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Ingersoll Rand (IR)
NYSE:IR
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Ingersoll Rand
(NYSE:IR)
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Rating:70Outperform
Price Target:
$90.00
â–²(10.58% Upside)
Action:UpgradedDate:02/14/26
The score is driven mainly by solid fundamentals (healthy operating profitability and strong cash generation) and constructive technical momentum (price above key moving averages with positive MACD). This is tempered by a very high P/E and modest management guidance alongside noted near-term headwinds (tariffs, sub-1 book-to-bill, and slower long-cycle conversions).
Positive Factors
Strong cash generation
Consistent operating cash flow and high free cash flow conversion provide durable internal funding for buybacks, M&A, and capex. Strong cash conversion lowers reliance on external financing and supports strategic investments and shareholder returns across business cycles.
High operating margins
Sustained mid-to-high teens EBIT and mid-20s EBITDA margins reflect efficient engineered-product manufacturing and attractive aftermarket/service economics. These margins underpin resilience to demand swings and create structural room to invest in growth or absorb input cost pressure.
Growing recurring revenue & M&A
Acceleration of recurring revenue and a growing backlog increases revenue predictability and expands high-margin aftermarket streams. Coupled with disciplined M&A that adds installed base, this supports long-term cross-sell, customer retention, and revenue visibility.
Negative Factors
Rising leverage and lower ROE
A meaningful uptick in leverage reduces financial flexibility and increases interest exposure during downturns. Combined with declining ROE, it signals lower capital efficiency and makes future payout or acquisitive strategies more dependent on steady cash generation.
Tariff-driven working capital drag
Tariff-induced inventory accumulation strains working capital and can depress FCF conversion until normalized. Persistent inventory risk raises carrying costs and margin dilution, limiting cash available for strategic uses and making profitability more sensitive to trade policy.
Long-cycle conversion delays
Elongated customer decision timelines and book-to-bill below one impede conversion of backlog into revenue, lengthening cash cycles and increasing revenue volatility for long-cycle projects. This structural sales cadence risks slower growth despite a healthy funnel.
Ingersoll Rand (IR) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$31.87B
Dividend Yield0.1%
Average Volume (3M)3.30M
Price to Earnings (P/E)54.2
Beta (1Y)1.29
Revenue Growth4.20%
EPS Growth-34.47%
CountryUS
Employees21,000
SectorIndustrials
Sector Strength72
IndustryIndustrial - Machinery
Share Statistics
EPS (TTM)0.96
Shares Outstanding391,617,980
10 Day Avg. Volume3,043,255
30 Day Avg. Volume3,295,057
Financial Highlights & Ratios
PEG Ratio-1.82
Price to Book (P/B)3.13
Price to Sales (P/S)4.12
P/FCF Ratio25.85
Enterprise Value/Market Cap1.12
Enterprise Value/Revenue4.67
Enterprise Value/Gross Profit12.10
Enterprise Value/Ebitda21.09
Forecast
1Y Price Target
$107.67Price Target Upside32.29% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
EPS Forecast (FY)3.53
Revenue Forecast (FY)$7.95B
Ingersoll Rand Business Overview & Revenue Model
Company DescriptionIngersoll Rand Inc. provides various mission-critical air, fluid, energy, specialty vehicle and medical technologies in the United States, Europe, the Middle East, Africa, and the Asia Pacific. It operates through two segments, Industrial Technologies and Services, and Precision and Science Technologies. The Industrial Technologies and Services segment designs, manufactures, markets, and services various air and gas compression, vacuum, and blower products; fluid transfer equipment and loading systems; and power tools and lifting equipment, including associated aftermarket parts, consumables, air treatment equipment, controls, other accessories, and services. The Precision and Science Technologies segment designs, manufactures, and markets a range of specialized positive displacement pumps, fluid management systems, accessories and aftermarket parts for liquid and gas dosing, transfer, dispensing, compression, sampling, pressure management and flow control in specialized or critical applications. The company's products are used in medical, laboratory, industrial manufacturing, water and wastewater, chemical processing, precision irrigation, energy, food and beverage, agriculture, and vacuum and automated liquid handling end-markets, as well as various manufacturing and industrial facilities applications. It sells through an integrated network of direct sales representatives and independent distributors under the Ingersoll Rand, Gardner Denver, Club Car, CompAir, Nash, Elmo Rietschle, Robuschi, Thomas, Milton Roy, Seepex, ARO, Emco Wheaton, Runtech Systems, Air Dimensions, Albin, Dosatron, Haskel, LMI, Maximus, MP, Oberdorfer, Welch, Williams, Zinnser Analytic, and YZ brands. The company was formerly known as Gardner Denver Holdings, Inc. and changed its name to Ingersoll Rand Inc. in March 2020. Ingersoll Rand Inc. was founded in 1859 and is headquartered in Davidson, North Carolina.
How the Company Makes MoneyIngersoll Rand primarily makes money by selling engineered industrial equipment and related aftermarket parts and services. (1) Equipment and system sales: Revenue is generated from the sale of compressors, vacuum systems, pumps, and other flow-related equipment, including more engineered-to-order systems and packaged solutions for specific industrial processes. These sales are typically project- or order-driven and flow through direct sales channels as well as distributors and original equipment manufacturer (OEM) relationships where IR’s products are integrated into customers’ systems. (2) Aftermarket parts, consumables, and service: A significant portion of earnings is supported by recurring and higher-margin aftermarket activity, including replacement parts, maintenance kits, consumables, repairs, rentals (if offered in specific markets), and service labor. The installed base of equipment creates ongoing demand for maintenance to preserve uptime and efficiency, and the company monetizes this through field service, service centers, and authorized partners. (3) Service agreements and lifecycle support: IR also earns revenue from long-term service contracts, planned maintenance programs, and uptime/coverage agreements that bundle periodic service, inspections, and parts over multi-year periods, creating more predictable revenue streams. (4) Pricing, mix, and channel leverage: Earnings are influenced by product and aftermarket mix (aftermarket typically carrying higher margins), pricing actions, and the scale advantages of a global manufacturing and distribution footprint. (5) Acquisitions: IR has historically used acquisitions to add brands, expand into adjacent flow technologies, and increase aftermarket opportunity by growing the installed base; the contribution of acquired businesses supports revenue growth and cross-selling across the portfolio.
Ingersoll Rand Key Performance Indicators (KPIs)
Any
Revenue by Segment
Shows how much each business unit contributes to total sales, indicating which segments are growing and which may need strategic adjustments.
Shows how much each business unit contributes to total sales, indicating which segments are growing and which may need strategic adjustments.
Data provided by:
The Fly
The FlyIngersoll Rand Earnings Call Summary
Earnings Call Date:Feb 12, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 06, 2026
Earnings Call Sentiment Positive
The call reflected solid financial and operational performance: strong adjusted EBITDA, EPS growth, robust M&A execution, accelerating recurring revenue, and healthy liquidity and capital returns. Management acknowledged margin headwinds from tariffs and strategic reinvestments, a modest full-year organic revenue contraction in 2025, Q4 seasonality with book-to-bill below one, and cautious 2026 guidance that does not assume a market recovery. The balance of positive execution, cash generation, and a deep and disciplined M&A pipeline outweighs the near-term headwinds and conservative assumptions.Q4-2025 Updates
Positive Updates
Quarterly Orders and Revenue Growth
Q4 orders increased 8% year-over-year (organic +1%); Q4 revenue rose 10% year-over-year (organic revenue +3%), signaling positive momentum into 2026.
Strong Adjusted EBITDA and Margins
Q4 adjusted EBITDA was $580 million with a margin of 27.7%; full-year adjusted EBITDA approximately $2.1 billion with a 27.4% margin, exceeding the upper end of prior guidance.
Earnings Per Share Improvements
Q4 adjusted EPS was $0.96 (up 14% year-over-year); full-year adjusted EPS $3.34, up 2% year-over-year; 2026 guidance of $3.45–$3.57 implies ~5% growth at the midpoint.
Recurring Revenue Acceleration
Recurring revenue exceeded $450 million in 2025 with a backlog of approximately $1.1 billion of future contracted revenue, up materially from roughly $200 million a few years prior.
Robust M&A Execution and Pipeline
Invested $525 million across 16 transactions in 2025 generating ~ $275 million in annualized inorganic revenue (average ~9x presynergy multiple); nine additional transactions currently under LOI and Synomics closed in January 2026.
Strong Capital Deployment and Balance Sheet
Deployed $1.0 billion in share repurchases and $32 million in dividends in 2025; $3.8 billion in liquidity, leverage well under 2x, Q4 cash flow $462 million.
Segment-Level Strength — PST Life Sciences
PST Q4 orders up 6% YoY (organic +1%), life sciences organic orders up mid-teens; Q4 PST revenue +8% YoY (organic +4%); PST adjusted EBITDA $127 million, up 19% YoY with a 30.4% margin (+280 bps YoY).
Regional and Product Wins, Including China
ITS Q4 orders up 9% (organic low single digits); Asia Pacific showed strong growth (APAC up low double digits, China up low single digits, rest of Asia mid-twenties); three consecutive quarters of organic growth in China attributed to localized product launches and technology integrations.
Negative Updates
Full-Year Organic Revenue Slight Decline
Full-year total revenue was up 6% YoY but organic revenue finished down 1% year-over-year, driven by tough first-half comps.
Margin Pressure from Tariffs and Reinvestment
Year-over-year margin headwinds were primarily driven by tariff impacts and intentional commercial reinvestments; ITS Q4 adjusted EBITDA margin declined to 28.9% due in part to tariff dilution and growth investments.
Quarterly Book-to-Bill Below One
Q4 book-to-bill finished below 1 for both segments (company Q4 book-to-bill 0.93 overall; PST 0.96), indicating seasonality and some shipment timing pressure in the quarter.
Conservative 2026 Organic Assumptions
2026 guidance embeds modest organic order growth (1% at midpoint) and explicitly does not assume a market inflection — guidance assumes essentially current trajectory without recovery baked in.
Elongated Decision-Making in Long-Cycle Projects
Management noted continued elongation in customer decision timelines for long-cycle projects (delays rather than cancellations), which can slow conversion even with a healthy funnel.
Regional Variability — EMEA Softness in Q4
ITS Q4 organic orders in EMEA were down mid single digits (attributed to project timing) despite positive full-year results, highlighting regional unevenness.
Working Capital/Inventory Impact from Tariffs
Tariff-related dynamics led to inventory build that continues to pressure working capital; management identified inventory and working capital efficiency as a key area to improve FCF conversion.
Company Guidance
Ingersoll Rand guided full‑year 2026 revenue growth of 2.5%–4.5%, driven at the midpoint by ~1% organic growth, ~1.5% from M&A (including 2025 carryover and the Synomics deal) and a ~1% FX tailwind, with total adjusted EBITDA of $2.13–$2.19 billion and corporate costs planned at $170 million (evenly incurred). Adjusted EPS is expected to be $3.45–$3.57 (about 5% growth at the midpoint) with an adjusted tax rate of ~23%, net interest of ~ $230 million, share count of ~394 million, and free cash‑flow to adjusted‑net‑income conversion of ~95%; management said the guide assumes no market recovery (phasing consistent with historical seasonality: Q1 organic flat to slightly down, Q2–Q4 low single‑digit organic growth) and expects roughly mid‑single‑digit EPS growth in both the first and second halves.Ingersoll Rand Financial Statement Overview
Summary
Steady revenue growth and strong operating margins (2025 EBIT ~18.5%, EBITDA ~25.1%) with durable cash generation (2025 OCF ~$1.36B; FCF ~$1.22B). Offsetting this, 2025 net margin and net income fell versus 2024, ROE declined (~5.8%), and leverage has increased versus 2022–2023, indicating some deterioration in earnings efficiency and balance-sheet conservatism.Income Statement
Revenue has grown steadily from 2021–2025 (2025 revenue up ~2.6% YoY), and operating profitability has improved meaningfully versus 2020, with 2025 EBIT margin around 18.5% and EBITDA margin ~25.1%. However, profitability softened in 2025 versus 2024: net margin fell to ~7.6% from ~11.6%, and net income declined despite higher revenue, pointing to weaker below-the-line performance. Overall: solid operating engine with a recent step-down in net earnings quality.74
Positive
Balance Sheet
Leverage is moderate with 2025 debt-to-equity at ~0.47, but it has risen versus 2022–2023 (low ~0.28 in 2023) as total debt increased sharply into 2024–2025. Equity remains sizable (~$10.1B in 2025) supporting the capital structure, yet returns on equity have drifted down to ~5.8% in 2025 from ~8.2% in 2024, consistent with the earnings decline. Overall: generally sound balance sheet with a noticeable recent uptick in leverage and lower shareholder returns.71
Positive
Cash Flow
Cash generation is strong and consistent: 2025 operating cash flow (~$1.36B) and free cash flow (~$1.22B) remain healthy, and free cash flow has closely tracked reported earnings (around ~0.90x net income in 2024–2025). The main weakness is momentum—free cash flow growth turned slightly negative in 2024 and declined further in 2025—suggesting a plateau after earlier expansion. Overall: solid cash conversion with slowing growth.73
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 7.65B | 7.24B | 6.88B | 5.92B | 5.15B |
| Gross Profit | 2.95B | 3.17B | 2.88B | 2.33B | 1.99B |
| EBITDA | 1.92B | 1.83B | 1.65B | 1.28B | 1.02B |
| Net Income | 581.40M | 838.60M | 778.70M | 604.70M | 562.50M |
Balance Sheet | |||||
| Total Assets | 18.30B | 18.01B | 15.56B | 14.77B | 15.15B |
| Cash, Cash Equivalents and Short-Term Investments | 1.25B | 1.54B | 1.60B | 1.61B | 2.11B |
| Total Debt | 4.78B | 4.98B | 2.77B | 2.79B | 3.48B |
| Total Liabilities | 8.14B | 7.76B | 5.72B | 5.51B | 6.08B |
| Stockholders Equity | 10.09B | 10.18B | 9.78B | 9.20B | 9.00B |
Cash Flow | |||||
| Free Cash Flow | 1.22B | 1.25B | 1.27B | 765.70M | 551.40M |
| Operating Cash Flow | 1.36B | 1.40B | 1.38B | 860.30M | 615.50M |
| Investing Cash Flow | -660.60M | -3.11B | -1.06B | -332.90M | 914.30M |
| Financing Cash Flow | -1.05B | 1.71B | -337.50M | -954.00M | -1.16B |
Ingersoll Rand Technical Analysis
Negative
81.39
Price Trends
89.86
Negative
84.40
Negative
82.99
Negative
Market Momentum
-2.75
Positive
32.64
Neutral
23.93
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IR, the sentiment is Negative. The current price of 81.39 is below the 20-day moving average (MA) of 87.97, below the 50-day MA of 89.86, and below the 200-day MA of 82.99, indicating a bearish trend. The MACD of -2.75 indicates Positive momentum. The RSI at 32.64 is Neutral, neither overbought nor oversold. The STOCH value of 23.93 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for IR.
Ingersoll Rand Risk Analysis
Ingersoll Rand disclosed 31 risk factors in its most recent earnings report. Ingersoll Rand reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Ingersoll Rand Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $47.94B | 31.97 | 14.26% | 0.59% | 3.67% | 10.44% | |
75 Outperform | $28.24B | 24.49 | 14.76% | 1.04% | -5.24% | 45.69% | |
70 Outperform | $31.87B | 54.24 | 5.70% | 0.10% | 4.20% | -34.47% | |
68 Neutral | $14.12B | 26.14 | 17.48% | 0.96% | 0.83% | -1.32% | |
68 Neutral | $39.90B | 35.94 | 27.69% | 1.33% | 0.98% | -7.51% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
61 Neutral | $11.66B | 33.29 | 4.18% | 0.97% | -4.99% | 22.16% |
* Industrials Sector Average
IR
Ingersoll Rand
81.39
-0.76
-0.93%
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DOV
Dover
209.37
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PNR
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86.49
-2.45
-2.75%
RRX
Regal Rexnord
175.40
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ROK
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355.11
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.