Investment Thesis
Ingersoll Rand exhibits solid financial structure and liquidity, but faces severe operational deterioration with net income declining 30.7% YoY despite 5.7% revenue growth, indicating material margin compression and cost control issues. Critically low returns on equity (1.9%) and assets (1.1%) signal poor capital efficiency, while declining profitability trajectory outweighs positive balance sheet metrics.
Strengths
- Strong liquidity position with 2.23x current ratio and 1.59x quick ratio
- Moderate leverage with 0.47x debt-to-equity and 7.9x interest coverage ratio
- Positive free cash flow generation of $163.4M with 8.8% FCF margin
Risks
- Severe profitability decline of 30.7% in net income YoY despite modest revenue growth indicates margin compression and operational stress
- Critically low returns on equity (1.9%) and return on assets (1.1%) suggest fundamental inefficiencies in capital deployment
- Declining earnings per share (-29.6% YoY) with net margin of 10.4% leaves limited cushion for further deterioration
Key Metrics to Watch
- Operating margin trend and gross margin sustainability
- Return on equity recovery and asset utilization efficiency
- Free cash flow consistency relative to declining earnings quality
Financial Metrics
Revenue
1.8B
Net Income
192.1M
EPS (Diluted)
$0.49
Free Cash Flow
163.4M
Total Assets
18.2B
Cash
1.3B
Profitability Ratios
Gross Margin
42.9%
Operating Margin
15.7%
Net Margin
10.4%
ROE
1.9%
ROA
1.1%
FCF Margin
8.8%
Balance Sheet & Liquidity
Current Ratio
2.23x
Quick Ratio
1.59x
Debt/Equity
0.47x
Debt/Assets
43.8%
Interest Coverage
7.87x
Long-term Debt
4.8B
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-05-06T13:14:30.271247 |
Data as of: 2026-03-31 |
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