CRANE NXT, CO. (CXT): what the price requires

At today's price, CRANE NXT, CO. (CXT) is priced for +13.9% 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: 2026-07-19 · Source: https://boothcheck.com/report/CXT

Headline

FieldValue
TickerCXT
CompanyCRANE NXT, CO.
Current price$50.76/sh
CompositionCPI - Products 43% / CPI - Services 8% / SAT - Banknotes and Security Products 36% / SAT - Authentication Products and Solutions 13%

What The Price Requires (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

FieldValue
Inversion basiswhole-company
Operating margin needed6.8%
Operating margin today12.1%
Margin compression implied-5.3pp
Implied growth13.9%
Multiple paid23x 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 8.4% cost of capital with 4% terminal growth over a 5-year stage; each 1pp of cost of capital moves the implied operating-profit growth ~7.4pp.

How unusual the bet is: within-range

ReferenceValue
vs own history+0.28σ
cohort percentile (of 225 peers)53
sustained it ~5 years at this level46%
implied end-window share0%

Valuation X-Ray

The price is justified by relative-multiple and growth-DCF; asset-based/earnings-power land below the price.

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.

FamilyMedian price/FVModelsReads
Asset1.97x4expensive
Earnings2.13x4expensive
Relative1.03x3expensive
Growth0.80x2justifies

Families that justify the price: Relative, 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 6.4%); the inversion above states its own rate.

Per-Model Detail (n=13)

ModelFamilyFVPrice/FVApplicableMethodology
DCF Perpetual GrowthGrowth——no—
DCF Exit MultipleGrowth$90.990.56xyesExit EV/EBITDA: 10.2x / 12.2x / 14.2x (bear / base = today's held flat / bull), 6yr
Relative ValuationRelative$47.611.07xyesP/E 18x (static sector reference · 2026-04), scenarios: 14.9x / 18.0x / 21.1x (bear / base = reference held flat / bull), EV/EBITDA 12x
Simple DDMGrowth——no—
Two-Stage DDMGrowth——no—
Simple Excess ReturnAsset$24.192.10xyesBV/sh $21.39, ROE (TTM) 10.5%, ke 9.3%
Two-Stage Excess ReturnAsset$25.681.98xyes5yr excess ROE then converge to ke=9.3%
Discounted Future Market CapGrowth$49.051.03xyesRev $1.7B, growth 14% (input: historical growth; tapered), Terminal P/S: 1.4x / 1.7x / 2.0x (bear / base = today's held flat / bull, cap 8x)
Growth-Adjusted P/ERelative——no—
Margin TrajectoryGrowth——no—
Earnings Power ValueEarnings$41.221.23xyesNormalized EBIT (5y avg op income, one-time charges added back) $0.32B × (1−26%) / WACC 6.4% → EPV (no growth)
Residual IncomeAsset$25.951.96xyesBV $21.39 + 5yr PV of (ROE (TTM) 10.5% − Kₑ 9.3%) × BV; BV grows 6.8%/yr
Graham NumberAsset$32.761.55xyes√(22.5 × EPS $2.23 × BVPS $21.39) — Graham's conservative floor
EV/EBITDA RelativeRelative$49.331.03xyesEBITDA $0.35B × sector EV/EBITDA 12.0x
FCF YieldEarnings$23.652.15xyesFCF $246.6M / Kₑ 9.3% — zero-growth perpetuity
SBC-Adj FCF YieldEarnings$19.062.66xyesSBC-adj FCF $0.22B (FCF $0.25B − SBC $0.02B) capitalized at Kₑ
Ben Graham FormulaEarnings$1.8727.14xyesEPS $2.23 × (8.5 + 2×-5.0%) × (4.4 / 5.3%) (excluded from median)
ROIC-Justified P/BAsset$2.1723.39xyesBV $21.39 × (ROIC 0.6% / WACC 6.4%) (excluded from median)
P/Sales SectorRelative$73.880.69xyesRevenue $1.71B × sector P/S 2.5x
PEG Fair ValueRelative——no—
Earnings YieldEarnings$24.112.11xyesEPS $2.23 / required return 9.3% (Rf 4.3% + ERP 5.0%)
Funds From Operations MultipleRelative——no—
Clinical Phase NPVGrowth——no—
MertonAsset——no—
V5 Mechanical———no—

Solvency

FieldValue
Net debt$1.3b
Net debt / NOPAT (after-tax)9.15x
Net debt / operating income (pre-tax)6.76x
Interest coverage3.1x
Share count CAGR (buyback)-23.2%
Burning cashno

Bullet Takeaways

Bull Case

Crane NXT is past its formative stage and into a clear identity, and reading the stage correctly is the key to the bull case. Spun out of the old Crane conglomerate, it is now a focused technology company in two durable niches: the Crane Payment Innovations segment, which builds the machines that count, validate, and accept currency, and the Security and Authentication Technologies segment, which supplies the security features printed into banknotes and the systems that authenticate products against counterfeiting. The 10-K's segment disclosure shows the scale of the two engines, reporting net sales of $886.4 million for Crane Payment Innovations and $504.9 million for Security and Authentication Technologies in the base reporting year. These are businesses where the customer, often a central bank, a government mint, or a vending and retail operator, certifies a supplier over years and rarely switches, which gives the revenue unusual stickiness.

The growth strategy is disciplined acquisition into adjacent authentication markets, and it is moving fast. Crane NXT folded in De La Rue's authentication business and, on March 31, 2026, completed the acquisition of Antares Vision for about €362 million, expected to add roughly $200 million to $210 million of revenue in 2026. The logic is coherent: the company already prints the security features that make money and documents hard to fake, and authentication extends the same anti-counterfeiting capability to consumer and pharmaceutical products. That is why management raised full-year sales-growth guidance to 15% to 17% from an initial 4% to 6%. Buying capability adjacent to a defensible core is lower-risk M&A than diversifying away from it.

The economics are improving as the mix shifts. First-quarter 2026 sales rose about 17% to $388 million, with organic growth around 6%, and adjusted EBITDA margin expanded roughly 80 basis points to about 19%. A return on equity above 10% on a stable hardware-and-security base, margin expansion as authentication grows, and a flat share count rather than dilution describe a company compounding through bolt-on deals without giving away the upside to new shares. A focused operator in two high-trust niches, buying its way deeper into authentication while expanding margins, is the substance the price is leaning on.

Bear Case

The variable with the most leverage over Crane NXT is not on its income statement, it is in government policy, and the company is candid about it. A meaningful share of its profit depends on decisions made by states: how much currency to print, which security features to specify, and what trade rules apply to the equipment and materials it ships across borders. Its own filings warn that "the adoption and expansion of trade restrictions, the occurrence of a trade war, or other governmental action related to tariffs" could decrease demand and pressure profitability, and it specifically flags exposure in Mexico, where it manufactures. A company this dependent on cross-border flows and government procurement carries a policy risk that a standard industrial multiple does not fully capture, and the current price does not appear to discount it.

The structural backdrop adds a slower threat: cash usage. The Crane Payment Innovations segment, the larger of the two by revenue, makes its money from the handling and acceptance of physical currency, and the secular trend toward digital payments works against that line over time. Management itself guides the CPI segment to roughly flat sales for the year, with service growth offsetting flat-to-lower hardware and vending. Flat is not decline, but a flat core means the company's growth depends almost entirely on acquisitions in authentication, which raises the stakes on integrating each deal well and on continuing to find them at sensible prices.

The leverage is the amplifier on both. Net debt sits near $1.28 billion, about 5.5 times trailing operating profit, run up to fund the De La Rue and Antares deals, with interest covered about 4.6 times. That is manageable while the acquired businesses perform, but it leaves less room for error if a deal underdelivers or a policy shock dents demand. What the price requires is for the acquisition-led growth to keep compounding: at today's level the market is paying about 21 times company-wide operating profit, implying roughly 11.8% operating growth a year for five years, a pace within recent delivery but one only about half of comparable fast-growers sustained even five years. The asset-value and earnings-power methods sit below the price; only the peer-multiple and growth lenses reach it. A trade-policy shock, a faster shift away from cash, or an acquisition that disappoints would each pressure the very growth the price is extrapolating.

Valuation

This report assigns no fair value and no target. It works backward from the $46.99 price (June 27, 2026) to the assumption embedded in it, then measures the distance to each way of valuing the business, treating it as the two-segment company it is.

The price reads as a growth-and-quality bet rather than a value one. The asset-value methods, anchored on a $21.39 book value and a trailing return on equity around 10.5%, sit above the price in distance terms, meaning the price is rich on book value. The earnings-power methods, which capitalize current profit, also say expensive. The peer-multiple lens at a sector earnings multiple around eighteen times sits close to the price, and the growth-cash-flow methods reach it. For a multi-segment company that pattern says the market is paying for the acquisition-led growth and the stickiness of the two niches, not for what the assets or current earnings power are worth standing still. The right comparison is by segment, currency-handling and security-printing peers for each, rather than a single blended industrial multiple.

Inverting the price quantifies the bet. At today's level the market is paying about 21 times company-wide operating profit, implying roughly 11.8% operating growth a year for five years. The rate is within what Crane NXT has recently delivered, helped by acquisitions; the stretch is duration, and only about half of comparable fast-growers sustained that pace for five years. The concrete "what has to be true" is continued accretive M&A in authentication, plus a CPI segment that holds roughly flat rather than declining, together delivering the operating growth the price extrapolates.

Solvency frames the constraint. Net debt near $1.28 billion is about 5.5 times trailing operating profit, raised to fund the De La Rue and Antares acquisitions, with interest covered about 4.6 times and the company generating free cash. The balance sheet can carry the debt while the acquired businesses perform, but it is the amplifier on the downside: a deal that underdelivers or a policy shock that dents demand bites harder with this much leverage. The price is paying for the growth and the moat in two high-trust niches; the debt is the reason the integration and the policy backdrop have to cooperate for the bet to pay.

Catalysts

The clearest catalyst is the acquisition integration and the raised growth outlook behind it. Crane NXT completed the Antares Vision acquisition on March 31, 2026 for about €362 million in cash, expected to add roughly $200 million to $210 million of revenue in 2026, and now guides Crane Authentication to total growth in the low 20% range including a full-year contribution from De La Rue Authentication. On that strength the company raised full-year sales-growth guidance to 15% to 17% while holding adjusted EPS guidance at $4.10 to $4.40. The next quarterly print is the test of whether the acquired businesses are integrating on plan.

Segment trajectories are the forward signals to watch. Management guides the Security and Authentication side to high-single-digit growth on U.S. and international currency, and the CPI segment to roughly flat, with service growth offsetting softer hardware and vending. A new currency series or a large central-bank order can swing the banknote line, so government currency-printing decisions are discrete events for that segment.

The variable with the most leverage runs on policy timelines rather than the company's own. Trade restrictions, tariffs, and government procurement decisions move demand for both currency equipment and security printing, which makes the policy backdrop the catalyst hardest to forecast and most consequential for the multi-year case.

Peer Cohorts (Per Segment, With Filing Citations)

Crane Payment Innovations (reported)

Security and Authentication Technologies (reported)

Methodology Note

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

Crane NXT Q1 2026 earnings call · Crane NXT Q1 2026 results release

View the full interactive CXT report on boothcheck