Ingersoll Rand Inc. (IR): what the price assumes
In the published model solve dated 2026-Q2, anchored at $78.58, Ingersoll Rand Inc. (IR) is priced for today's economics sustained for ~5.7 years. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-06-27.
Generated: 2026-08-30 · Exported: 2026-08-31 · Source: https://boothcheck.com/report/IR
Headline
| Field | Value |
|---|---|
| Ticker | IR |
| Company | Ingersoll Rand Inc. |
| Current price | $78.58/sh |
| Composition | Original equipment 64% / Aftermarket 36% |
What The Price Assumes (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin (value-band context) | 7.1% |
| Operating margin today | 18.1% |
| Margin compression (value-band) | -11.0pp |
| Must persist for | 5.7y |
| Multiple paid | 24x operating income |
The operating-margin figure is value-band context at year 10: derived from the framework's value band, a separate calculation — not part of the priced-in solve.
Solve inputs: computed at a 10% cost of capital; growth searched up to the 25% self-funding ceiling.
How unusual the bet is: within-range (limited comparison data)
| Reference | Value |
|---|---|
| vs own history | -0.33σ |
| cohort percentile (of 225 peers) | 64 |
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.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 2.91x | 5 | expensive |
| Earnings | 2.35x | 5 | expensive |
| Relative | 0.89x | 2 | justifies |
| Growth | 1.10x | 3 | expensive |
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 9.2%); the inversion above states its own rate.
Per-Model Detail (n=15)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $71.38 | 1.10x | yes | FCF base $1.3B, growth 8% (input: historical growth), terminal g 4.0%, WACC 9.2%, 6yr projection |
| DCF Exit Multiple | Growth | $81.01 | 0.97x | yes | Exit EV/EBITDA: 13.3x / 15.3x / 17.3x (bear / base = today's held flat / bull), 6yr |
| Relative Valuation | Relative | — | — | no | P/E 22.14x (blended: static sector reference 18x + trailing (TTM) 32x), scenarios: 18.4x / 22.1x / 25.9x (bear / base = reference held flat / bull), EV/EBITDA 12x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $26.72 | 2.94x | yes | BV/sh $26.23, ROE (TTM) 9.4%, ke 9.3% |
| Two-Stage Excess Return | Asset | $26.97 | 2.91x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $65.19 | 1.21x | yes | Rev $7.9B, growth 8% (input: historical growth; tapered), Terminal P/S: 3.2x / 3.8x / 4.5x (bear / base = today's held flat / bull, cap 8x) |
| Peter Lynch Fair Value | Relative | $85.05 | 0.92x | yes | EPS $2.43, growth 35% (input: historical EPS growth), PEG=0.91 (Undervalued) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $26.64 | 2.95x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $1.16B × (1−21%) / WACC 9.2% → EPV (no growth) |
| Residual Income | Asset | $27.01 | 2.91x | yes | BV $26.23 + 5yr PV of (ROE (TTM) 9.4% − Kₑ 9.3%) × BV; BV grows 6.1%/yr |
| Graham Number | Asset | $37.87 | 2.07x | yes | √(22.5 × EPS $2.43 × BVPS $26.23) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | — | — | no | EBITDA $1.97B × sector EV/EBITDA 12.0x |
| FCF Yield | Earnings | $35.03 | 2.24x | yes | FCF $1219.3M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $33.47 | 2.35x | yes | SBC-adj FCF $1.16B (FCF $1.22B − SBC $0.06B) capitalized at Kₑ |
| Ben Graham Formula | Earnings | $78.41 | 1.00x | yes | EPS $2.43 × (8.5 + 2×15.0%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | $8.77 | 8.96x | yes | BV $26.23 × (ROIC 3.1% / WACC 9.2%) |
| P/Sales Sector | Relative | — | — | no | Revenue $7.94B × sector P/S 2.5x |
| PEG Fair Value | Relative | $91.12 | 0.86x | yes | EPS $2.43 × (PEG 1.5 × growth 25.0% (input: historical EPS growth)) → PE 37.5x |
| Earnings Yield | Earnings | $26.27 | 2.99x | yes | EPS $2.43 / 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 | — |
Economic-Unit Decomposition (Sum Of The Parts)
One or more material disclosed units has unresolved economics. Unknown/general is not evidence of homogeneity: segment SOTP is primary but incomplete, consolidated cash flow may remain only a secondary cross-check when every unit shares an enterprise basis, and one sector multiple or target margin is withheld.
| Unit | Role | Valuation basis | Revenue | Reported profit | Value evidence | Status |
|---|---|---|---|---|---|---|
| Industrial Technologies and Services | operating | enterprise | $6.1b | — | withheld | unresolved no unit value |
| Precision and Science Technologies | operating | enterprise | $1.6b | — | withheld | unresolved no unit value |
No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.
Solvency
| Field | Value |
|---|---|
| Net debt | $3.6b |
| Net debt / NOPAT (after-tax) | 3.17x |
| Net debt / operating income (pre-tax) | 2.50x |
| Interest coverage | 5.6x |
| Share count CAGR (buyback) | -1.1% |
| Burning cash | no |
Bullet Takeaways
- Ingersoll Rand makes air compressors, pumps, and gas-handling equipment, but the more important fact is that aftermarket parts and service make up 36.5% of revenue, recurring income that follows the installed base.
- The company grows mostly by acquisition: in the most recent quarter M&A added 3.7% to revenue while organic revenue dipped slightly, and management cited 10 deals at letter-of-intent stage and over 200 in the funnel.
- The price is reached only by the forward-growth method, so a buyer is paying a durability premium that rests on the acquisition machine and the recurring aftermarket continuing to compound.
Bull Case
The counterintuitive thing about Ingersoll Rand is that an industrial company selling compressors and pumps earns more than a third of its revenue from a quietly recurring stream, not from selling new machines. Aftermarket parts, consumables, and service represented 36.5% of total revenue in 2025. That changes what kind of business this is. A compressor runs continuously in a factory and needs parts, filters, and servicing for its whole life, so every machine sold plants an annuity. The installed base is the asset, and the recurring revenue it generates is stickier and higher-margin than the equipment sale that started it. That is why the company sustains an adjusted EBITDA margin above 25%, unusual for industrial machinery.
The growth model is a disciplined acquisition machine layered on top. Ingersoll Rand runs a deliberate strategy of buying small, niche flow-and-compression businesses and folding them into its operating system, and the pipeline is deep: management cited 10 transactions at letter-of-intent stage and more than 200 companies in its funnel. In the most recent quarter, acquisitions contributed 3.7% to revenue, and the company's diversified end markets span "life sciences, food and beverage production, clean energy, industrial manufacturing, infrastructure, water and wastewater treatment", so no single industry dictates results. Bolt-on M&A funded by strong cash flow, integrated into a high-margin recurring-revenue platform, is a compounding flywheel when executed well.
The execution is steady and the balance sheet supports more of the same. First-quarter revenue rose 8% to $1.85 billion with adjusted EPS up 7%, beating estimates, and the company reaffirmed full-year guidance. Net debt sits at a manageable roughly 3 times operating income with interest coverage above 4 times, and the share count has been edging down. That gives the company room to keep acquiring without straining its credit. The bull case is the flywheel: recurring aftermarket cash funding a relentless bolt-on program that adds more installed base and more recurring revenue.
Bear Case
The sector-cycle observation is the bear's starting point: industrial equipment demand follows the manufacturing and capital-spending cycle, and right now Ingersoll Rand's organic engine is barely moving. Organic revenue actually slipped 0.3% in the most recent quarter, with essentially all the growth coming from acquisitions and favorable currency. Full-year guidance calls for roughly 1% organic growth at the midpoint. Strip out M&A and currency, and the underlying business is treading water, which is what a soft point in the industrial cycle looks like. New-equipment orders are sensitive to customers' willingness to invest in capacity, and that willingness contracts when the economy slows.
That puts heavy weight on the acquisition machine, which carries its own risks. A company that grows mainly by buying others is only as good as the prices it pays and the integrations it executes. As the pipeline gets picked over and competition for quality assets rises, the returns on incremental deals can fade, and a single overpriced or poorly integrated acquisition can dent the flywheel's reputation for discipline. The strategy also requires continuous deployment of capital and, over time, can build up goodwill that becomes vulnerable in a downturn. The bull's flywheel is the bear's dependency: take away the M&A and the organic business is flat.
The valuation makes the cycle risk acute. The price is reached only by the forward-growth method; the asset-based, earnings-power, and peer-multiple lenses all say the stock is richly valued. That is a durability premium, and it rests on the assumption that the recurring aftermarket plus the acquisition cadence compound through the cycle. If the industrial cycle weakens further and organic growth stays negative while M&A returns compress, the static methods offer no floor, and a stock priced for durable compounding has to defend a multiple the current organic numbers do not support. Leverage at roughly 3 times operating income is moderate, not alarming, so this is not a solvency bear. It is a cycle-and-multiple bear: a high-quality compounder priced as if the compounding is guaranteed, into an organic backdrop that is currently flat.
Valuation
Ingersoll Rand is valued as a durable industrial compounder, and the price reflects what the static methods cannot fully capture. The forward-growth method reaches the price; the asset-based, earnings-power, and peer-multiple lenses all say it is richly valued. Inverting the price gives a modest required forward growth, but the embedded assumption is really about durability: that the recurring aftermarket plus the bolt-on acquisition cadence compound steadily over a long horizon.
That split among the methods is the durability premium. The high-margin recurring revenue and the proven M&A flywheel are exactly the kind of moat the trailing-multiple and book-value methods structurally understate, which is why three of four families read the stock as expensive while the growth method alone reaches it. The premium holds if the flywheel keeps turning, the aftermarket compounds and the acquisition pipeline keeps adding installed base, and it is at risk if organic growth, currently flat, stays soft and M&A returns compress. Among industrial-machinery peers, Ingersoll Rand commands a premium on the quality of its recurring mix rather than on its current organic growth rate.
Solvency is moderate and supportive rather than constraining. Net debt sits around 3 times operating income with interest coverage above 4 times, and the share count has edged down, so the company has room to keep acquiring without straining its credit. The leverage is the normal cost of an M&A-driven model, not a fragility. The decisive variable is the durability the price is paying for: whether the recurring aftermarket and the acquisition machine keep compounding through an industrial cycle whose organic engine is, for now, running flat.
Catalysts
The most recent quarter, the first of 2026, beat estimates while the organic engine stalled. Revenue rose 8% year over year to $1.85 billion and adjusted EPS rose 7% to $0.77, both ahead of consensus, with adjusted EBITDA of $469 million at a 25.4% margin. The composition mattered: acquisitions added 3.7% to revenue and currency 4.2%, while organic revenue slipped 0.3%.
The acquisition pipeline is the live catalyst. Management cited 10 transactions at letter-of-intent stage and more than 200 companies in its funnel, with the Fox S.r.l. acquisition expected to close soon. The company reaffirmed full-year 2026 guidance of 2.5% to 4.5% revenue growth, with roughly 1% organic at the midpoint and 2% from M&A, and adjusted EPS of $3.45 to $3.57.
The forward watch items are organic order trends and deal flow. Because the guidance leans on acquisitions and currency rather than organic growth, the key signals are whether organic demand reaccelerates as the industrial cycle firms and whether the company keeps converting its pipeline into accretive deals at disciplined prices. Each quarter's organic number is the clearest test of whether the underlying business is recovering or still treading water.
Peer Cohorts (Per Segment, With Filing Citations)
Industrial Technologies and Services (reported)
- DOV (DOVER Corp)
- FY2025 10-K: Climate & Sustainability Technologies. For financial information about our segments and geographic areas, see Note 19 - Segment Information in the consolidated financial statements in Item 8 of this Form 10-K. Engineered Products Our Engineered Products segment provides a wide range of equipment, components, software,…
- FY2025 10-K: , retail fueling and vehicle wash establishments. • Our Imaging & Identification segment supplies precision marking and coding, product traceability, brand protection and digital textile printing equipment, as well as related consumables, software and services to the global packaged and consumer goods, pharmaceutical,…
- GGG (GRACO INC.)
- FY2025 10-K: …then supply to their customers. Industrial The Industrial division designs and manufactures liquid finishing and advanced fluid dispensing equipment; pumps to move chemicals, petroleum, food, and other fluids; and systems, components, and accessories for the automatic lubrication of bearings, gears, and generators.…
- FY2025 10-K: Industrial Segment The Industrial segment represented approximately 45 percent of our total sales in 2025. It includes the Industrial and Powder divisions. The Industrial segment markets equipment and solutions for moving and applying paints, powder coatings, sealants, adhesives and other fluids. Markets served…
- IEX (IDEX CORP)
- FY2025 10-K: …greater stability to its operations, allows the Company to drive economies of scale, provides revenue streams that may help offset economic trends that are specific to individual economies and offers the Company an opportunity to access new markets for products. 8 Table of Contents The following table illustrates…
- FY2025 10-K: …mass spectrometry, in-vitro diagnostics/biotech fluidics and fluidic connections markets. IH&S maintains operations in Bristol, Connecticut; Carlsbad, California; Middleboro, Massachusetts; Oak Harbor, Washington; Rochester, New York; Rohnert Park, California; Zweibrücken, Germany and Saitama, Japan. • IDEX Materials…
- ITT (ITT INC.)
- FY2025 10-K: …end-users. IP's customers operate in global infrastructure and natural resource markets such as energy, chemical and petrochemical, pharmaceutical, general industrial, marine, mining, pulp and paper, food and beverage, power generation and biopharmaceutical. IP's marketplace-recognized brands include Goulds Pumps TM…
- FY2025 10-K: …and artificial intelligence continue to reshape manufacturing and industrial solutions. We view this shift as an opportunity to further enhance efficiency, reliability, and customer value but it also exposes us to additional cyber related risks and the possibility 30 that our competitors are able to adapt and utilize…
- FELE (FRANKLIN ELECTRIC CO., INC.)
- FY2025 10-K: …for the Company's growth as a global provider of water and energy systems, through geographic expansion and product line extensions, leveraging its global platform and competency in system design, all while consistently offering the best value to its customer. Markets and Applications The Company's business consists…
- FY2025 10-K: …inability to meet customer requirements, or could otherwise experience an interruption in operations that could negatively impact the Company's business and results of operations. The Company's operations are dependent on information technology infrastructure and failures could significantly affect its business. The…
- GTLS (CHART INDUSTRIES, INC.)
- FY2025 10-K: …the storage, distribution, vaporization, and application of industrial gases and certain hydrocarbons. Our Heat Transfer Systems segment supplies mission critical engineered equipment and systems used in the recovery, separation, liquefaction, and purification of hydrocarbons, LNG and industrial gases that span…
- FY2025 10-K: …Repair, Service & Leasing Our Repair, Service & Leasing segment (30.6% of consolidated sales for the year ended December 31, 2025) provides installation, retrofitting & refurbishment, spares, service, repair and maintenance of our products globally in addition to providing equipment leasing solutions to customers…
- FLS (FLOWSERVE CORP)
- FY2025 10-K: …power consumption, reduce carbon emissions, improve plant productivity and reliability, and provide operational cost savings. Digitization We are leveraging technology and data to improve our, and our customers', operations. With a goal of digitizing our existing installed base and new original equipment, we focus on…
- FY2025 10-K: …new and improved products and services depends on their initial and continued acceptance by our customers. Our businesses are affected by varying degrees of technological change and corresponding shifts in customer demand, which result in unpredictable product transitions, shortened life cycles and increased…
- PNR (Pentair plc)
- FY2025 10-K: …separation technologies for the oil and gas industry, residential and municipal wells, water treatment, wastewater solids handling, pressure boosting, circulation and transfer, fire suppression, flood control, agricultural irrigation and crop spray. • Water Solutions - The focus of this segment is to provide great…
- FY2025 10-K: …and infrastructure flow and industrial solutions businesses have not historically been impacted by seasonal weather trends. This change does not impact the competitive landscape of the Flow segment. Water Solutions The Water Solutions segment aims to provide great tasting, higher-quality water and ice while helping…
Precision and Science Technologies (reported)
- IEX (IDEX CORP)
- FY2025 10-K: …process. The CODM considers Adjusted EBITDA budget and forecast-to-actual variances when making decisions about the allocation of operating and capital resources to each segment. Adjusted EBITDA is also used in determining the compensation of certain employees. 68 Table of Contents The HST segment designs, produces…
- FY2025 10-K: …mass spectrometry, in-vitro diagnostics/biotech fluidics and fluidic connections markets. IH&S maintains operations in Bristol, Connecticut; Carlsbad, California; Middleboro, Massachusetts; Oak Harbor, Washington; Rochester, New York; Rohnert Park, California; Zweibrücken, Germany and Saitama, Japan. • IDEX Materials…
- GGG (GRACO INC.)
- FY2025 10-K: …Outside of the U.S., our operations located in Australia, Belgium, Spain, Japan, Italy, Korea, India, the P.R.C., the United Kingdom and Brazil distribute our Company's products and reinforce our commitment to those regions. Our manufacturing capacity is sufficient for current business demand levels. In 2024 and…
- FY2025 10-K: …much of the technology and many of the features inherent in our products, if we are unable to effectively meet these challenges, they could adversely affect our revenues and profits and hamper our ability to grow. Competitors and others may also initiate litigation to challenge the validity of our intellectual…
- DOV (DOVER Corp)
- FY2025 10-K: …service solutions used in textile, apparel, soft signage and specialty materials markets. Businesses within this segment leverage digital printing capabilities and operate business models that involve initial equipment and software sales followed by consumable, software, and service aftermarket revenue streams. Our…
- FY2025 10-K: Climate & Sustainability Technologies. For financial information about our segments and geographic areas, see Note 19 - Segment Information in the consolidated financial statements in Item 8 of this Form 10-K. Engineered Products Our Engineered Products segment provides a wide range of equipment, components, software,…
- ITT (ITT INC.)
- FY2025 10-K: …dedicated to supporting EPC firms as their needs are often distinct from those of distribution and end-user customers. The pump and valve markets we serve are highly competitive and fragmented. For most of our products, there are many regional competitors and a limited number of larger global peers. Primary customer…
- FY2025 10-K: ITT Friction Technologies, KONI, and Axtone. ITT Friction Technologies (Friction) Friction manufactures a range of brake pads installed as original equipment (OE) on passenger cars (both internal combustion engine vehicles, hybrids and electric vehicles) and light commercial vehicles for a variety of end customers and…
- FELE (FRANKLIN ELECTRIC CO., INC.)
- FY2025 10-K: …compounded annual sales growth in developing regions in recent years. Water Systems competes in each of its targeted markets based on product design, quality, performance, availability and price. The Company's principal competitors in the specialty water products industry are Grundfos Management A/S, Pentair, Inc.…
- FY2025 10-K: …for the Company's growth as a global provider of water and energy systems, through geographic expansion and product line extensions, leveraging its global platform and competency in system design, all while consistently offering the best value to its customer. Markets and Applications The Company's business consists…
- WTS (WATTS WATER TECHNOLOGIES INC)
- FY2025 10-K: …to inform and educate our channel partners, installers and end-use customers on how to maximize our product solutions. We do so through a variety of traditional and digital marketing avenues, including social media, trade shows, and advertising. We pride ourselves in providing industry leading product education…
- FY2025 10-K: …be at risk. We believe that our customers rigorously evaluate their suppliers on the basis of a number of factors, including product quality, price competitiveness, technical and manufacturing expertise, development and product design capability, new product innovation, reliability and timeliness of delivery,…
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.
- Economic-unit decomposition (SOTP): each disclosed business unit is assigned its native valuation basis before any multiple is applied. Operating units are valued on enterprise value; funded financial units are valued on their own common equity, because their borrowings fund earning assets rather than levering the parent. A company total is stated only once every material unit carries a supported value and the parent capital bridge reconciles.
- 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
Ingersoll Rand FY2025 10-K · Ingersoll Rand Q1 2026 earnings call · Ingersoll Rand Q1 2026 earnings release