Is The Timken Company (TKR) A Good Stock To Buy Now?
Is TKR a good stock to buy? We came across a bullish thesis on The Timken Company on r/ValueInvesting by Optimal_Image5192. In this article, we will summarize the bulls’ thesis on TKR. The Timken Company's share was trading at $142.36 as of June 18th. TKR’s trailing and forward P/E were 32.35 and 23.53 respectively according to Yahoo Finance.
The Timken Company designs, manufactures, and sells engineered bearings and industrial motion products, and related services in the United States and internationally. TKR is increasingly positioned as an underappreciated play on the emerging humanoid robotics and physical AI cycle, where precision motion components represent a critical bottleneck in scaling production.
The investment thesis centers on the rapid expansion of the total addressable market for actuators in humanoid robots, which account for 40–60% of total bill of materials, making them the largest cost component in the system.
Within this structure, harmonic and cycloidal gear systems are essential for enabling joint movement across shoulders, elbows, wrists, and hips, yet global supply remains highly constrained due to long lead times, specialized manufacturing requirements, and a concentrated supplier base dominated by Japanese and private players.
Timken differentiates itself as the only scaled U.S. public supplier of harmonic strain wave gearing through its Cone Drive acquisition, while SPINEA and CGI expand its presence across cycloidal reducers and precision miniaturized gear systems used in robotics and medical automation.
Together, these assets create a vertically integrated precision motion platform capable of serving nearly all robotic actuator axes. This robotics exposure is embedded within the Industrial Motion segment, which represents roughly 34% of sales and is growing at high single to double-digit rates, supported by automation demand and acquisitions.
Despite this embedded optionality, Timken trades at roughly 12x EV/EBITDA and about 2.1x EV/Sales, reflecting legacy cyclicality in bearings and industrial end markets rather than its robotics exposure. By comparison, robotics and automation peers trade significantly higher, with names like Regal Rexnord around 15.5x and Moog above 21x EV/EBITDA, implying a clear valuation gap.
Management has explicitly highlighted humanoids as a strategic priority, with double-digit CAGR already achieved in automation-related businesses since 2018 and further upside expected as humanoid adoption scales. As Industrial Motion expands within robotics end markets, Timken has the potential to re-rate toward 15–20x EV/EBITDA, implying substantial upside as the market begins to price in its position as a foundational supplier in humanoid robotics.
Previously, we covered a bullish thesis on Hubbell Incorporated (HUBB) by Stock Analysis Compilation in December 2024, which highlighted grid modernization and energy infrastructure demand as key growth drivers. HUBB's stock price has appreciated by approximately 12.11% since our coverage. Optimal_Image5192 shares a similar view but emphasizes humanoid robotics and precision motion exposure within The Timken Company (TKR), focusing on harmonic gear bottlenecks and valuation re-rating potential toward 15–20x EV/EBITDA as robotics adoption scales.
The Timken Company is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 44 hedge fund portfolios held TKR at the end of the first quarter which was 36 in the previous quarter. While we acknowledge the risk and potential of TKR as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than TKR and that has 10,000% upside potential, check out our report about this cheapest AI stock.