Ingersoll Rand Inc.

Technical Analysis

IR shows strong recent momentum with impressive short-term gains, significantly outperforming the broader market. However, trading near its 52-week high suggests the stock may be overbought in the near term. While the upward trend is encouraging, investors should be cautious about potential short-term pullbacks given its elevated position.

Fundamentals

IR demonstrates solid revenue growth and a strong financial health profile, with good liquidity and conservative debt management. Despite a recent contraction in gross margins, the company maintains healthy net profitability and robust operating cash flow. Operational efficiency presents some mixed signals, with room for improvement in areas like inventory turnover, though fixed asset utilization appears reasonable.

Valuation & Peer Comparison

The stock appears richly valued with elevated multiples across key metrics like P/E and EV/EBITDA. While the forward P/E suggests anticipated earnings growth, the high PEG ratio indicates this growth may already be priced in. Unfortunately, without peer comparison data, it's difficult to determine whether these valuations represent a sector premium or are company-specific.

Risk Assessment

IR carries above-average volatility risk, with a beta indicating approximately 31% greater movement than the market. The substantial maximum drawdown highlights meaningful downside potential during market corrections. While the absence of significant short interest could imply positive sentiment, other operational and sector risks remain present.

Investment Recommendation

Based on the current analysis, a cautious approach is warranted. While IR demonstrates strong momentum and healthy fundamentals, its rich valuation and overbought technical position near 52-week highs suggest limited near-term upside. Investors might consider waiting for a more attractive entry point or potential market correction before establishing new positions. The stock's high volatility also requires careful risk management for those considering investment.

RockFlow Model Forecast: Three Scenarios for 2026

Based on the comprehensive analysis provided, the 12-month outlook for IR is cautiously optimistic but with significant near-term headwinds. Key catalysts include the company's strong fundamental health, robust operating cash flow, and the momentum from its current uptrend, which could continue if earnings growth meets elevated expectations. The primary risks are its rich valuation and overbought technical position, leaving it vulnerable to a sharp pullback if market sentiment sours or growth disappoints. Given the lack of a specific analyst target price and the stock's high volatility, a reasonable target range could be between $85 and $110, contingent on the company navigating the high expectations priced into its current valuation.

Wall Street Consensus

Most Wall Street analysts are optimistic about Ingersoll Rand Inc.'s 12-month outlook, with consensus target around $96.20, indicating expected upside potential.

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

IR has demonstrated exceptionally strong performance with significant recent momentum and substantial outperformance versus the broader market.

The stock shows impressive short-term gains of 13.1% over one month and 27.71% over three months, significantly outperforming the market by 27.73% during this period. This performance, coupled with a beta of 1.309, indicates both higher volatility and strong upward momentum relative to market benchmarks.

Currently trading at $98.76, IR sits just 2.2% below its 52-week high of $100.96, positioning it near the upper end of its yearly range. Given its proximity to recent highs and substantial recent gains, the stock appears overbought in the near term despite its strong fundamental performance trajectory.

Revenue & Profitability IR's Q4 revenue grew to $2.09 billion from $1.96 billion in Q3, showing positive momentum. However, profitability metrics weakened significantly, with the gross profit margin declining from 43.7% to 24.1% due to a substantial increase in cost of revenue. Despite this, the company maintained a solid net profit margin of 12.7% in Q4, supported by improved operating income efficiency.

Financial Health The company maintains a strong liquidity position with a current ratio of 2.06 and quick ratio of 1.49. IR's conservative debt management is evidenced by a low debt-to-equity ratio of 0.47 and healthy interest coverage of 10.2x. Operating cash flow generation remains robust at 23.9% of revenue, providing ample coverage for debt obligations and capital expenditures.

Operational Efficiency Operational efficiency metrics show mixed results, with ROE at a modest 2.6% and asset turnover of just 0.11, indicating relatively low capital efficiency. The 75-day cash conversion cycle suggests adequate working capital management, though inventory turnover of 1.35 may indicate room for improvement in inventory management. Fixed asset turnover of 2.25 demonstrates reasonable utilization of property and equipment investments.

Valuation Level: With a trailing PE ratio of 76.02 far exceeding typical market levels and a forward PE of 29.25 indicating significant expected earnings growth, the stock appears richly valued on an absolute basis. This is corroborated by an elevated PEG ratio of over 3.0 and a high EV/EBITDA of 64.45, both suggesting the current price may not be fully justified by near-term growth or cash flow generation prospects.

Peer Comparison: A comprehensive peer comparison cannot be performed as the requisite industry average data is unavailable. Therefore, it is not possible to determine whether these valuation metrics represent a premium or discount relative to the company's sector competitors, which is a critical component of a full contextual analysis.

Volatility Risk: IR exhibits above-average market sensitivity with a beta of 1.309, indicating it tends to move about 31% more than the broader market. This elevated beta, combined with a significant one-year maximum drawdown of -23.07%, suggests substantial downside volatility and potential for meaningful capital erosion during market downturns. Investors should consider this stock considerably more volatile than the market average.

Other Risks: The absence of reported short interest could imply minimal speculative bearish sentiment, but this lack of data warrants verification. While potentially positive, investors should still assess liquidity metrics, sector-specific risks, and company fundamentals, as the absence of short interest does not eliminate other operational or market risks inherent to the stock.