the goalposts.
~$525M
revenue (qtr)
$1.34
eps
50.2%
gross margin
the number that mattered
Gross margin at 50.2% matters most because it says the products still have pricing power even while reported operating results look chaotic.
source: company earnings report, 2026

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What could go wrong

the #1 risk is an earnings-guide reset that turns into a credibility problem.

∘
med
guidance cut and shareholder investigation
FY2026 EPS guidance is now $2.22–$2.42. That came in below prior expectations and triggered a shareholder investigation tied to earlier disclosures.
If management has to reset numbers again, the issue stops being one weak year and becomes trust.
∘
med
customer concentration inside test & measurement
The snapshot points to 39% concentration with a single customer in Test & Measurement. That is not concentration you ignore.
A pullback from one large account would hit a segment that already represents 39% of the disclosed mix.
∘
med
activist pressure can force short-term fixes
Irenic Capital Management is pushing for faster buybacks and efficiency moves. Activists can surface value. They can also turn a needed operating rebuild into a capital-allocation debate.
If the focus shifts from fixing growth to engineering EPS, you may get a nicer quarter and a weaker business.
This is a company with ~$2.1B in revenue, 14.3% net margin, 20.3x trailing earnings, and a fresh guide-down. The math can work. The credibility discount is the part you need to watch.
source: institutional data · regulatory filings · risk analysis
Pay attention to
the number that matters
whether FY2026 EPS stays inside $2.22–$2.42
After a reset this sharp, the next job is simple: stop missing your own numbers. Another guide-down would hit trust harder than earnings.
legal overhang
shareholder investigation updates
The existence of an investigation does not decide the outcome. It does keep management credibility in the spotlight every quarter.
next catalyst
Q1 2026 earnings around may 6, 2026
You want to see whether the lower earnings guide was conservative enough and whether the 3–5% top-line goal still looks realistic.
business quality
whether growth moves beyond the three-year stall
Revenue has been flat for three years. If that does not change, the long-term $70 midpoint and $85 high target start to look optimistic rather than analytical.
Analyst rankings
risk profile
average
risk rank 3 — typical risk profile — neither especially safe nor risky.
source: institutional data
Institutional activity

institutions have been net selling for 2 consecutive quarters — 261 buyers vs. 340 sellers in 3q2025. total institutional holdings: 0.1B shares. net selling for 2 quarters.

source: institutional data · 1q2025-3q2025
source: institutional data
Price targets
3-5 year target range
$55 $85
$54 current price
$70 target midpoint · +30% from current · 3-5yr high: $85 (+60% · 12% ann'l return)
source: institutional data · analyst targets

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