Atmus Filtration Technologies Inc. (ATMU): what the price requires
At today's price, Atmus Filtration Technologies Inc. (ATMU) is priced for +14.6% growth. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.
Generated: 2026-07-14 · Exported: 2026-07-16 · Source: https://boothcheck.com/report/ATMU
Headline
| Field | Value |
|---|---|
| Ticker | ATMU |
| Company | Atmus Filtration Technologies Inc. |
| Current price | $51.44/sh |
| Composition | Fuel 45% / Lube 20% / Air 17% / Other 18% |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin needed | 12.8% |
| Operating margin today | 17.0% |
| Margin compression implied | -4.2pp |
| Implied growth | 14.6% |
| Multiple paid | 17x operating income |
The operating-margin requirement is derived from the framework's value band at year 12, a separately labeled basis from the headline growth/duration solve.
Solve inputs: computed at a 9.9% cost of capital with 4% terminal growth over a 5-year stage; each 1pp of cost of capital moves the implied operating-profit growth ~6.4pp.
How unusual the bet is: within-range
| Reference | Value |
|---|---|
| vs own history | +0.71σ |
| cohort percentile (of 210 peers) | 43 |
| sustained it ~5 years at this level | 45% |
| implied end-window share | 0% |
Valuation X-Ray
Asset, earnings-power and peer-multiple models all land far below the price; ONLY the growth-DCF reaches it. The bet is durable compounding the static frames structurally cannot price (a moat/durability premium).
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 1.85x | 5 | expensive |
| Earnings | 1.87x | 5 | expensive |
| Relative | 1.26x | 5 | expensive |
| Growth | 0.91x | 3 | justifies |
Families that justify the price: Growth Families that call it expensive: Asset, Earnings
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 7.6%); the inversion above states its own rate.
Per-Model Detail (n=18)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $56.70 | 0.91x | yes | FCF base $0.2B, growth 10% (input: historical growth), terminal g 4.0%, WACC 7.6%, 6yr projection |
| DCF Exit Multiple | Growth | $59.91 | 0.86x | yes | Exit EV/EBITDA: 13.7x / 15.7x / 17.7x (bear / base = today's held flat / bull), 6yr |
| Relative Valuation | Relative | $48.66 | 1.06x | yes | P/E 20x (static sector reference · 2026-04), scenarios: 16.6x / 20.0x / 23.4x (bear / base = reference held flat / bull), EV/EBITDA 13x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $27.83 | 1.85x | yes | BV/sh $4.92, ROE (TTM) 52.3%, ke 9.3% |
| Two-Stage Excess Return | Asset | $82.59 | 0.62x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $45.28 | 1.14x | yes | Rev $1.8B, growth 10% (input: historical growth; tapered), Terminal P/S: 1.9x / 2.3x / 2.7x (bear / base = today's held flat / bull, cap 8x) |
| Peter Lynch Fair Value | Relative | $39.53 | 1.30x | yes | EPS $2.55, growth 16% (input: historical EPS growth), PEG=1.29 (Fair) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $32.84 | 1.57x | yes | Normalized EBIT (3y avg op income, one-time charges added back) $0.34B × (1−21%) / WACC 7.6% → EPV (no growth) |
| Residual Income | Asset | $45.22 | 1.14x | yes | BV $4.92 + 5yr PV of (ROE (TTM) 52.3% − Kₑ 9.3%) × BV; BV grows 8.8%/yr |
| Graham Number | Asset | $16.80 | 3.06x | yes | √(22.5 × EPS $2.55 × BVPS $4.92) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $40.71 | 1.26x | yes | EBITDA $0.32B × sector EV/EBITDA 13.0x |
| FCF Yield | Earnings | $10.46 | 4.92x | yes | FCF $158.0M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $8.68 | 5.93x | yes | SBC-adj FCF $0.14B (FCF $0.16B − SBC $0.01B) capitalized at Kₑ |
| Ben Graham Formula | Earnings | $82.28 | 0.63x | yes | EPS $2.55 × (8.5 + 2×15.0%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | $3.11 | 16.54x | yes | BV $4.92 × (ROIC 4.8% / WACC 7.6%) |
| P/Sales Sector | Relative | $33.39 | 1.54x | yes | Revenue $1.83B × sector P/S 1.5x |
| PEG Fair Value | Relative | $59.30 | 0.87x | yes | EPS $2.55 × (PEG 1.5 × growth 15.5% (input: historical EPS growth)) → PE 23.3x |
| Earnings Yield | Earnings | $27.57 | 1.87x | yes | EPS $2.55 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net debt | $792.7m |
| Net debt / NOPAT (after-tax) | 3.29x |
| Net debt / operating income (pre-tax) | 2.60x |
| Interest coverage | 7.7x |
| Share count CAGR (buyback) | -0.4% |
| Burning cash | no |
Bullet Takeaways
- The number that defines Atmus is its installed base: it sells filtration under the Fleetguard brand for trucks and equipment, and most of its revenue is replacement filters that wear out and get bought again, a recurring aftermarket stream that turns every engine running its first-fit filter into years of follow-on demand.
- The defining risk is customer concentration, which the 10-K names directly: heavy reliance on Cummins "increases the risk of fluctuations in our operating results and our sensitivity to any material adverse developments experienced by Cummins," even as Atmus works to separate its supply chain and diversify.
- Watch the M&A-led diversification against guidance: Atmus closed the Koch Filter acquisition to enter industrial filtration and guided full-year 2026 revenue to roughly $1.945 billion to $2.015 billion, so the next prints test whether the new markets offset slower core truck demand.
Bull Case
The single most decisive fact about Atmus is the shape of its revenue: it is mostly recurring. The company designs filtration "principally under the Fleetguard brand, that enable lower emissions and provide superior asset protection," per the 10-K, and the economics work like a razor-and-blade. A new truck or piece of equipment ships with Atmus filters installed, the first-fit sale, and then those filters are consumed and replaced on a schedule for the life of the asset, the aftermarket sale. The aftermarket is the larger and steadier of the two, and it grows with the installed base regardless of whether new-truck production is strong in any given year. That is why a company exposed to the cyclical commercial-vehicle market can still earn a remarkably high return on capital: a 52% return on equity reflects a brand and a replacement annuity, not a commodity manufacturer.
The growth strategy is to widen that annuity beyond on-highway trucks. Atmus completed the acquisition of Koch Filter, its entry into industrial filtration markets, and has added other targeted deals, using M&A to extend the Fleetguard franchise into adjacent filtration categories with their own aftermarket tails. The first quarter showed the strategy contributing: net sales grew 14.6% year over year to $477.5 million, with the Koch acquisition adding $38.4 million, favorable currency $16.3 million, and pricing $8.3 million. Pricing power and a growing installed base together are exactly the levers a durable industrial compounder pulls.
The valuation is the part that makes the bull case unusual for a quality name: it is not demanding. At $51.80, Atmus trades at roughly 17 times company-wide operating income, which embeds operating-profit growth around 15% a year for five years, a pace the company has recently delivered and that history says a meaningful share of fast-growers sustain. Crucially, several of the valuation methods land at or above the current price, so this is closer to a reasonably priced quality business than a stretched growth bet. The balance sheet, while carrying the debt that came with the Cummins spinoff, is serviceable, with interest coverage near 8 times. The bull case is a high-return, recurring-revenue franchise extending into new filtration markets at a multiple that does not require heroics, just continued execution.
Bear Case
The bear worry starts not with the multiple but with the umbilical cord to Cummins. Atmus was spun out of Cummins, and the relationship remains the defining feature of its risk profile. The 10-K is blunt that this "customer concentration increases the risk of fluctuations in our operating results and our sensitivity to any material adverse developments experienced by Cummins." A large share of Atmus's first-fit volume rides on Cummins engines, and Atmus depends on Cummins-related arrangements for parts of its supply chain. That is a concentrated dependency on a single partner whose own fortunes track the same cyclical truck market, and unwinding it, building independent supply and diversifying customers, is expensive and unfinished. Until the separation is complete, the company's results are partly hostage to decisions made at another company.
The demand underneath both first-fit and aftermarket is cyclical. New-truck production rises and falls with freight rates, interest rates, and emissions-regulation timing, and while the aftermarket is steadier, it is not immune: a deep enough freight recession reduces miles driven and stretches filter-replacement intervals. The first quarter already carried a caution flag. Revenue came in slightly below expectations, and management's full-year guidance, a revenue range with a midpoint near $1.98 billion and adjusted earnings of $2.75 to $3.00, landed below the consensus the market had been carrying, which is why the stock sold off on the print. Guidance below the street is the market's way of saying the easy growth may be behind and the core truck cycle is softening.
The valuation disconnect is real even if it is moderate. Lead with the qualitative point: this is a good business, but it is a cyclical one carrying spinoff debt, and the price already credits durable mid-teens growth. The arithmetic then follows. Against the families of valuation method, the asset-value, earnings-power, and peer-multiple lenses all land below today's $51.80 (June 27, 2026), and only the forward-growth methods reach it. The company carries roughly $1.0 billion of gross debt against about $210 million of liquid assets, net debt around two and a half times operating income, so the leverage is real and would bite in a downturn that compresses the cyclical first-fit volume. The bull's M&A-led diversification is also the bear's execution risk: acquisitions like Koch and Cook have to be integrated and have to earn their cost, and a string of deals can paper over slowing organic growth rather than create durable value. If the truck cycle softens while the diversification is still early, the price has the static methods well below it and little cushion.
Valuation
Atmus is the rare quality industrial whose price does not demand a miracle, which makes the valuation question one of degree rather than direction. At $51.80, the stock trades at roughly 17 times company-wide operating income, a level that embeds operating-profit growth around 15% a year for five years. That is within what the company has recently delivered, and history suggests a meaningful share of fast-growers, on the order of 44%, sustain that pace for five years, so the framework reads the priced-in assumption as broadly consistent with plausible growth rather than extreme. This is not a stock priced for perfection.
The families of method split in the now-familiar pattern, but less severely than for the more stretched names. The asset-value methods, anchored on a thin book value near $4.92 a share, land below the price, as they will for a high-return, asset-light filtration business whose value lives in its brand and installed base rather than its balance sheet. The earnings-power methods, capitalizing normalized profit, land in the $30s. The peer-multiple methods, applying a sector price-to-earnings near 20 times, land right around the price. Only the forward-growth methods clear it comfortably. That is a moderate durability premium: the static lenses say richly valued, but the growth methods and the peer multiple essentially reach the price, which is why this reads as a fair-to-slightly-rich quality compounder rather than a speculative bet. The high return on equity, above 50%, is the engine the growth methods are crediting; the question is how long that return persists as the company diversifies away from its highest-margin core.
Solvency is the one place the bear has a foothold. Atmus carries roughly $1.0 billion of gross debt against about $210 million of liquid assets, leaving net debt near two and a half times operating income, a legacy of the Cummins spinoff and the recent acquisitions. Interest coverage near 8 times means the debt is comfortably serviced at current earnings, and the share count is essentially flat, so dilution is not an issue. But the leverage removes some of the cushion a net-cash compounder would have, and it matters most in exactly the scenario the cyclical first-fit business is exposed to, a downturn in truck production. The buyer at today's price is paying a fair multiple for a recurring-revenue franchise with real growth optionality, underwriting continued execution on diversification against a manageable but real debt load. It is worth noting that published analyst targets sit above the current price, in the $60s to low $70s, crediting the aftermarket durability and the M&A pipeline more than the static methods do.
Catalysts
The first quarter of 2026 set up the debate. Net sales rose 14.6% year over year to $477.5 million, helped by the Koch Filter acquisition adding $38.4 million, favorable currency adding $16.3 million, and pricing adding $8.3 million, while adjusted earnings per share of $0.69 edged past consensus. The market focused less on the beat than on the outlook: management guided full-year 2026 revenue to roughly $1.945 billion to $2.015 billion and adjusted earnings of $2.75 to $3.00, a range whose midpoint sat below the consensus the street had been carrying, which sent the stock lower on the print. The coming quarters are a test of whether organic truck demand stabilizes and whether the acquisitions deliver the growth that offsets a softer core.
The strategic catalyst is the diversification away from Cummins dependence. Atmus completed the Koch Filter acquisition to enter industrial filtration, expects integration by early in its third quarter, and has paired it with supply-chain separation work and additional targeted deals, the clearest expression of the long-term narrative that Atmus becomes a broader filtration company rather than a captive truck-filter supplier. Analyst sentiment remains constructive, with a consensus that skews to the buy side and price targets above the current level, reflecting confidence in the aftermarket annuity and the M&A strategy even after the soft guidance. The next earnings report, and specifically organic revenue growth, the integration progress on Koch, and any change to the full-year range, are the events that will confirm or challenge the growth the price is paying for.
Peer Cohorts (Per Segment, With Filing Citations)
Filtration Products (reported)
- DCI (DONALDSON COMPANY, INC.)
- (no filing in the citation store)
- PHIN (PHINIA INC.)
- (no filing in the citation store)
- GTX (Garrett Motion Inc.)
- (no filing in the citation store)
- MOD (MODINE MANUFACTURING CO)
- (no filing in the citation store)
- ALV (AUTOLIV, INC.)
- (no filing in the citation store)
- VC (VISTEON CORPORATION)
- (no filing in the citation store)
- GNTX (GENTEX CORPORATION)
- (no filing in the citation store)
- DORM (Dorman Products, Inc.)
- (no filing in the citation store)
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.
Sources
Q1 FY2026 results, May 2026 · analyst consensus, MarketBeat / TipRanks, 2026 · Q1 FY2026 results and company disclosures, 2026 · analyst consensus, Benzinga / TipRanks, 2026