Ingersoll Rand Inc.

Comprehensive Analysis of IR Stock

Technical Perspective IR demonstrates strong momentum with an 18% surge over three months, significantly outperforming the broader market. However, trading near its 52-week high and showing a high beta of 1.3, the stock appears overbought in the near term and carries elevated volatility. While the recovery from lows is impressive, investors should be cautious of potential short-term pullbacks.

Fundamental Assessment The company shows solid revenue growth but faces profitability pressure, with Q4 gross margins contracting sharply to 24.1%. Financially, IR maintains a healthy balance sheet with manageable debt and strong liquidity, though operational efficiency metrics like ROE (2.6%) and asset turnover (0.11) indicate room for improvement. The fundamentals support stability but reveal some operational headwinds.

Valuation & Risk Considerations IR's valuation appears stretched, with a TTM P/E of 63 and a high PEG ratio of 3.0, suggesting the stock is priced premium relative to its growth outlook. Risks include above-market volatility and susceptibility to downturns, though low short interest indicates no significant bearish sentiment. The lack of peer data makes relative valuation challenging.

---

Investment Recommendation

Consider a Buy for Growth-Oriented Investors IR presents a compelling case for investors seeking momentum and strong market outperformance, backed by a robust financial position. However, the premium valuation and recent overbought technicals suggest waiting for a modest pullback to improve the risk-reward profile. Suitable for those comfortable with higher volatility and a longer-term growth perspective, but less ideal for value-focused or risk-averse portfolios.

RockFlow Model Forecast: Three Scenarios for 2026

Based on the comprehensive analysis provided, the 12-month outlook for IR (Ingersoll Rand) is cautiously optimistic, contingent on the execution of its operational strategy and market conditions.

The key catalyst for potential upside is the company's strong revenue growth momentum and its robust balance sheet, which provides flexibility to invest in innovation and navigate economic cycles. However, this is tempered by significant risks, including stretched valuations (63 TTM P/E) that limit near-term upside, persistent pressure on profit margins, and the stock's high volatility (beta of 1.3), making it susceptible to broader market pullbacks. Given the lack of a consensus analyst target, a prudent target price range is difficult to establish; investors should focus on a potential entry point on a pullback from current overbought levels rather than chasing the momentum, with a view towards long-term growth as operational efficiencies improve.

Wall Street Consensus

Most Wall Street analysts are optimistic about Ingersoll Rand Inc.'s 12-month outlook, with consensus target around $94.14, indicating expected upside potential.

Overall, IR has investment potential but also faces challenges. Here are key factors to weigh before investing.

IR has delivered strong positive momentum across multiple timeframes, significantly outperforming the broader market. The stock demonstrates impressive recovery characteristics from its 52-week lows while maintaining elevated volatility relative to the market.

Over the past three months, IR has surged 18.37% with notable recent momentum showing a 9.05% gain in the past month. The stock has substantially outperformed the market by 14.57% during this period, though its high beta of 1.309 indicates this performance comes with above-average volatility.

Currently trading at $92.97, IR sits approximately 72% above its 52-week low but remains 8% below its peak, positioning it in the upper portion of its yearly range. Given the substantial rally and proximity to the 52-week high, the stock appears potentially overbought in the near term despite its strong momentum.

Revenue & Profitability IR reported Q4 revenue of $2.09 billion, showing sequential growth from Q3's $1.96 billion. However, profitability metrics weakened significantly, with the gross profit margin declining sharply from 43.7% to 24.1% quarter-over-quarter. Despite this contraction, the company maintained a solid net profit margin of 12.7%, though operating income showed volatility between quarters.

Financial Health The company maintains a strong liquidity position with a current ratio of 2.06 and quick ratio of 1.49. Debt levels appear manageable with a conservative debt-to-equity ratio of 0.47 and healthy interest coverage of 10.2x. The cash flow to debt ratio of 0.10 suggests adequate, though not robust, capacity to service obligations from operating cash flows.

Operational Efficiency IR's operational efficiency shows mixed results, with a modest return on equity of 2.6% and return on assets of 1.5%. Asset turnover remains low at 0.11, indicating potential underutilization of the asset base. The cash conversion cycle of 75 days reflects reasonable working capital management, though inventory and receivables turnover rates suggest room for improvement in asset utilization.

Valuation Level: IR's elevated TTM PE ratio of 62.87 indicates a premium valuation relative to general market averages, which often center around 15-20x earnings. The forward PE of approximately 29.25 suggests anticipated earnings growth is expected to partially compress this premium, yet the very high PEG ratio of 3.02 implies the stock may still be richly priced based on its growth trajectory. This combination of metrics signals the stock is likely overvalued from a standard earnings-based perspective.

Peer Comparison: A peer comparison cannot be performed as industry average data is unavailable. Analysis is therefore limited to the stock's absolute valuation metrics rather than its relative standing within its sector. The high EV/EBITDA of 64.45 reinforces the conclusion of a premium valuation, but the lack of an industry benchmark prevents a definitive assessment of whether this premium is justified by sector-specific norms.

Volatility Risk: IR exhibits above-average volatility, as evidenced by a beta of 1.309, indicating it is approximately 31% more volatile than the broader market. This is further confirmed by a significant maximum drawdown of -21.68% over the past year, highlighting substantial downside risk during market downturns.

Other Risks: A notable mitigating factor is the absence of any reported short interest, which suggests a lack of concentrated negative sentiment from short sellers. However, this does not eliminate other risks, such as industry-specific headwinds or broader market liquidity events that could impact the stock's performance.