Is Ingersoll Rand Inc (IR) overvalued?
On Equity Rank's model estimate, IR trades 12% above its fair value. Ingersoll Rand Inc (IR) last closed at $82.99; the multi-method model fair value is $74.06.
| Price | Model fair value | Price vs model |
|---|---|---|
| $82.99 | $74.06 | 12% above |
What the answer rests on
- 2 of 11 valuation methods put IR's value above its price and 9 put it below, so the methods mostly agree.
- To justify today's price, IR's free cash flow would need to grow about 11.7% a year for ten years (a reverse discounted cash flow). Over the last three years it actually grew 16.8% a year.
- IR trades at 23.9 times its last year's earnings, against a median of 24.9 for 187 profitable Industrials companies.
- Over the past year the price sat below the model fair value on 0% of trading days. The gap ranged from 6% above to 82% above the model fair value.
Read this before relying on it
The model fair value is an estimate from published financial statements. It is not a forecast of where the price goes, and it can be wrong. Within 10% either side we call it close to fair value: valuation models are not precise enough to read more into a smaller gap. Our own lists have no proven edge over the market yet; the live record shows every result, misses included.
Every valuation method behind IR's fair value · What prices assume · Other companies