• Wondering if Chart Industries at around US$206 a share is offering good value or asking too much? This article walks through what the current price really implies.
• The stock has been fairly steady in the near term, with returns of around 0.1% year to date and 39.5% over the past year. The key question for you is whether that recent performance still lines up with the underlying value.
• Recent attention on Chart Industries has focused on its role in capital goods and industrial equipment, with investors weighing how its position in that space fits into long term energy and infrastructure themes. At the same time, ongoing coverage has kept valuation and balance sheet strength in focus, which helps explain why the share price has not moved sharply over the last week or month.
• On Simply Wall St's value checks, Chart Industries currently scores 2 out of 6. The rest of this article will compare traditional valuation methods with that score before finishing with a more complete way to think about what the stock might be worth.

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

Approach 1: Chart Industries Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow, or DCF, model estimates what a stock might be worth by projecting the company’s future cash flows and then discounting those back into today’s dollars. It aims to answer a simple question for you: what are those future cash flows worth right now?

For Chart Industries, the model is a 2 Stage Free Cash Flow to Equity approach. The latest twelve month free cash flow is a loss of about $11.4 million. Analysts and extrapolated estimates then project free cash flow rising to $767 million by 2030, with a detailed path from $529.7 million in 2026 up through $966.0 million in 2035, all expressed in dollars and then discounted to today using Simply Wall St’s assumptions.

Adding those discounted cash flows together gives an estimated intrinsic value of about $246.67 per share. Compared with the current share price of around $206, the model indicates the stock is about 16.3% undervalued.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Chart Industries is undervalued by 16.3%. Track this in your watchlist or portfolio, or discover 46 more high quality undervalued stocks.

Approach 2: Chart Industries Price vs Sales

For companies where earnings are limited or volatile, the P/S ratio can be a useful way to think about value because it compares what you pay for each dollar of sales rather than profits that may swing around from year to year.

In general, higher growth expectations or lower perceived risk can justify a higher P/S multiple, while slower growth or higher risk tends to point to a lower, more conservative level. So what matters is not the P/S in isolation, but whether it is reasonable for the company’s profile.

Chart Industries currently trades on a P/S of about 2.38x. That sits slightly above the Machinery industry average of around 2.15x and below the peer group average of roughly 4.03x, which sends a mixed signal if you only look at simple comparisons. Simply Wall St’s Fair Ratio for Chart Industries is 1.85x, which is a proprietary estimate of what the P/S might be based on factors such as earnings growth, industry, profit margin, market cap and risk.

The Fair Ratio is more tailored than a basic industry or peer comparison because it adjusts for the company’s specific fundamentals rather than averaging everything together. With the actual 2.38x P/S sitting above the 1.85x Fair Ratio, the shares look more expensive than that customised benchmark suggests.

Result: OVERVALUED

P/S ratios tell one story, but what if the real opportunity lies elsewhere? Start investing in legacies, not executives. Discover our 20 top founder-led companies.

Upgrade Your Decision Making: Choose your Chart Industries Narrative

Earlier it was mentioned that there is an even better way to think about valuation. Narratives bring that to life by letting you connect your own story about Chart Industries to specific assumptions for future revenue, earnings and margins, then link those forecasts to a fair value that you can compare with the current share price.

On Simply Wall St’s Community page, Narratives are an accessible tool used by millions of investors, helping you see how your fair value for Chart Industries lines up against the live market price and how that gap might influence when you choose to buy or sell.

Because Narratives update when new information such as earnings releases or major news is added, your story, the forecast behind it and the fair value move together instead of staying fixed while the world changes.

For example, one investor’s Narrative for Chart Industries might assume a relatively cautious outlook and lead to a lower fair value, while another investor’s Narrative could be based on higher expected revenue and margins and therefore point to a higher fair value for the same stock.

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