NORDSON CORPORATION (NDSN): what the price requires

At today's price, NORDSON CORPORATION (NDSN) is priced for +22.9% 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: 2026-07-14 · Exported: 2026-07-16 · Source: https://boothcheck.com/report/NDSN

Headline

FieldValue
TickerNDSN
CompanyNORDSON CORPORATION
Current price$286.02/sh
CompositionIndustrial Precision Solutions 48% / Medical and Fluid Solutions 30% / Advanced Technology Solutions 22%

What The Price Requires (Inversion)

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

FieldValue
Inversion basiswhole-company
Operating margin needed28.4%
Operating margin today25.4%
Margin expansion implied+3.0pp
Implied growth22.9%
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 9.2% cost of capital with 4% terminal growth over a 5-year stage; each 1pp of cost of capital moves the implied operating-profit growth ~7.6pp.

How unusual the bet is: elevated

ReferenceValue
vs own history+1.18σ
cohort percentile (of 225 peers)58
sustained it ~5 years at this level33%
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
Asset2.61x5expensive
Earnings2.83x5expensive
Relative1.44x5expensive
Growth0.93x3justifies

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 8.3%); the inversion above states its own rate.

Per-Model Detail (n=18)

ModelFamilyFVPrice/FVApplicableMethodology
DCF Perpetual GrowthGrowth$313.020.91xyesFCF base $0.8B, growth 8% (input: historical growth), terminal g 4.0%, WACC 8.3%, 6yr projection
DCF Exit MultipleGrowth$308.190.93xyesExit EV/EBITDA: 19.3x / 21.3x / 23.3x (bear / base = today's held flat / bull), 6yr
Relative ValuationRelative$204.171.40xyesP/E 21.71x (blended: static sector reference 18x + trailing (TTM) 30x), scenarios: 18.2x / 21.7x / 25.2x (bear / base = reference held flat / bull), EV/EBITDA 14.78x
Simple DDMGrowth——no—
Two-Stage DDMGrowth——no—
Simple Excess ReturnAsset$101.772.81xyesBV/sh $57.08, ROE (TTM) 16.5%, ke 9.3%
Two-Stage Excess ReturnAsset$134.142.13xyes5yr excess ROE then converge to ke=9.3%
Discounted Future Market CapGrowth$235.631.21xyesRev $2.9B, growth 8% (input: historical growth; tapered), Terminal P/S: 4.6x / 5.5x / 6.4x (bear / base = today's held flat / bull, cap 8x)
Peter Lynch Fair ValueRelative$199.141.44xyesEPS $9.36, growth 21% (input: historical EPS growth), PEG=1.43 (Fair)
Margin TrajectoryGrowth——no—
Earnings Power ValueEarnings$89.443.20xyesNormalized EBIT (5y avg op income, one-time charges added back) $0.69B × (1−17%) / WACC 8.3% → EPV (no growth)
Residual IncomeAsset$135.682.11xyesBV $57.08 + 5yr PV of (ROE (TTM) 16.5% − Kₑ 9.3%) × BV; BV grows 8.8%/yr
Graham NumberAsset$109.642.61xyes√(22.5 × EPS $9.36 × BVPS $57.08) — Graham's conservative floor
EV/EBITDA RelativeRelative$146.611.95xyesEBITDA $0.84B × sector EV/EBITDA 12.0x
FCF YieldEarnings$103.722.76xyesFCF $713.7M / Kₑ 9.3% — zero-growth perpetuity
SBC-Adj FCF YieldEarnings$99.752.87xyesSBC-adj FCF $0.69B (FCF $0.71B − SBC $0.02B) capitalized at Kₑ
Ben Graham FormulaEarnings$302.020.95xyesEPS $9.36 × (8.5 + 2×15.0%) × (4.4 / 5.3%)
ROIC-Justified P/BAsset$22.0312.98xyesBV $57.08 × (ROIC 3.2% / WACC 8.3%)
P/Sales SectorRelative$129.402.21xyesRevenue $2.90B × sector P/S 2.5x
PEG Fair ValueRelative$298.700.96xyesEPS $9.36 × (PEG 1.5 × growth 21.3% (input: historical EPS growth)) → PE 31.9x
Earnings YieldEarnings$101.192.83xyesEPS $9.36 / 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$1.8b
Net debt / NOPAT (after-tax)3.02x
Net debt / operating income (pre-tax)2.51x
Interest coverage7.4x
Share count CAGR (buyback)-1.0%
Burning cashno

Bullet Takeaways

Nordson makes precision dispensing and fluid-control equipment across three segments: Industrial Precision Solutions, Medical and Fluid Solutions, and Advanced Technology Solutions. The business runs at a 26% operating margin and posted record first-quarter fiscal 2026 results, with sales up 9% and adjusted EPS up 15%, prompting a guidance raise.

At $295.76 (June 27, 2026) the price pays about 25x company-wide operating income, which implies operating growth held at the self-funding ceiling for about five years. The static valuation families call the stock richly valued; only the forward growth method reaches the price, so the quote is a durability bet that sits in the upper half of the peer multiple range.

The balance sheet carries moderate leverage from a long history of acquisitions: net debt around $1.8 billion against trailing operating income of $766 million, so roughly 2.4x, with interest coverage near 8x. That is manageable in normal conditions but a real variable if the cyclical segments turn down.

Bull Case

The starting point is how far the price sits above the methods and what that spread is telling you. At about 25x operating income the asset, earnings-power, and peer-multiple frames all read richly valued, and only the forward growth-DCF reaches the quote. That pattern is the market paying a moat-and-durability premium, and in Nordson's case the premium is earned by a business that converts equipment sales into a long tail of recurring parts and consumables. The installed base across adhesive dispensing, medical fluid components, and electronics test and inspection keeps generating high-margin aftermarket revenue, which is why the company sustains a 26% operating margin through cycles and why the growth frame is the one that reaches the price.

The recent results justify the optimism. Nordson posted record first-quarter fiscal 2026 sales of $669 million, up 9% with 7% organic growth, record EBITDA of $203 million at 30% of sales, and record adjusted EPS of $2.37, up 15%, and it raised full-year guidance to sales of $2.86 to $2.98 billion and adjusted EPS of $11.00 to $11.60. Backlog grew about 4%. A diversified precision-technology company hitting records on both the top and bottom line while lifting guidance is demonstrating the pricing power and operating leverage that the premium multiple assumes.

The segment mix gives the growth real legs. Advanced Technology Solutions, where semiconductor applications are roughly half of revenue, drove double-digit organic growth as the chip cycle recovered, and the filing describes ATS integrating Nordson's dispensing, surface-treatment, and test-and-inspection technologies across electronics production (FY2025 10-K, accession 0000072331-25-000144). The Medical and Fluid Solutions segment spans drug delivery, surgical consumables, and biopharma components, secular end markets with steady demand (FY2025 10-K, accession 0000072331-25-000144). Exposure to the semiconductor upcycle and to durable medical demand, on top of the recurring industrial base, is the combination that supports paying up for durable compounding.

Bear Case

The fragility in Nordson is not the income statement, it is the capital structure layered on top of cyclical end markets. The company has grown for years through acquisitions, and it carries net debt of roughly $1.8 billion against trailing operating income of $766 million, about 2.4x, with most of its liquidity tied up rather than sitting in cash (liquid assets near $102 million). In a normal year, interest coverage near 8x makes that comfortable. The stress scenario is a downturn in the cyclical segments: Industrial Precision and the semiconductor-heavy Advanced Technology Solutions both move with industrial and chip capital spending, and if those roll over, operating income falls just as the debt service stays fixed, compressing coverage and free cash flow at the same time the company would want to keep acquiring.

The segment results already show the unevenness. Management called Medical and Fluid Solutions organic growth of 3% slower than expected in the most recent quarter, and Advanced Technology Solutions, while strong now on semiconductor demand, is the most cyclical part of the portfolio precisely because chips are roughly half of its revenue. A semiconductor pause would remove the segment that is currently carrying the growth narrative, and the price is paying a premium that assumes the strength persists. The historical base rate is sobering: only about 30% of comparable fast-growers sustained this pace for even five years.

The valuation magnifies any of this. The asset and earnings-power frames both flag the stock as expensive, the multiple sits in the upper half of the peer range, and the entire premium rests on the single growth-DCF method holding. With the balance sheet carrying acquisition debt and the most dynamic segment tied to the chip cycle, the bear case is a classic late-cycle setup: a high-quality compounder priced for continued records, where a cyclical downturn would hit earnings, coverage, and the multiple together, and there is no cheaper valuation frame underneath to cushion the move.

Valuation

At the current price the market is paying about 25x company-wide operating income, which implies operating growth held at its self-funding ceiling for roughly five years. The solve runs at a cost of capital near 9.4% with growth searched up to a 25% ceiling, and each additional point of growth moves the implied horizon by about 1.7 years. Treat the figures as approximate; they are a single inversion under fixed fade assumptions.

The family pattern is a clear durability premium. The asset-based, earnings-power, and peer-multiple methods all read richly valued, and only the forward growth-DCF reaches the price. When three frames sit below the quote and one stretches to meet it, the market is paying for compounding the static methods structurally cannot capture, here the recurring aftermarket economics of a large installed base. The reverse-DCF range on a whole-company basis centers below the current price with the high end approaching it, on an acceptable reliability flag, so the gap is real.

The grounding cuts both ways. On the bull side the near-term pace is within what Nordson has recently delivered, so the stretch is in duration rather than rate, and the company is now guiding to a current implied operating margin near 30% on the inversion, above its trailing 26%. On the bear side the multiple sits in the upper half of the peer range and only about 30% of comparable fast-growers sustained this level for five years. The valuation is defensible if you believe the aftermarket model and the semiconductor and medical end markets keep compounding; it is full if you weight the cyclicality and the acquisition leverage the static methods are flagging.

Catalysts

The most recent print, record first-quarter fiscal 2026 (reported early 2026), was a beat-and-raise: sales of $669 million, up 9% with 7% organic growth, record EBITDA of $203 million at 30% of sales, and record adjusted EPS of $2.37, up 15%, with backlog up about 4%. Management raised full-year guidance to sales of $2.86 to $2.98 billion and adjusted EPS of $11.00 to $11.60.

The segment dynamics are the forward catalysts. Advanced Technology Solutions, with semiconductors at roughly half its revenue, drove double-digit organic growth and is the most direct read on the chip-capital-spending cycle. Medical and Fluid Solutions grew 3% organically, slower than expected, with management maintaining a mid-single-digit outlook supported by order entry, backlog, and customer project activity, so the medical reacceleration is a catalyst to watch. Industrial Precision tracks broader industrial demand.

The watch items are the semiconductor cycle, the medical recovery, industrial capital spending, and the use of the balance sheet for further acquisitions. Continued organic growth with the guidance raise holding would support the premium multiple; a semiconductor pause or a stall in the medical segment would pressure a valuation priced for durable compounding. Sources: Nordson Q1 fiscal 2026 results and guidance (nordson.com; stocktitan.net; investing.com; simplywall.st), 2026.

Peer Cohorts (Per Segment, With Filing Citations)

Industrial Precision Solutions (reported)

Medical and Fluid Solutions (reported)

Advanced Technology Solutions (reported)

Identifiable assets (1 / Identifiable assets (1) (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.

View the full interactive NDSN report on boothcheck