Ingersoll Rand (IR) — FAQ

Question 1

What is a reverse DCF analysis?

Accepted Answer

Reverse DCF solves for the annual growth rate implied by the current price, instead of assuming a growth rate to compute fair value. This page runs the model on trailing EPS and on free cash flow per share — both views appear below so you can compare what the market implies under each.

Question 2

What EPS growth is priced into IR?

Accepted Answer

On the EPS basis, the model implies about 23.1% annual EPS growth for Ingersoll Rand (IR) at the current price. Compare to the 5-year historical EPS CAGR of 11.4%.

Question 3

What FCF / share growth is priced into IR?

Accepted Answer

On the FCF / share basis, the model implies about 41.4% annual free-cash-flow-per-share growth for Ingersoll Rand (IR) at the current price. Compare to the 3-year historical FCF-per-share CAGR of 23.5%.

Question 4

Should I use EPS basis or FCF / share basis?

Accepted Answer

EPS basis is the textbook reverse-DCF input — broadly comparable across companies and easy to relate to next-year analyst consensus — but it is distorted by non-cash items like stock-based compensation and large depreciation. FCF / share is closer to the cash actually available to shareholders after capex; it tends to give a cleaner picture for mature cash-generative businesses, but it is more volatile during heavy-capex years and analyst consensus is not available for it. Most premium DCF tools recommend cross-checking both.

Question 5

What is IR's fair value based on historical growth?

Accepted Answer

If Ingersoll Rand (IR) grew at its historical per-share CAGR in the DCF setup, the model produces the following fair values. Using the historical EPS CAGR, fair value lands at about $35.91 — 57.0% below the current price. Using the historical FCF-per-share CAGR, fair value lands at about $24.23 — 71.0% below the current price.

Question 6

Is IR overvalued or undervalued?

Accepted Answer

Compare the implied per-share growth on each basis to the corresponding historical CAGR and, for EPS, to analyst consensus. A reverse DCF is one educational lens — it does not account for changes in capital structure, sector cycles, or business-model transitions, and it is not investment advice.

Method	Fair value	Upside vs price
Forward DCF	$35.91	-57.02%
Exit multiple	$138.02	+65.22%
Analyst target	$92.67	+10.93%
Graham number	$16.92	-79.75%

Row axis: discount rate. Column axis: terminal growth.Terminal g →↓ Discount	1.5%	2.0%	2.5%	3.0%	3.5%
8.5%	37.5%	36.6%	35.6%	34.6%	33.4%
9.5%	40.3%	39.5%	38.7%	37.8%	36.8%
10.5%	42.9%	42.2%	41.4%	40.7%	39.8%
11.5%	45.4%	44.7%	44.1%	43.4%	42.6%
12.5%	47.8%	47.2%	46.6%	45.9%	45.3%

Fair Value for Ingersoll Rand (IR)

Fair value (multi-method)

Valuation methods

Model inputs

Sensitivity — implied growth vs your assumptions

Historical multiples

Frequently asked questions

Ingersoll Rand (IR) Key Financials

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