• If you are wondering whether Pentair at around US$88.74 offers good value today or is asking too much for its quality, this article walks through the key numbers that matter for you.
• The stock has seen mixed returns, with a 1.9% decline over the last 7 days and 0.7% decline over the last 30 days, set against a 15.9% year to date decline but gains of 11.6% over 1 year, 73.2% over 3 years and 47.5% over 5 years.
• Recent price moves sit against a backdrop of steady investor interest in water solutions and industrial companies, where attention often shifts between growth potential and balance sheet strength. For Pentair, that context helps explain why the share price can fluctuate even when the long term story appears relatively consistent.
• Pentair currently holds a value score of 5 out of 6, and the next sections will compare what different valuation methods suggest about the stock while also pointing to a more complete way to think about value that appears at the end of the article.

Approach 1: Pentair Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow model estimates what a company could be worth by projecting its future cash flows and discounting them back to today to reflect risk and the time value of money.

For Pentair, the model uses a 2 Stage Free Cash Flow to Equity approach. It starts from last twelve months free cash flow of about $740.8 million. Analysts provide explicit free cash flow estimates out to 2029, with Simply Wall St extrapolating further to build a 10 year path. By 2035, the projected free cash flow used in the model is $1,265.2 million, all stated in $ terms.

When those future cash flows are discounted back, the model arrives at an estimated intrinsic value of about $99.08 per share. Compared with the current share price of around $88.74, the DCF output indicates the stock is 10.4% below this cash flow based estimate of value.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Pentair is undervalued by 10.4%. Track this in your watchlist or portfolio, or discover 58 more high quality undervalued stocks.

Approach 2: Pentair Price vs Earnings

For profitable companies, the P/E ratio is a useful way to think about what you are paying for each dollar of earnings. It links directly to how quickly earnings might grow and how predictable those earnings appear, which is why it is widely watched.

In general, higher growth expectations and lower perceived risk can justify a higher P/E, while slower growth and higher risk usually fit with a lower multiple. So the question is whether Pentair’s current P/E looks reasonable against what the market typically pays for similar businesses.

Pentair currently trades on a P/E of 22.08x, compared with the Machinery industry average of about 26.98x and a peer average of 28.47x. Simply Wall St’s Fair Ratio for Pentair is 24.73x. This Fair Ratio is a proprietary estimate of what the P/E might be given factors such as the company’s earnings growth profile, profit margins, risk indicators, industry and market cap. Because it adjusts for these company specific inputs, it can give a more tailored reference point than simple peer or industry comparisons.

With the actual P/E of 22.08x sitting below the Fair Ratio of 24.73x, Pentair’s P/E based valuation comes out as modestly attractive on this framework.

Result: UNDERVALUED

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Upgrade Your Decision Making: Choose your Pentair Narrative

Earlier it was mentioned that there is an even better way to think about valuation. Meet Narratives, where you set out your story for Pentair by linking assumptions about future revenue, earnings and margins to a forecast and a fair value. Then Simply Wall St’s Community page helps you compare that fair value with today’s share price, see how others are thinking, and watch those Narratives update automatically when new information such as earnings or news arrives. For example, you might align with a more optimistic Pentair view that ties to a fair value around US$130, or a cautious view closer to US$85. By choosing the one that best fits your expectations, you get a clearer, numbers based explanation of why the stock might look expensive, cheap or about right to you.

Do you think there's more to the story for Pentair? 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.