RPM

Based on a comprehensive analysis of RPM International Inc. (RPM), here is an assessment of whether the stock is worth buying.

Technical Analysis The stock shows recent positive momentum with a 4.23% one-month gain, but its three-month performance is flat and it has underperformed the market. Trading near the middle of its 52-week range suggests it is fairly valued from a technical perspective, not indicating overbought or oversold conditions. Its beta above 1.0 confirms above-average volatility, which is an important consideration for risk-tolerant investors.

Fundamental Analysis Fundamentally, RPM faces near-term challenges with declining quarterly revenue and compressed profit margins, indicating pressure on growth and earnings. However, the company maintains a solid financial foundation with strong liquidity and manageable debt levels, as shown by a healthy interest coverage ratio. Operational efficiency is an area for improvement, with modest returns on equity and a lengthy cash conversion cycle tying up working capital.

Valuation & Risk Valuation presents a mixed picture; the P/E ratio is reasonable, but a very high EV/EBITDA and negative PEG ratio suggest elevated expectations or earnings concerns. The primary risk is the stock's inherent volatility, evidenced by its beta and significant past drawdowns, though the low short interest indicates a lack of strong negative sentiment. The inability to compare directly with peers limits a full relative value assessment.

Investment Recommendation RPM is a HOLD at the current level. The company's strong balance sheet provides stability, but near-term fundamental headwinds from declining revenue and profitability, coupled with a mixed valuation, limit immediate upside potential. Investors may want to wait for clearer signs of operational improvement or a more attractive entry point before establishing a new position. This view is for reference only and not investment advice.

RockFlow Model Forecast: Three Scenarios for 2026

Based on RPM's current trading pattern and mixed fundamentals, my 12-month outlook is for moderate upside with several factors to monitor closely.

Key catalysts would include a potential turnaround in its quarterly revenue declines and improved operational efficiency, which could boost investor confidence if the company demonstrates better cost control amid current market pressures.

Potential risks primarily involve the continuation of underwhelming top-line growth and compressed margins, which could keep the stock range-bound. Its above-average volatility also suggests sensitivity to broader market swings.

Given the flat three-month performance and lack of a clear analyst target, a conservative target range of $115–$125 seems reasonable, assuming modest operational improvements and stable market conditions. This translates to roughly 3–12% upside from the current price.

Wall Street Consensus

Most Wall Street analysts are optimistic about RPM's 12-month outlook, with consensus target around $111.17, indicating expected upside potential.

Overall, RPM has investment potential but also faces challenges. Here are key factors to weigh before investing.

RPM demonstrates moderately positive recent performance with continued volatility, though it has lagged the broader market over the past quarter. The stock trades near the middle of its annual range, suggesting a balanced technical stance.

The stock has posted a solid 4.23% gain over the past month, yet its three-month performance is relatively flat at 0.74%. This indicates recent momentum but underscores a period of underperformance, as confirmed by its -2.63% relative strength compared to the market over the same period.

Currently priced at $111.68, RPM resides approximately at the midpoint of its 52-week range ($95.28 to $129.12), indicating it is neither overbought nor oversold based on this metric. The stock's beta above 1.0 and significant annual drawdown highlight its above-average volatility, which investors should factor into their risk assessment.

Of course. Here is a fundamental analysis of RPM based on the provided data.

1. Revenue & Profitability

RPM's most recent quarter shows a decline in revenue to $1.91 billion from $2.11 billion in the prior quarter. Profitability margins have also compressed, with the gross profit ratio declining from 42.3% to 40.8% and the net profit margin falling from 10.8% to 8.4%. This indicates pressure on both top-line growth and the company's ability to convert sales into bottom-line earnings, potentially due to rising costs or softer demand.

2. Financial Health

The company maintains a solid financial position, evidenced by a strong current ratio of 2.22 and a quick ratio of 1.45, indicating good short-term liquidity. The debt-to-equity ratio of 0.92 suggests a moderate level of leverage that is managed effectively, supported by a healthy interest coverage ratio of 8.24, meaning operating earnings are more than eight times its interest expenses.

3. Operational Efficiency

Operational efficiency shows room for improvement. The return on equity (ROE) is a modest 5.15%, while the asset turnover ratio is low at 0.24, indicating the company generates less than a quarter of a dollar in revenue for every dollar of assets. The cash conversion cycle of 91.8 days, driven by high days sales outstanding (64.6 days) and days inventory outstanding (86.3 days), suggests capital is tied up in working capital for an extended period, impacting cash flow generation.

Valuation Level: RPM's valuation appears moderately elevated based on traditional metrics. The P/E ratio of 21.4 is reasonable for a stable company, but the price-to-book ratio of 4.6 suggests significant premium to book value, while the exceptionally high EV/EBITDA of 57.1 indicates substantial debt or low current EBITDA relative to enterprise value. The negative PEG ratio suggests declining earnings growth expectations, presenting a mixed valuation picture overall.

Peer Comparison: Without specific industry average data available, a definitive peer comparison cannot be provided. RPM's valuation assessment must therefore rely solely on absolute metrics rather than relative industry positioning. Investors would need comparable industry data to determine whether RPM's multiples represent a premium or discount to sector peers.

Volatility Risk: RPM's beta of 1.109 indicates the stock is moderately more volatile than the broader market, suggesting it will likely experience amplified swings. This is supported by its significant one-year maximum drawdown of -24.43%, demonstrating considerable downside exposure during recent market declines.

Other Risks: The absence of any reported short interest suggests a currently low level of speculative bearish bets against the company, which can be viewed positively. However, investors should still consider other fundamental risks not captured here, such as industry-specific headwinds or broader economic conditions.