Paying ~21× EV/EBITDA for ~5% growth — a de-rating if organic orders stay soft or M&A stalls
One-line thesis. Ingersoll Rand is a genuinely well-run, aftermarket-rich compressor and flow-control compounder (FY25 revenue $7.65B, 21% EBITDA margin, strong FCF) whose IRX operating system and serial M&A have compounded value for years — but at ~54× GAAP earnings and ~21× EV/EBITDA on roughly 5% forward revenue growth and flat-to-2% organic, the price already reflects the quality, so we rate it Watch and wait for a better entry.
◆ Synthos call — HoldIR is a solid business largely reflected at ~$82 — fine to keep, no reason to chase; it gets interesting again below ~$70.
Downside Risk (lower = safer)
6/10 · High
Modest 2.15× net-debt/EBITDA and 1.2 beta, but 54× GAAP / 21× EV-EBITDA on ~5% organic growth and 69% goodwill+intangibles leaves little cushion.
Growth Quality
6/10 · High
Durable aftermarket-heavy compounder — but only ~5% forward revenue and ~9% EPS CAGR, and FY25 GAAP margins slipped on M&A/amortization.
Exponential Potential
3/10 · Low
Mature industrial roll-up; growth is decelerating and organic is flat-to-2% — the multibagger case is not here.
What do the 5 tiers mean? (Core · Tactical · Watch · Hold · Avoid)
Buy — CoreOwn it as a foundation — start or add now, size it for years, let dips be gifts.
Buy — TacticalGood price + confirmed trend + a defined exit — buy the setup, not a marriage.
WatchWe want the business, just not at this price/setup — act only when the listed trigger hits.
HoldFine to keep if you own it — no reason to buy more; new money does better elsewhere.
AvoidDon't own it — the problem is the business or the expectations, so a cheaper price won't fix it.
In plain English
Ingersoll Rand makes the air compressors, pumps, vacuums and blowers that factories, water plants, hospitals and labs quietly depend on — the unglamorous machinery that keeps industrial processes running. A big chunk of its money comes from selling parts and service for equipment already installed, which is steady, repeat, high-margin business. The company is well managed and buys up smaller competitors to grow.
The catch: the stock is expensive for how fast the company is growing. You're paying a premium price, but sales are only growing about 5% a year — and stripping out acquisitions, the underlying business is barely growing at all right now. The stock has also fallen about 18% from its high and lagged the market badly over the past year.
Our verdict is Watch — a good company, but not at this price. Wait for a pullback or faster growth.
Here's what our three scores mean in everyday terms:
Downside Risk 6/10 (a bit above average). The balance sheet is fine and the business is stable, but the high price and a lot of "goodwill" on the books (the premium paid for acquisitions) mean a stumble could hurt.
Growth Quality 6/10 (decent). A solid, profitable, durable business — but growing only modestly, not rapidly.
Exponential Potential 3/10 (low). This is a mature, steady compounder. Don't expect it to multiply your money quickly.
The one big worry: you're paying a lot for slow growth. If acquisitions slow down or the core business stays soft, the stock could re-rate lower.
Solid = price · dashed = 50-day average · dotted = 200-day average · amber = 52-week high/low. Price above both averages is an uptrend.
Bollinger Bands 20-day average ± 2 standard deviations
The shaded band widens when the stock gets more volatile. Riding the upper edge = strong momentum (sometimes stretched); the lower edge = weak / potentially oversold.
Blue crossing above amber (bars flip green) = momentum turning up; below (bars red) = turning down. Bar height = the size of that gap.
Relative performance vs S&P 500 & its sector (XLI (sector)), set to 100 a year ago
Solid = IR · dashed = S&P 500 · dotted = XLI (sector). A rising line means it is beating that benchmark — the sector line shows whether it is a leader or laggard within its own group.
Darker bars = actual results, brighter = analyst estimates. Taller bars to the right = expected growth.
Key stats an RIA wants
Price$80.59
Market cap$32B
P/E trailing4×
P/E FY26E / FY27E23× / 21×
EV / Sales4.5×
EV / EBITDA21.2×
Gross margin38.2%
Net margin7.5%
Dividend yield0.10%
Beta1.195
52-wk range$69 – $99
RSI(14)72
50 / 200-DMA$76 / $81
12-mo return+-6% (SPY +21%)
Street target$94 ($80–$110)
Analyst grades8 Buy · 7 Hold · 0 Sell
FMP ratingB-
Next earnings2026-08-05
What the experts actually said 0 traceable claims on IR · showing the highest-conviction voices
Every claim reconciles to a real claim_id in the Synthos knowledge base — this is the evidence the verdict is built on, not vibes. Management (the company itself) is shown but half-weighted; one cautionary voice is included on purpose.
1. What it is
Ingersoll Rand Inc. (NYSE: IR), founded in 1859 and headquartered in Davidson, NC, is a global maker of mission-critical air, fluid, energy, medical and specialty technologies. It sells compressors, vacuum and blower systems, fluid-handling and dosing pumps, power tools and lifting equipment, plus the spare parts, consumables and service that go with them — under brands like Ingersoll Rand, Gardner Denver, CompAir, Nash, Milton Roy and Club Car. The company adopted its current name in March 2020 (formerly Gardner Denver Holdings) after the Reverse-Morris-Trust combination with Ingersoll-Rand's industrial segment. CEO Vicente Reynal; ~21,000 employees; fiscal year ends December 31.
The business runs on IRX (Ingersoll Rand Execution Excellence) — a lean/continuous-improvement operating system paired with disciplined, serial bolt-on M&A. A large share of revenue is recurring aftermarket (parts and service on a big installed base), which is the durability engine of the model.
Revenue mix (FY2025, from FMP segmentation):
By segment: Industrial Technologies & Services $6.06B (79%) · Precision & Science Technologies $1.59B (21%). P&ST (life-science / lab / aerospace-defense pumps) is the higher-margin, faster-growing segment (Q1'26 segment EBITDA margin 30.3% vs 26.7% in IT&S).
By geography: Americas $3.80B (50%) · EMEA $2.60B (34%) · Asia Pacific $1.25B (16%). Well diversified geographically — less US-concentrated than most S&P names.
2. The expert thesis — no coverage in the Synthos KB
There is no expert coverage of IR in the Synthos knowledge base: total_claims: 0, 0 net-bullish voices, 0 traceable claims. Unlike the mega-cap secular-growth names our expert panel gravitates to, Ingersoll Rand — a mid-cap industrial compounder — simply has not been discussed by the podcast/interview voices we distill. We will not manufacture a thesis we cannot cite.
Accordingly, this verdict is entirely fundamentals- and quant-driven: the financials, the analyst estimates, the valuation math and the technicals below. The Street's own sell-side view (grades: 8 Buy · 7 Hold · 0 Sell; consensus "Buy") is shown as context, not as Synthos conviction. Where we cite management (§9) it is explicitly management's own, half-weighted words.
3. Synthos scores & the Bull / Base / Bear cases
The one-glance judgment — three scores, 0–10, each anchored to real metrics (not probabilities we can't honestly calibrate):
Score
0–10
The read
Downside Risk(lower = safer)
6 · Moderate-High
Leverage is manageable (net-debt/EBITDA 2.15×, interest coverage 5.5×) and beta 1.2 is average — but 54× GAAP / 21× EV-EBITDA on ~5% growth, plus goodwill+intangibles = 69% of assets, leaves thin cushion if growth or M&A disappoints.
Growth Quality
6 · Decent
Durable, aftermarket-rich, high-teens-to-20% EBITDA margins and solid FCF conversion — but only ~5% forward revenue and ~9% adj-EPS CAGR, flat-to-2% organic, and GAAP margins slipped in FY25 on amortization/M&A. Good, not great.
Exponential Potential
3 · Low
A mature industrial roll-up whose growth is decelerating; organic is flat-to-2% and the model depends on serial acquisitions. Room to run exists (fragmented markets) but this is a compounder, not an exponential.
The three cases (our own scenario model — assumptions shown; each target is a ~12–18-month fair value). We deliberately do not attach probabilities: the base case is by definition the expected path, so a weighted blend would just restate it with false precision. Instead the cases bound the range, and the scores above summarize them.
Case
Key assumptions
Fair value
Bull
M&A pipeline delivers, organic re-accelerates to mid-single-digits, margins expand. FY27E adj-EPS beats to ~$4.10 (vs $3.85 cons); market keeps a premium ~25×.
~$104 (+29%)
Base(our anchor)
Guidance roughly holds — FY26 adj-EPS ~$3.51, FY27E ~$3.85; a steady ~5%-grower earns a ~21× forward multiple.
~$82 (+2%)
Bear
Organic orders stay soft, tariffs/Middle East linger, M&A slows; FY27E adj-EPS misses to ~$3.55 and the multiple de-rates to a more normal industrial ~16×.
~$58 (−28%)
Synthos fair value = the base case, ~$82 (+2%), with the full $58–$104 span as the honest range. Our base sits below the Street's $93.67 consensus because we are less willing to pay a 23× forward multiple for ~5% growth; our bull roughly matches the Street's high. This is a tracked call — the Forecaster Scorecard grades it once it matures.
4. Exponential Potential
Synthos separates compounders (durable high returns on capital) from exponentials (accelerating multi-baggers-from-here). IR is a quality compounder that sits firmly at the mature, decelerating end:
Forward growth: revenue CAGR FY25→FY29E ~5.2% ($7.65B → $9.31B); adj-EPS CAGR ~8.7% ($3.29 → $4.60) as buybacks and margin help lift EPS above revenue.
Acceleration (the 2nd derivative) is negative: revenue grew +5.7% in FY25 (a step down from +18.8% FY22 and +33.2% FY20 post-merger), and management guides FY26 to just +2.5% to +4.5% total — of which organic is flat-to-2% and ~2 points come from M&A. Growth is slowing, not speeding up.
Room to run: the flow-creation and life-science pump markets are large and fragmented, so the acquisition runway is real — but at a $31.5B cap in a low-single-digit organic category, there is no realistic path to a fast multibagger.
Reinvestment runway: capex is light (~2% of sales) and FCF is strong (~$1.22B FY25, ~90% of adj net income), most of which funds M&A and buybacks. Value creation is real but incremental.
Exponential Potential: Low (3/10). Own IR — if at all — for steady mid-single-digit compounding and disciplined capital allocation, not for exponential upside. A small, accelerating industrial with these margins would score 7–8; a decelerating mid-cap does not.
Revenue: FY25 $7.65B, +5.7% (FY24 $7.24B, +5.2% on FY23 $6.88B). Steady mid-single-digit growth; the post-merger surge (FY20 $3.97B → FY22 $5.92B) is well behind it.
Quarterly trajectory: Q1'25 $1.72B → Q2 $1.89B → Q3 $1.96B → Q4 $2.09B → Q1'26 $1.85B (+7.6% YoY reported, but management flagged organic revenue down ~2% in the core IT&S segment — reported growth is carried by M&A and FX).
Margins: gross 38.2% TTM, adj-EBITDA ~21% (Q1'26 adj-EBITDA margin 25.4%), operating ~18%, net 7.5% TTM. GAAP net margin is depressed by ~$500M/yr of acquisition amortization — the gap between GAAP EPS ($1.45) and adjusted EPS (~$3.29) is large and driven by intangible amortization, which is why we lean on the adjusted forward path for valuation but flag the GAAP reality for risk.
Earnings: GAAP net income $581M FY25 (down from $839M FY24 — FY25 GAAP was hit by higher amortization and other items); adjusted EPS ~$3.29. Note the wide GAAP/adjusted gap.
Cash flow: operating CF ~$1.36B, capex ~−$136M (light), FCF ~$1.22B FY25 — high-quality, ~90% adj-net-income conversion. FCF is the real strength of the model.
Balance sheet: cash $1.25B, total debt $4.85B, net debt $3.60B, net-debt/EBITDA 2.15× — investment-grade (letter rating B-/overall score 2 on FMP's scale), comfortably serviceable (interest coverage 5.5×). Goodwill+intangibles are $12.7B (69% of assets) — the tell of a roll-up.
6. Valuation — priced in or room?
IR is not cheap on any GAAP measure: 54× trailing GAAP EPS, 21× EV/EBITDA, 4.5× EV/sales, 3.1× book. The bull leans on the adjusted forward path — 23× FY26E → 21× FY27E → 18× FY29E adj-EPS — which is more palatable, but still a premium-to-market multiple for ~5% revenue growth. FMP's own valuation model scores it a B- (price-to-earnings sub-score 1/5 — i.e. expensive). A reverse read: at ~$80.59 the market is paying ~21× EV/EBITDA, which for a low-single-digit organic grower implies the market is crediting continued successful M&A and margin expansion — a reasonable bet given the track record, but with little margin for error. Street targets (context): consensus $93.67, high $110, low $80. Our $82 base sits below consensus because we won't underwrite a 23× forward multiple on ~5% growth. Fair-to-full, not a bargain.
7. Technicals (from the tech block)
Trend:weak/mixed. $80.59 sits above the 50-DMA ($75.71) but below the 200-DMA ($81.45) — a stock that has bounced recently but is still under its longer-term average, i.e. not a clean uptrend.
Location:−18.4% off the 52-week high ($98.76), +17.6% off the 52-week low ($68.54); max drawdown from peak −23.5%. This is a name well off its highs, not a leader near them.
Momentum: RSI(14) 71.6 — overbought (>70), so the recent bounce is stretched; MACD +1.9 (mildly positive). A poor short-term entry.
Relative strength (the tell): IR −5.5% 12-mo vs SPY +20.6% and QQQ +30.3% — material underperformance of both the market and the growth index over the past year. The 3-month +73.8%(*) figure in the feed looks anomalous vs the 12-month −5.5% and 6-month −7.4%; we weight the consistent 6- and 12-month underperformance and treat the 3-month print with caution.
Read: technicals do not confirm a buy — below the 200-DMA, overbought on RSI, and a year of lagging the market. If anything they argue for patience: wait for the RSI to cool and for price to reclaim the 200-DMA on improving organic orders.
8. Moat & competitive position
IR's moat is real but ordinary-industrial rather than exceptional: (1) a large installed base + aftermarket — parts and service revenue that recurs and carries high margins and switching friction; (2) brand and channel breadth across compressors, vacuum, blowers and specialty pumps; (3) IRX operating discipline that has driven consistent margin expansion and made IR a preferred acquirer of bolt-ons. The limits: air compression and industrial pumps are competitive, cyclical, and capital-goods-exposed — organic growth tracks industrial production, and the model's growth premium depends on continued M&A execution rather than pure organic pull.
Peer set (market cap): Eaton $155B, Illinois Tool Works $78B, Emerson $78B, AMETEK $54B, Dover $29B, Xylem $28B, IDEX $17B, ITT $17B, Graco $12B, Donaldson $10B, Flowserve $9B, A.O. Smith $9B, Franklin Electric $5B. IR sits mid-pack on size and commands a growth-and-quality multiple in line with the better-run diversified industrials (IEX, DOV, AME) — appropriate, but not obviously cheap within the group.
9. Management, capital allocation & guidance
Capital allocation: disciplined and shareholder-friendly — FY25 returned ~$1.02B via buybacks plus a token dividend (~0.1% yield, payout ~5%), while deploying cash into bolt-on M&A ($525M acquisitions FY25; Scinomix and Fox s.r.l. announced 2026). The buyback-plus-M&A mix is the engine that lifts EPS above revenue growth.
Insider activity: CEO Vicente Reynal exercised options and sold the resulting shares in March/April 2026 ($88–$94), and a director had routine RSU vesting (May 2026) — these read as normal option-exercise-and-sell and vesting activity, not a discretionary red-flag cluster, but the CEO is a consistent net seller at these prices, which we note.
Management's own guidance (the earnings-release track, half-weighted): from the Q1'26 release (SEC 8-K, filed 2026-04-28), management maintained full-year 2026 guidance: revenue growth +2.5% to +4.5% (organic flat-to-2%, M&A ~+2%, FX ~+0.5%), Adjusted EBITDA $2,130M–$2,190M, Adjusted EPS $3.45–$3.57 (~+5% at the midpoint), FCF/adj-net-income conversion ~95%, capex ~2% of sales, ~394M share count. Management said it expects no significant full-year impact from the recent Section 232 tariff changes or the Middle East conflict, and expects delayed Middle East orders to be recovered over the balance of the year. These are management's own, self-interested words (half-weight); they corroborate — but do not exceed — the ~5% growth, ~5% EPS-growth picture the numbers already show.
10. Catalysts & what to watch
Next earnings: 2026-07-30 (Q2'26; Street EPS $0.83, revenue ~$1.95B). Key line: organic orders and book-to-bill — IT&S organic was soft in Q1'26 (orders ~flat ex-Middle East), and the thesis needs organic to firm.
Organic revenue inflection: flat-to-2% organic is the crux; a return toward mid-single-digit organic would justify the multiple, continued softness would not.
M&A cadence and integration: Scinomix, Fox s.r.l. and the broader pipeline — the growth premium depends on it.
Margin/tariff: whether Section 232 tariffs stay one-for-one neutral (as guided) or begin to pressure margins.
P&ST momentum: the higher-margin life-science/aerospace segment (30%+ EBITDA margin, +4% organic in Q1'26) is the best growth tell in the mix.
Thesis tripwires (what would change the call): two more quarters of negative IT&S organic revenue; adj-EBITDA margin compression below ~24%; an M&A pause with no organic offset; or a multiple that stays ≥23× forward while growth stays ~5% (upgrade to Watch-negative). Conversely, a pullback toward the mid-$60s (≈16–17× forward) with steady fundamentals would flip this toward Buy — Tactical.
11. Key risks
Valuation / de-rating (primary): ~54× GAAP, ~21× EV/EBITDA on ~5% growth — the single biggest risk is simple multiple compression toward a normal industrial ~16× if growth or M&A disappoints.
Organic softness & cyclicality: flat-to-2% organic and capital-goods exposure mean a factory/industrial slowdown hits directly.
M&A dependence: the growth premium relies on continued accretive acquisitions and clean integration; a stumble (overpayment or integration miss) would dent both growth and returns.
Goodwill/intangible weight: 69% of assets are goodwill+intangibles; a large impairment (if an acquired business underperforms) would hit GAAP equity and earnings.
Macro/geopolitical & tariffs: Middle East order timing and Section 232 tariffs are current overhangs; management expects them neutral but they are live risks.
No expert corroboration: with zero KB coverage, there is no independent high-conviction voice to lean on — the entire call rests on the quant/fundamental read, which is itself only fair-to-neutral here.
12. Verdict, position sizing & monitoring
Watch. Ingersoll Rand is a genuinely well-run, aftermarket-rich, high-FCF industrial compounder with a proven IRX operating discipline and a credible M&A engine — a quality business. But quality is not the question; price is. At ~54× GAAP and ~21× EV/EBITDA for ~5% forward revenue growth (flat-to-2% organic), the stock already discounts the quality, the technicals are weak (below the 200-DMA, RSI overbought, a year of lagging the market), and there is no expert conviction in the Synthos KB to justify paying up. Our base-case fair value of ~$82 is essentially the current price — meaning the risk/reward is roughly balanced, which is the definition of a Watch.
Sizing: if owned as an industrial-quality holding, keep it small (~1–2%); there is no informational or valuation edge here to justify a larger, conviction-weighted position.
Monitoring: re-underwrite on the §10 tripwires; a pullback into the mid-$60s (≈16–17× forward) or a clear organic re-acceleration would move this toward Buy — Tactical. Formal re-score each earnings print.
Single biggest risk: paying a premium multiple for slow growth — a de-rating is the main way to lose money here.
This verdict is logged as a tracked Synthos call as of 2026-07-03 at $80.59.
Provenance & disclosures
Traceability:0 KB claims, breadth 0 — no expert coverage of IR in the Synthos knowledge base. This call is explicitly fundamentals- and quant-driven; no conviction is claimed beyond the numbers. Fabricated conviction is structurally impossible (claim-ID reconciliation), and none is asserted here.
Data as-of: fundamentals 2026-03-31 (Q1'26) · estimates & prices 2026-07-02/03 · no expert claims. Forward figures are analyst consensus (FMP) or management guidance, labeled as estimates. Note the large GAAP-vs-adjusted EPS gap (driven by ~$0.5B/yr acquisition amortization); forward multiples use adjusted EPS, trailing 54× uses GAAP.
Management caveat: the FY2026 guidance in §9 is management's own, self-interested words from the SEC 8-K earnings release (2026-04-28), half-weighted by design.
Not investment advice. Independent research, educational and informational only, never personalized. Hypothetical/forward figures are labeled; the only performance numbers Synthos will headline are the live, real-money Flagship's.
Version: 2026-07-03. Prior versions available via the deep-dive version dropdown ("based on the info at the time").