IDEX CORP (IEX): what the price requires

At today's price, IDEX CORP (IEX) is priced for +19.2% 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/IEX

Headline

FieldValue
TickerIEX
CompanyIDEX CORP
Current price$221.23/sh
CompositionScientific Fluidics & Optics 25% / Performance Pneumatic Technologies 8% / Sealing Solutions 7% / Material Processing Technologies 4% / Micropump 0% / Intersegment elimination (HST) 0% / Pumps 12% / Water 10% / Energy 6% / Agriculture 4% / Valves 3% / Intersegment elimination (FMT) 0% / Fire & Safety 14% / Dispensing 4% / BAND-IT 3% / Intersegment elimination (FSDP) 0%

What The Price Requires (Inversion)

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

FieldValue
Inversion basiswhole-company
Operating margin needed18.5%
Operating margin today20.0%
Margin compression implied-1.5pp
Implied growth19.2%
Multiple paid25x 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 8.7% cost of capital with 4% terminal growth over a 5-year stage; each 1pp of cost of capital moves the implied operating-profit growth ~7.7pp.

How unusual the bet is: within-range

ReferenceValue
vs own history+0.89σ
cohort percentile (of 225 peers)59
sustained it ~5 years at this level38%
implied end-window share0%

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.

FamilyMedian price/FVModelsReads
Asset2.60x5expensive
Earnings3.11x5expensive
Relative1.97x5expensive
Growth1.20x3expensive

Families that justify the price: Growth Families that call it expensive: Asset, Earnings, Relative

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 8.7%); the inversion above states its own rate.

Per-Model Detail (n=18)

ModelFamilyFVPrice/FVApplicableMethodology
DCF Perpetual GrowthGrowth$184.151.20xyesFCF base $0.6B, growth 8% (input: historical growth), terminal g 4.0%, WACC 8.7%, 6yr projection
DCF Exit MultipleGrowth$224.820.98xyesExit EV/EBITDA: 20.0x / 22.0x / 24.0x (bear / base = today's held flat / bull), 6yr
Relative ValuationRelative$154.471.43xyesP/E 22.33x (blended: static sector reference 18x + trailing (TTM) 32x), scenarios: 18.6x / 22.3x / 26.1x (bear / base = reference held flat / bull), EV/EBITDA 15.01x
Simple DDMGrowth——no—
Two-Stage DDMGrowth——no—
Simple Excess ReturnAsset$73.773.00xyesBV/sh $54.45, ROE (TTM) 12.5%, ke 9.3%
Two-Stage Excess ReturnAsset$85.252.60xyes5yr excess ROE then converge to ke=9.3%
Discounted Future Market CapGrowth$182.491.21xyesRev $3.5B, growth 8% (input: historical growth; tapered), Terminal P/S: 3.9x / 4.7x / 5.4x (bear / base = today's held flat / bull, cap 8x)
Peter Lynch Fair ValueRelative$81.122.73xyesEPS $6.76, growth 9% (input: historical EPS growth), PEG=3.62 (Overvalued)
Margin TrajectoryGrowth——no—
Earnings Power ValueEarnings$67.043.30xyesNormalized EBIT (5y avg op income, one-time charges added back) $0.72B × (1−24%) / WACC 8.7% → EPV (no growth)
Residual IncomeAsset$87.632.52xyesBV $54.45 + 5yr PV of (ROE (TTM) 12.5% − Kₑ 9.3%) × BV; BV grows 8.1%/yr
Graham NumberAsset$91.012.43xyes√(22.5 × EPS $6.76 × BVPS $54.45) — Graham's conservative floor
EV/EBITDA RelativeRelative$112.391.97xyesEBITDA $0.81B × sector EV/EBITDA 12.0x
FCF YieldEarnings$71.073.11xyesFCF $611.4M / Kₑ 9.3% — zero-growth perpetuity
SBC-Adj FCF YieldEarnings$66.093.35xyesSBC-adj FCF $0.58B (FCF $0.61B − SBC $0.03B) capitalized at Kₑ
Ben Graham FormulaEarnings$149.621.48xyesEPS $6.76 × (8.5 + 2×9.0%) × (4.4 / 5.3%)
ROIC-Justified P/BAsset$15.3614.40xyesBV $54.45 × (ROIC 2.5% / WACC 8.7%)
P/Sales SectorRelative$118.621.87xyesRevenue $3.53B × sector P/S 2.5x
PEG Fair ValueRelative$90.802.44xyesEPS $6.76 × (PEG 1.5 × growth 9.0% (input: historical EPS growth)) → PE 13.4x
Earnings YieldEarnings$73.083.03xyesEPS $6.76 / 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)2.46x
Net debt / operating income (pre-tax)1.88x
Share count CAGR (buyback)-0.7%
Burning cashno

Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.

Bullet Takeaways

Bull Case

Valuing a company like IDEX is harder than valuing a single-product manufacturer, and that difficulty is itself the bull case. IDEX is not one business; it is dozens of small ones, each holding a defensible position in a narrow application. Its own 10-K describes markets where "Most of the Company's products" compete in highly competitive niches, and the trick is that IDEX wins those niches by engineering products that are hard to copy and expensive to switch away from, not by being the cheapest. A pump that meters a precise volume of fluid into a medical diagnostic, an optic that filters a specific wavelength, a sealing solution rated for a particular pressure: these are small markets where the customer cares far more about reliability and fit than about price. That mix is why the company runs an operating margin above 20%, far higher than a commodity industrial would manage.

The model compounds through acquisition. IDEX buys small, proprietary businesses and folds them into segments that already have the engineering and distribution to scale them. The 10-K notes that the company's total assets include "substantial intangible assets, primarily goodwill and identifiable intangible assets, which primarily result from acquisitions." In 2025 that meant Microlam, described by management as a bolt-on bringing proprietary difficult-to-machine forming into the optics toolbox, and Mott, a larger filtration deal. The capital-allocation discipline is real: management has targeted returning at least 70% of free cash flow to shareholders through dividends and buybacks while still funding bolt-ons. The share count has edged down, so buybacks are happening on top of the deal pipeline.

The near-term print is improving. IDEX reported Q1 2026 growth with record orders and lifted full-year adjusted EPS guidance to $8.35 to $8.55 from $8.15 to $8.35. Record orders matter more than the revenue line for a short-cycle industrial, because they are the leading indicator of the next several quarters. The bull case is that the semiconductor softness that dragged on 2025 was a cyclical air pocket in one end market, the rest of the portfolio is steady, and IDEX's acquisition machine keeps adding high-margin niches that the market underappreciates because no single one is large enough to notice.

Bear Case

The advantage IDEX leans on is pricing power in defensible niches, and the recent results show where that edge gets chipped. The company's own filing warns that its markets "Could Reduce Sales and Profit Margins" through competition, and 2025 made the warning concrete: management lowered full-year organic growth and adjusted EPS guidance, blaming slower customer decision-making on larger orders and a key semiconductor customer that cut its own growth expectations. A niche leader that can be set back by one customer in one end market is not as insulated as the steady margin suggests. Worse, the levers that are supposed to protect margins worked against the company: adjusted gross margin fell on near-term dilution from the Mott acquisition, unfavorable mix, and volume deleverage. When the acquisition engine dilutes margins on the way in and the end markets soften at the same time, the durability premium the stock carries starts to look fragile.

That fragility runs into a demanding price. At about $225 (June 27, 2026) the market pays roughly 26 times operating income, which embeds company-wide operating-profit growth near 20% a year for five years. Set that against management's own full-year 2026 organic-growth guide of 1% to 2%. The gap between what the price requires and what the company is guiding to is the entire bear case. The valuation methods agree the price is stretched: earnings-power approaches, peer multiples, and asset-based methods all land well below the current quote, and only the growth-driven cash-flow method reaches it, and only by carrying an aggressive forward growth rate. If organic growth stays in the low single digits, the multiple compresses toward where the cycle-independent methods sit, and the de-rating is the loss.

The returns on capital expose the cost of the acquisition strategy. IDEX earns a return on invested capital of only about 2.5%, well below its roughly 8.7% cost of capital, because the balance sheet is loaded with goodwill and intangibles from years of dealmaking. The filing flags that an impairment of those intangibles could "Significantly Reduce the Company's Net Worth." The company carries about $1.3 billion of net debt against operating profit, roughly 1.8 times a year's operating income, so a downturn would meet a balance sheet that is leveraged rather than cash-rich. None of this is distress, but it is the opposite of the cash fortress some niche compounders run. The bear case is that IDEX is paying a premium multiple for a model whose moat is real but eroding at the edges, whose growth has slowed to a crawl, and whose capital base earns less than it costs.

Valuation

Begin with the assumption baked into the quote. At about $225 IDEX trades near 26 times operating income, and inverting that price says the company needs to grow operating profit roughly 20% a year for five years to support it. The rate is within what IDEX has delivered in good years, so the question is duration rather than peak pace; about 37% of comparable fast-growers have held a rate like this for five years. But the live number that matters most is management's own: full-year 2026 organic growth is guided at 1% to 2%. The price assumes a reacceleration the company is not currently forecasting, which is the central tension in owning it here.

The methods we use to triangulate cluster well below the price. Earnings-power approaches such as capitalized free cash flow and the zero-growth earnings anchor land at a fraction of today's level. Asset and book-value methods sit low because return on equity, around 12.5%, only modestly exceeds the cost of equity, and return on invested capital near 2.5% sits below the cost of capital once the goodwill from years of acquisitions is counted in the denominator. Peer multiples put it below the price as well. Only the growth-driven discounted cash-flow method reaches the current quote, and it gets there by carrying a forward growth rate the static methods will not credit. When one cycle-dependent family is the only one that reaches the price, the premium is a bet on durable compounding that the static frames cannot price. The peer cohort, diversified industrials such as Nordson and Parker-Hannifin, trades on similar logic, but IDEX's premium sits in the upper half of that peer multiple range, so the bet here is not a cohort-wide one but a stretched version of it.

Solvency sets the boundary on the downside. IDEX carries about $1.3 billion of net debt, roughly 1.8 times a year's operating income, with interest expense not separately broken out in the latest filings. That is manageable but not a cushion, and it means a prolonged demand slowdown would compress earnings against a leveraged balance sheet rather than a net-cash one. The share count has drifted lower on buybacks, which adds to per-share value at the margin. What the buyer underwrites at this price is a high-quality collection of niche businesses bought at a multiple that requires growth to return to its better years, while the balance sheet offers support but not insulation.

Catalysts

The most recent quarter reset the trajectory upward. IDEX reported Q1 2026 results with growth and record orders, and raised full-year adjusted EPS guidance to $8.35 to $8.55 from a prior $8.15 to $8.35. Record orders are the leading signal for a short-cycle industrial, so the order line is the catalyst to track from here; it tells you whether the recovery the guidance raise implies is actually converting. Management still guides only 1% to 2% organic growth for the full year, so the EPS raise is leaning on margin and acquisition contribution more than on volume.

The overhang from 2025 frames what could go right or wrong next. Guidance came down that year on slower decision-making on larger orders and a key semiconductor customer lowering its growth expectations, while adjusted gross margin was pressured by near-term dilution from the Mott acquisition and unfavorable mix. The bolt-on cadence continued with deals such as Microlam in optics. The next earnings release matters on two fronts: whether the semiconductor end market has stabilized, and whether the recent acquisitions have moved past their dilution and started contributing to margin rather than subtracting from it.

Peer Cohorts (Per Segment, With Filing Citations)

Health & Science Technologies (HST) (reported)

Fluid & Metering Technologies (FMT) (reported)

Fire & Safety/Diversified Products (FSDP) (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

IDEX Q1 2026 results, 8-K · IDEX 2025 earnings commentary · IDEX 2025 capital-deployment guidance

View the full interactive IEX report on boothcheck