• If you are wondering whether Ingersoll Rand stock still offers solid value at current levels, the answer depends on how you look at price versus fundamentals and what kind of return profile you want.
• The share price last closed at US$71.62, after slipping 1.1% over the past week, 8.2% over the past month, and 10.2% year to date, while still sitting above levels from three and five years ago with returns of 16.8% and 48.5% over those periods.
• Recent moves are happening against a backdrop where investors are reassessing capital goods stocks, with attention on balance sheet strength, cash generation, and how companies are positioned for long term projects. For Ingersoll Rand, that means the current price action is being viewed alongside its track record and how consistently it can support growth investments and shareholder returns.
• Simply Wall St currently gives Ingersoll Rand a 2/6 valuation score. The next step is to break down what different valuation approaches say about the stock today and then look at a more complete way to think about value that goes beyond a single set of multiples.

Ingersoll Rand scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Ingersoll Rand Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow, or DCF, model takes projected future cash flows, discounts them back to today using a required rate of return, and sums them to estimate what the business could be worth right now.

For Ingersoll Rand, the model used is a 2 Stage Free Cash Flow to Equity approach. The latest twelve month Free Cash Flow stands at about $1.16b. Analyst and extrapolated estimates have Free Cash Flow reaching around $2.32b in 2035, with ten year projections between 2026 and 2035 ranging from roughly $1.31b to $2.32b, all expressed in $.

Simply Wall St aggregates these projected cash flows, discounting each year back to today, to arrive at an estimated intrinsic value of $78.26 per share. Compared with the recent share price of $71.62, this implies the stock is about 8.5% below the DCF estimate, which sits within a range that can reasonably be viewed as close to fair value.

Result: ABOUT RIGHT

Ingersoll Rand is fairly valued according to our Discounted Cash Flow (DCF), but this can change at a moment's notice. Track the value in your watchlist or portfolio and be alerted on when to act.

Approach 2: Ingersoll Rand Price vs Earnings

For profitable companies, the P/E ratio is a useful way to relate what you pay for each share to the earnings that support it, which is often how many investors think about value in practical terms.

What feels like a “normal” or “fair” P/E depends on how quickly earnings are expected to grow and how risky those earnings are. Higher growth or lower perceived risk can justify a higher multiple, while slower or more uncertain earnings usually call for a lower one.

Ingersoll Rand currently trades on a P/E of 47.75x. That sits above the Machinery industry average P/E of 26.79x and above a peer group average of 33.60x. Simply Wall St’s Fair Ratio for Ingersoll Rand is 35.81x, which is the P/E that would typically be expected given factors such as its earnings growth profile, industry, profit margins, market cap and risk characteristics.

The Fair Ratio is more tailored than a simple peer or industry comparison because it adjusts for those company specific factors rather than assuming all Machinery stocks deserve the same multiple. Comparing the current 47.75x P/E with the 35.81x Fair Ratio suggests the stock is trading above what this framework would view as justified on fundamentals.

Result: OVERVALUED

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Upgrade Your Decision Making: Choose your Ingersoll Rand Narrative

Earlier it was mentioned that there is an even better way to understand valuation. Narratives on Simply Wall St’s Community page let you attach a clear story about Ingersoll Rand to concrete numbers like expected revenue, earnings, margins, and fair value. You can then compare that fair value with today’s price and see, in real time, how your view changes as new news or earnings arrive. You might lean closer to a cautious case that points to fair value around US$82, a more optimistic view near US$117, or the consensus middle ground around US$94. This can help you decide for yourself how the stock fits your portfolio and time horizon.

Do you think there's more to the story for Ingersoll Rand? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.