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High materiality7/10

Kerrisdale stakes Regal Rexnord as AI infrastructure with 100% upside

Jun 30, 2026, 11:12 AM EDT1 sourcesAI-analyzed

Why it may matterVerify against the original reporting

Activist-backed thesis highlighting a growth trough-to-inflection in AI-related end markets could prompt a revaluation, especially given the 11.5x 2027 EBITDA multiple vs peers, though execution risk and market skepticism remain.

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Activist Kerrisdale argues Regal Rexnord has transformed into an AI infrastructure play via the Rexnord P&M Control and Altra Industrial Motion acquisitions, expanding exposure to data centers, robotics, and automation. The note highlights a 30% CAGR in Regal's data-center switchgear and a potential doubling in two years, alongside an ~11.5x 2027 EBITDA multiple, suggesting significant upside if the thesis proves true.

Kerrisdale argues Regal Rexnord is AI infrastructure; discount to peers could yield 100% upside.
Data center growth and ePODs drive Regal's upside; acceleration expected.
Regal trades about 11.5x 2027 EBITDA, signaling valuation disconnect.
Catalysts include margin expansion, debt reduction, and stronger end-market demand.

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