Should You Think About Buying Ingersoll Rand Inc. (NYSE:IR) Now?

Simply Wall St ·  Apr 16 03:16

Ingersoll Rand Inc. (NYSE:IR) received a lot of attention from a substantial price increase on the NYSE over the last few months. The company's trading levels have reached its high for the past year, following the recent bounce in the share price. With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock's share price. But what if there is still an opportunity to buy? Let's take a look at Ingersoll Rand's outlook and value based on the most recent financial data to see if the opportunity still exists.

What's The Opportunity In Ingersoll Rand?

According to our valuation model, Ingersoll Rand seems to be fairly priced at around 5.44% above our intrinsic value, which means if you buy Ingersoll Rand today, you'd be paying a relatively fair price for it. And if you believe the company's true value is $87.18, there's only an insignificant downside when the price falls to its real value. So, is there another chance to buy low in the future? Given that Ingersoll Rand's share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.

What kind of growth will Ingersoll Rand generate?

NYSE:IR Earnings and Revenue Growth April 15th 2024

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let's also take a look at the company's future expectations. Ingersoll Rand's earnings over the next few years are expected to increase by 72%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? IR's optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven't considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you've been keeping tabs on IR, now may not be the most optimal time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it's worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

So while earnings quality is important, it's equally important to consider the risks facing Ingersoll Rand at this point in time. In terms of investment risks, we've identified 1 warning sign with Ingersoll Rand, and understanding this should be part of your investment process.

If you are no longer interested in Ingersoll Rand, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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