Since October 2025, Rockwell Automation has been in a holding pattern, posting a small return of 2.7% while floating around $358.85. However, the stock is beating the S&P 500’s 5.5% decline during that period.
Is there a buying opportunity in Rockwell Automation, or does it present a risk to your portfolio? Dive into our full research report to see our analyst team’s opinion, it’s free.
Why Is Rockwell Automation Not Exciting?
Despite the relative momentum, we're sitting this one out for now. Here are three reasons you should be careful with ROK and a stock we'd rather own.
1. Core Business Falling Behind as Demand Declines
We can better understand Internet of Things companies by analyzing their organic revenue. This metric gives visibility into Rockwell Automation’s core business because it excludes one-time events such as mergers, acquisitions, and divestitures along with foreign currency fluctuations - non-fundamental factors that can manipulate the income statement.
Over the last two years, Rockwell Automation’s organic revenue averaged 2.8% year-on-year declines. This performance was underwhelming and implies it may need to improve its products, pricing, or go-to-market strategy. It also suggests Rockwell Automation might have to lean into acquisitions to grow, which isn’t ideal because M&A can be expensive and risky (integrations often disrupt focus). 
2. EPS Barely Growing
We track the long-term change in earnings per share (EPS) because it highlights whether a company’s growth is profitable.
Rockwell Automation’s unimpressive 7.4% annual EPS growth over the last five years aligns with its revenue performance. This tells us it maintained its per-share profitability as it expanded.
3. New Investments Fail to Bear Fruit as ROIC Declines
ROIC, or return on invested capital, is a metric showing how much operating profit a company generates relative to the money it has raised (debt and equity).
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, Rockwell Automation’s ROIC has decreased over the last few years. We like what management has done in the past, but its declining returns are perhaps a symptom of fewer profitable growth opportunities.
Final Judgment
Rockwell Automation isn’t a terrible business, but it doesn’t pass our bar. Following its recent outperformance in a weaker market environment, the stock trades at 28.1× forward P/E (or $358.85 per share). At this valuation, there’s a lot of good news priced in - we think there are better stocks to buy right now. Let us point you toward an all-weather company that owns household favorite Taco Bell.
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