Value
5.4/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 2.3 |
| P/S | 7.5 |
| EV/EBITDA | 1.5 |
| Fwd P/E | 6.2 |
| PEG | 8.4 |
| Analyst target | 5.0 |
- ▸Forward P/E: 20.9x
- ▸PEG: 0.77
IR · Why this verdict
Why Ingersoll Rand (IR) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score5.0/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The business achieves a perfect 9-out-of-9 financial health score and converts 176% of net income into free cash flow, both marks that sit well above typical industrial-sector peers and indicate a financially durable franchise. Quality breakdown | The financial health score remains at 8 or above and free cash flow conversion stays above 130% over the next four reported quarters. | →Stable |
| CounterHigh balance-sheet scores can lag fundamental deterioration; the forward multiple of 20x prices in continued execution, and any deceleration in margins or cash generation would be punished at this valuation. | ||
At current prices the stock offers approximately 9.3% upside against 11.3% potential downside, a ratio of roughly 0.8-to-1 that is well short of the minimum 1.5-to-1 needed to justify a new position. Engine gate (failed) | The reward-to-risk ratio rises above 1.5-to-1 through either a price pullback or meaningful upward revision in analyst targets within the next 6 months. | →Stable |
| CounterThe asymmetry can improve quickly if a positive earnings catalyst compresses the downside estimate; the current setup is a timing issue, not a fundamental impairment of the underlying business. | ||
While the 200-day moving average slope is still declining, the MACD is improving and on-balance volume is rising, suggesting early accumulation that may precede a broader technical recovery. Momentum breakdown | The stock crosses back above the 200-day moving average on rising volume and sustains the breakout for at least 3 consecutive weeks. | →Stable |
| CounterThe moving average slope is still declining at -1.6% over 30 days in a confirmed downtrend; an improving MACD alone has not confirmed a trend change and price must follow before the recovery is real. | ||
With 58% of revenues generated outside the United States and single-source dependencies for key iron castings and motors, the business carries meaningful concentration risk that could impair earnings if either exposure is disrupted. Bear case | International revenue share stays below 62% and no single-source supply disruption is disclosed in upcoming 10-K filings. | →Stable |
| CounterGeographic diversification also acts as a growth driver in international markets; long-standing single-source supplier relationships often embed switching costs that reduce — rather than increase — actual procurement risk over time. | ||
The business achieves a perfect 9-out-of-9 financial health score and converts 176% of net income into free cash flow, both marks that sit well above typical industrial-sector peers and indicate a financially durable franchise.
→StableQuality breakdown
- Expectation
- The financial health score remains at 8 or above and free cash flow conversion stays above 130% over the next four reported quarters.
CounterHigh balance-sheet scores can lag fundamental deterioration; the forward multiple of 20x prices in continued execution, and any deceleration in margins or cash generation would be punished at this valuation.
At current prices the stock offers approximately 9.3% upside against 11.3% potential downside, a ratio of roughly 0.8-to-1 that is well short of the minimum 1.5-to-1 needed to justify a new position.
→StableEngine gate (failed)
- Expectation
- The reward-to-risk ratio rises above 1.5-to-1 through either a price pullback or meaningful upward revision in analyst targets within the next 6 months.
CounterThe asymmetry can improve quickly if a positive earnings catalyst compresses the downside estimate; the current setup is a timing issue, not a fundamental impairment of the underlying business.
While the 200-day moving average slope is still declining, the MACD is improving and on-balance volume is rising, suggesting early accumulation that may precede a broader technical recovery.
→StableMomentum breakdown
- Expectation
- The stock crosses back above the 200-day moving average on rising volume and sustains the breakout for at least 3 consecutive weeks.
CounterThe moving average slope is still declining at -1.6% over 30 days in a confirmed downtrend; an improving MACD alone has not confirmed a trend change and price must follow before the recovery is real.
With 58% of revenues generated outside the United States and single-source dependencies for key iron castings and motors, the business carries meaningful concentration risk that could impair earnings if either exposure is disrupted.
→StableBear case
- Expectation
- International revenue share stays below 62% and no single-source supply disruption is disclosed in upcoming 10-K filings.
CounterGeographic diversification also acts as a growth driver in international markets; long-standing single-source supplier relationships often embed switching costs that reduce — rather than increase — actual procurement risk over time.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Ingersoll Rand presents an unusually strong balance sheet — perfect financial health score and free cash flow conversion of 176% — but the current price geometry offers only 9.3% upside against 11.3% potential downside, and the stock remains in a confirmed near-term downtrend, making the setup unfavorable until asymmetry improves.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 1.9 |
| ROA | 3.4 |
| Gross margin | 4.6 |
| Op margin | 6.8 |
| Net margin | 3.8 |
| Current ratio | 7.7 |
| FCF quality | 10.0 |
| Moat | 5.8 |
| Piotroski F | 10.0 |
- ▸Excellent cash conversion: 176% FCF/NI
- ▸Strong Piotroski F-Score: 9/9
Growth
3.9/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 4.4 |
| EPS growth | 3.3 |
Momentum
4.4/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 2.9 |
| MACD | 10.0 |
| OBV | 1.0 |
| MA position | 7.0 |
| Volume | 1.3 |
- ▸Overbought bear rally (RSI 72)
- ▸Volume distribution (falling OBV)
- ▸Below 200-MA (recent, shallow — too early to call)
Sentiment
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 7.2 |
| Price target | 7.2 |
| erm sentiment | 5.0 |
Insider
5.1/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.2 |
- ▸Insider selling (low materiality) — $2,683,296 (0.009% of mkt cap)
Peer rank
2.5/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 2.7 |
| quality rank | 3.3 |
| growth rank | 4.1 |
Technical
3.5/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 2.5 |
| support resistance | 2.0 |
| 52w position | 6.0 |
Risk (lower is worse)
6.9/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.8 |
| days to cover | 6.8 |
| volatility | 4.4 |
| put call | 10.0 |
| implied vol | 4.8 |
| beta | 6.3 |
| debt equity | 8.1 |
- ▸Concentration risks: 2 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 3.8 |
| dividend safety | 6.0 |
- ▸Dividend: 10.0%
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (6)
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:26d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (3)
- MOMENTUM:4.4<4.5
- ASYMMETRY:0.1<1.5@spot
- DEATH_CROSS:HARD_BLOCK
Warning (0)
none
Reward-to-Risk
0.07
Upside
+1.0%
Downside
13.3%
Sizing output
AVOID
SetupRecovery — Death cross but MACD improving, RSI 72
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
The F-path SELL output reflects an overall score of 5.0 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Risk (lower is worse) at 6.9) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( MOMENTUM:4.4<4.5, ASYMMETRY:0.1<1.5@spot, DEATH_CROSS:HARD_BLOCK) reinforce the read. Current asymmetry R:R is 0.07 — supplementary context, not the trigger for this path.
The strongest dimensions are Risk (lower is worse) at 6.9, Sentiment at 6.6, and Quality at 6.0; the weakest are Peer rank at 2.5, Technical at 3.5, and Growth at 3.9. The V9 engine flagged 3 failed gates, producing an asymmetric reward-to-risk of 0.07 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Exceptional Balance Sheet Quality
Trip ifFinancial health score falls below 7 for 2 consecutive reported quarters.
- P2Unfavorable Reward Risk Geometry
Trip ifReward-to-risk ratio rises above 1.5-to-1 following a price decline of more than 8% from current levels.
- P3Early Signs Of Momentum Recovery
Trip ifRSI closes below 40 for 3 or more consecutive weeks, confirming the momentum recovery has stalled.
- P4Geographic And Supplier Concentration
Trip ifInternational revenue falls below 50% of total in an annual filing, materially reducing geographic concentration.