Snap-on Inc (SNA): what the price requires
At today's price, Snap-on Inc (SNA) is priced for +15.7% 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/SNA
Headline
| Field | Value |
|---|---|
| Ticker | SNA |
| Company | Snap-on Inc |
| Sector / Industry | Industrials |
| Current price | $400.71/sh |
| Composition | Tools 49% / Diagnostics, information and management systems 22% / Equipment 21% / Financial services revenue 8% |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | segment |
| Implied growth | 15.7% |
Solve inputs: computed at a 9% cost of capital with 5% terminal growth over a 5-year stage; each 1pp of cost of capital moves the implied operating-profit growth ~8.2pp.
How unusual the bet is: within-range
| Reference | Value |
|---|---|
| cohort percentile (of 225 peers) | 58 |
| sustained it ~5 years at this level | 43% |
| 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 | 1.81x | 5 | expensive |
| Earnings | 1.80x | 5 | expensive |
| Relative | 1.62x | 5 | expensive |
| Growth | 1.03x | 3 | expensive |
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 8.6%); the inversion above states its own rate.
Per-Model Detail (n=18)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $388.58 | 1.03x | yes | FCF base $1.2B, growth 3% (input: historical growth), terminal g 3.0%, WACC 8.6%, 5yr projection |
| DCF Exit Multiple | Growth | $387.24 | 1.03x | yes | Exit EV/EBITDA: 13.5x / 15.5x / 17.5x (bear / base = today's held flat / bull), 5yr |
| Relative Valuation | Relative | $335.49 | 1.19x | yes | P/E 18x (static sector reference · 2026-04), scenarios: 15.1x / 18.0x / 20.9x (bear / base = reference held flat / bull), EV/EBITDA 12x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $209.93 | 1.91x | yes | BV/sh $113.05, ROE (TTM) 17.2%, ke 9.3% |
| Two-Stage Excess Return | Asset | $282.36 | 1.42x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $286.41 | 1.40x | yes | Rev $5.2B, growth 3% (input: historical growth; tapered), Terminal P/S: 3.4x / 4.0x / 4.7x (bear / base = today's held flat / bull, cap 8x) |
| Peter Lynch Fair Value | Relative | $232.44 | 1.72x | yes | EPS $19.37, growth 2% (input: historical EPS growth), PEG=13.37 (Overvalued) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $222.13 | 1.80x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $1.27B × (1−22%) / WACC 8.6% → EPV (no growth) |
| Residual Income | Asset | $283.44 | 1.41x | yes | BV $113.05 + 5yr PV of (ROE (TTM) 17.2% − Kₑ 9.3%) × BV; BV grows 8.8%/yr |
| Graham Number | Asset | $221.97 | 1.81x | yes | √(22.5 × EPS $19.37 × BVPS $113.05) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $310.97 | 1.29x | yes | EBITDA $1.35B × sector EV/EBITDA 12.0x |
| FCF Yield | Earnings | $239.23 | 1.67x | yes | FCF $1151.9M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $232.83 | 1.72x | yes | SBC-adj FCF $1.12B (FCF $1.15B − SBC $0.03B) capitalized at Kₑ |
| Ben Graham Formula | Earnings | $188.10 | 2.13x | yes | EPS $19.37 × (8.5 + 2×1.5%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | $56.37 | 7.11x | yes | BV $113.05 × (ROIC 4.3% / WACC 8.6%) |
| P/Sales Sector | Relative | $247.68 | 1.62x | yes | Revenue $5.22B × sector P/S 2.5x |
| PEG Fair Value | Relative | $96.85 | 4.14x | yes | EPS $19.37 × (PEG 1.5 × growth 1.5% (input: historical EPS growth)) → PE 2.3x |
| Earnings Yield | Earnings | $209.41 | 1.91x | yes | EPS $19.37 / 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 cash | $532.7m |
| Net debt / NOPAT (after-tax) | -0.52x (net cash) |
| Net debt / operating income (pre-tax) | -0.41x (net cash) |
| Interest coverage | 26.4x |
| Share count CAGR (buyback) | -0.7% |
| Burning cash | no |
Bullet Takeaways
- Snap-on pairs a franchise van channel with a captive finance book, extending roughly four-year secured credit to the technicians who buy its tools (accession 0000091440-26-000045), a structure that compounds sales into interest income but ties two profit streams to the same customer's health.
- At $402.79 only the growth-anchored methods reach the price, and the premium rests on the repair systems and information segment growing about 16.6 percent a year for five years, a pace roughly 42 percent of comparable growers have historically sustained.
- Watch the second-quarter report in the second half of July 2026, with Q2 consensus EPS of $4.90 against $4.72 a year ago, and within it the Tools Group's organic growth and whether deferred big-ticket storage demand recovers.
Bull Case
Follow the cash and the company explains itself. Snap-on sits on $533 million of net cash, earns interest coverage above 26 times, and has shrunk its share count about 0.7 percent a year over the last four years, which is what capital allocation looks like when a tool company quietly runs itself like a compounder. The most distinctive deployment is the captive finance arm: the FY2025 10-K describes extending credit to technicians and shop owners "to purchase tools, diagnostics, and equipment products on an extended-term payment plan, with average payment terms of approximately four years", with receivables "generally secured by the underlying tools, diagnostics, and/or equipment" (accession 0000091440-26-000045). Management is not just selling wrenches; it is writing secured paper against its own products to customers it sees weekly through the franchise van channel, turning the balance sheet into a second engine on top of the tools.
The operating engine keeps grinding forward. First-quarter 2026 sales rose 5.8 percent to $1,207.2 million with organic growth of 3.4 percent, and net earnings reached $247.0 million, or $4.69 per diluted share, against $4.51 a year earlier. The Tools Group grew 5.0 percent to $486.0 million and expanded its operating margin to 21.6 percent from 20.0 percent, with gains in both the U.S. and international operations. That margin expansion arrived while technicians were reportedly cautious on big-ticket purchases, which says the pricing power and mix management are doing the work demand is not.
The structural tailwind is that cars keep getting older and more complicated. The 10-K frames the strategy as innovating "to extend its leadership position in the expanding vehicle service and repair market sector" and notes that "the development of emerging vehicle drivetrains and advanced driver assistance systems (ADAS) has increased in recent years", which the company treats as opportunity: more complex vehicles need more sophisticated diagnostics (accession 0000091440-26-000045). That is precisely the segment the market is paying up for, the repair systems and information business, and the priced-in growth there sits within the range comparable growers have plausibly sustained over a five-year window. The bull is not asked to believe anything heroic: mid-teens growth in the diagnostics franchise for five years, a fortress balance sheet underneath, and a management team that returns the rest.
Bear Case
Every cycle question about Snap-on runs through the technician's wallet. The customer base is auto repair professionals buying on the van, and the recent demand signal has been soft: technician confidence has been described as low despite strong employment and wages, with big-ticket purchases like tool storage deferred in favor of smaller hand tools. That is the textbook late-cycle pattern for this business, high-margin small items holding up while the discretionary capital goods that carry the franchisees' economics stall. The Tools Group's 21.6 percent first-quarter operating margin is the strongest reading in the report, and margins that strong on flat-to-modest organic demand raise the sustainable-versus-peak question: if the mix normalizes back toward storage and equipment, or if franchisee sell-through weakens further, the margin does not have to fall far to take the earnings growth with it.
The credit book adds a cyclical amplifier the tool business alone would not have. Snap-on finances its own customers on roughly four-year secured terms (accession 0000091440-26-000045), and its finance cohort trades alongside subprime and near-prime lenders for a reason: when technician incomes tighten, the same downturn hits product sales and receivable performance together. The 10-K's own write-off mechanics, with receivables charged off by 180 days past due (accession 0000091440-26-000045), are standard, but the structure means a repair-demand recession would arrive twice, once through the P&L and once through provisions.
Then there is the price. At $402.79, only the growth-anchored cash-flow methods reach the quote; the asset-value and earnings-power reads sit at little more than half the price, and peer multiples land about 40 percent below it. The premium is carried specifically by the repair systems and information business, where the price implies operating growth around 16.6 percent a year for five years; historically, only about 42 percent of comparable fast growers sustained that pace for that long. Those are coin-flip-or-better odds, which is why the assumption reads as plausible rather than reckless, but the point stands: a buyer at today's price is paying for the best segment to keep compounding in the upper half of its peer range while the van channel, the technician cycle, and the credit book all cooperate. Stanley Black & Decker's tools franchise is a reminder of how a storied brand trades once the market stops granting that cooperation.
Valuation
The premium in this price has an address: the Repair Systems & Information Group. Inverting today's $402.79 (July 10, 2026) at a cost of capital around 9 percent with 5 percent terminal growth, the market is paying for that segment's operating profit to grow about 16.6 percent a year for five years. Two useful qualifiers come with the solve. It is sensitive, with each percentage point of cost of capital moving the implied growth around 8 points, so treat the figures as approximate; and it is not extreme, sitting in the upper half of the peer multiple range, with about 42 percent of comparable fast growers historically sustaining such a pace over five years. The read is a demanding-but-plausible bet on the diagnostics and shop-software franchise, not a moonshot.
The methods split along the usual moat-premium line. Only the growth-anchored cash-flow methods reach the price, and they land essentially on it; the asset-value and earnings-power families sit at a little more than half the quote, and peer multiples land roughly 40 percent below. Nothing static about Snap-on's trailing numbers defends $402.79; the durability of the franchise has to do it. The trailing inputs themselves are clean: operating income of about $1.33 billion on both the EDGAR and record bases, first-quarter sales of $1,207.2 million up 5.8 percent, and a Tools Group operating margin of 21.6 percent, up from 20.0 percent a year earlier. The financial services arm runs on filing-disclosed mechanics, extended-term contracts averaging "approximately four years" secured by the underlying product (accession 0000091440-26-000045), which makes its earnings quality legible but ties a slice of the profit stream to technician credit performance.
The balance sheet is the quiet strength under all of it. Net cash of $533 million against $1.22 billion of gross debt, interest coverage over 26 times, no cash burn, and a share count that has declined about 0.7 percent a year for four years: this is a company whose downside is cyclical, not structural. What the price asks of the buyer is patience with a specific compounding claim, five more years of mid-teens growth from the repair-information franchise while the rest of the company holds its ground.
Catalysts
The first-quarter 2026 report set a steady baseline: sales of $1,207.2 million rose 5.8 percent with organic growth of 3.4 percent, and net earnings of $247.0 million produced diluted EPS of $4.69 against $4.51 a year earlier. The Tools Group grew 5.0 percent to $486.0 million, including a 3.4 percent organic gain and favorable currency, and expanded its operating margin from 20.0 percent to 21.6 percent.
The next dated event is the second-quarter 2026 report, due in the second half of July 2026, with Q2 consensus EPS of $4.90, up 3.8 percent from $4.72 in the year-ago quarter. The reads that matter most inside the print: whether Tools Group organic growth holds after a stretch in which technician confidence was described as low and large purchases were deferred toward high-margin hand tools, and whether the early stabilization observed in tool storage demand and franchisee confidence extends into a second quarter.
The slower-moving catalyst is vehicle complexity. The company's own filing points to advanced driver assistance systems and emerging drivetrains as expanding service and repair opportunity (accession 0000091440-26-000045), and the repair systems and information segment, which carries the valuation premium, is where that demand lands as diagnostics hardware and shop software. Progress there, quarter by quarter, is the evidence the price needs.
Peer Cohorts (Per Segment, With Filing Citations)
Commercial & Industrial Group (reported)
- SWK (STANLEY BLACK & DECKER, INC.)
- (no filing in the citation store)
- DOV (DOVER Corp)
- (no filing in the citation store)
- ITW (ILLINOIS TOOL WORKS INC)
- (no filing in the citation store)
- IEX (IDEX CORP)
- (no filing in the citation store)
- NDSN (NORDSON CORPORATION)
- (no filing in the citation store)
- PH (PARKER-HANNIFIN CORPORATION)
- (no filing in the citation store)
- EMR (EMERSON ELECTRIC CO.)
- (no filing in the citation store)
Snap-on Tools Group (reported)
- SWK (STANLEY BLACK & DECKER, INC.)
- (no filing in the citation store)
- MMM (3M COMPANY)
- (no filing in the citation store)
- GGG (GRACO INC.)
- (no filing in the citation store)
- DOV (DOVER Corp)
- (no filing in the citation store)
Repair Systems & Information Group (reported)
- SWK (STANLEY BLACK & DECKER, INC.)
- (no filing in the citation store)
- ITW (ILLINOIS TOOL WORKS INC)
- (no filing in the citation store)
- DOV (DOVER Corp)
- (no filing in the citation store)
- NDSN (NORDSON CORPORATION)
- (no filing in the citation store)
- GGG (GRACO INC.)
- (no filing in the citation store)
- IEX (IDEX CORP)
- (no filing in the citation store)
- PH (PARKER-HANNIFIN CORPORATION)
- (no filing in the citation store)
- PNR (Pentair plc)
- (no filing in the citation store)
Financial Services (reported)
- CACC (CREDIT ACCEPTANCE CORP)
- (no filing in the citation store)
- OMF (ONEMAIN HOLDINGS, INC.)
- (no filing in the citation store)
- ALLY (Ally Financial Inc.)
- (no filing in the citation store)
- SLM (SLM Corp)
- (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
Yahoo Finance earnings preview, July 2026 · Q1 2026 earnings release, April 2026 · earnings coverage, Alphastreet, 2026 · Alphastreet coverage, 2026