RBC Bearings came into this earnings print priced for perfection, with the stock already under pressure over the past month and slipping another 1.9% today to about $551. The market reaction looks cautious; yet the headline numbers tell a different story. Revenue for the quarter reached $519.5m and adjusted earnings per share hit $3.88. Adjusted gross margin landed at 47.7%. For a precision industrial and aerospace supplier that investors already view as premium on P/E, this kind of profitability is the real tension point between today’s share price move and the long term thesis.

Is RBC Bearings priced as a quality compounder, or has the premium gone too far given a P/E of 60.5x and a share price above the modelled cash flow value?…