Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Ingersoll Rand Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 4.0% to 10.4% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 68, DPO 77, DIO 96). At a 8.6% WACC with mid-year discounting, the terminal value (82% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 17.2x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $89.72 per share, suggesting IR is fairly valued by 9.2% at the current price of $82.13.
Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.
| 2026 | 2027 | 2028 | 2029 | 2030 | Terminal | |
|---|---|---|---|---|---|---|
| Profit Before Tax | 1,824 | 1,913 | 2,002 | 2,150 | 2,374 | 2,433 |
| (−) Net Interest | 191 | 200 | 209 | 225 | 248 | 255 |
| (+) D&A | 110 | 123 | 132 | 139 | 140 | 144 |
| EBITDA | 2,124 | 2,236 | 2,343 | 2,514 | 2,762 | 2,831 |
| (−) Tax | 328 | 344 | 361 | 387 | 427 | — |
| (−) CapEx | 131 | 137 | 143 | 154 | 170 | — |
| (−) ΔWC | 34 | 85 | 85 | 140 | 212 | — |
| Free Cash Flow (FCF) | 1,631 | 1,670 | 1,755 | 1,833 | 1,953 | — |
| Peers' EBITDA Multiple | 17.2x | |||||
| Terminal Value | 48,698 | |||||
| WACC / Discount Rate | 8.55% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 1,566 | 1,477 | 1,429 | 1,375 | 1,350 | 32,316 |
| Enterprise Value | 39,514 | |||||
| Projection Period | 7,197 | 18.2% | ||||
| Terminal Value | 32,316 | 81.8% | ||||
| (−) Current Net Debt | 3,536 | |||||
| Equity Value | 35,978 | |||||
| (÷) Outstanding Shares | 401M | |||||
| Fair Price | $90 | +9.2% | ||||
| WACC \ EV/EBITDA Exit Multiple | 13.2x | 15.2x | 17.2x | 19.2x | 21.2x |
|---|---|---|---|---|---|
| 6.5% | $78 | $88 | $98 | $109 | $119 |
| 7.5% | $74 | $84 | $94 | $104 | $114 |
| 8.5% | $71 | $80 | $90 | $99 | $108 |
| 9.5% | $68 | $77 | $86 | $95 | $104 |
| 10.5% | $65 | $73 | $82 | $90 | $99 |
Current price: $82.13. Green = undervalued, Red = overvalued.
Based on default parameters
This is an unlevered Free Cash Flow to Firm (FCFF) model with a 5-year projection period. Revenue, expenses, D&A, and working capital are projected using the same line-by-line approach as the Growth Exit models. The key difference is the terminal value methodology: instead of assuming perpetual cash flow growth, the terminal value is calculated by applying the industry peer median EV/EBITDA multiple to the projected Year 6 EBITDA.
Using a peer exit multiple anchors the terminal value to how the market currently prices comparable companies, rather than relying on a theoretical perpetual growth assumption. This approach captures relative valuation dynamics and is particularly useful when a company is expected to converge toward industry-average profitability over time. The sensitivity matrix shows how fair value changes across different WACC and EV/EBITDA multiple scenarios.