IR

Analyst Note: Ingersoll Rand Inc. (IR)

Date: 2026-06-13 Current Price: $77.91

1. Structural Readiness

State: Context-Only Conservative Entry: — (Pending breakout confirmation) Current Price: $77.91 Extension: — Breakout Level: — (Pending) ATR Current: 3.3% (Productive)

Setup Analysis:

2. Thesis Layer

Thesis Classification: Tactical / Setup-Led Secular Exposure: None Named

At this date, there is no named macro or secular thesis driving this specific trade. This is a TACTICAL setup-led name. The conviction must be derived entirely from the quality of the technical structure (once the breakout fires) and the underlying business fundamentals. We do not invent a thesis; we judge the name on its setup quality and the strength of its operational data. The absence of a named secular theme means the trade relies on the company's ability to execute its stated guidance and the market's recognition of that execution, rather than a broad thematic tailwind.

3. The Business

Ingersoll Rand Inc. is a diversified, global provider of mission-critical flow creation products and industrial and life science solutions. The company operates through two primary divisions: Industrial Technologies and Services and Precision and Science Technologies.

• Operations & Portfolio: The company designs, produces, and maintains air and gas compression, vacuum, and blower solutions, alongside fluid handling systems, power tools, and lifting apparatus. The Precision and Science Technologies segment focuses on specialized positive displacement pumps and advanced fluid management systems for demanding environments like healthcare and scientific research. The company leverages a portfolio of over 90 market-leading brands, including Ingersoll Rand, Gardner Denver, Nash, CompAir, ILC Dover, and Thomas.
• Revenue Model: The business model is supported by a large installed base that generates a significant recurring revenue stream. As of the 2025 fiscal year, aftermarket revenue (parts, consumables, and services) represented 36.5% of total company revenue.
• Recent Performance (Q1 2026):
• Orders: Segment orders for the three months ended March 31, 2026, were $1,557.9 million, an increase of 4.8% year-over-year. The book-to-bill ratio was 1.07x, consistent with normal seasonality.
• Revenue: Segment revenues were $1,444.5 million, up 6.8% year-over-year.
• Margins: Gross profit was $792.4 million (42.9% of revenue), down slightly from 44.6% in the prior year period.
• Backlog: As of March 31, 2026, the company expects to recognize $832.3 million in revenue from unsatisfied performance obligations in the next twelve months.
• Strategic Moves: The company has been active in inorganic growth, completing the acquisition of SSI Aeration, Inc. in February 2025 ($97.8 million) and Termomeccanica Industrial Compressors S.p.A. in July 2025 ($193.2 million).
• Management Expectations (Recorded 2026-04-29):
• Growth: Management expects total company revenue to grow between 2.5% and 4.5%, driven by organic growth of 1% at the midpoint.
• Inorganic: They continue to expect 400 to 500 basis points of annualized inorganic revenue from acquisitions in 2026.
• Profitability: Total adjusted EBITDA is expected to be in the range of $2.13 billion to $2.19 billion.
• Headwinds: Management noted a delay in orders of approximately $40 million driven by long-cycle projects impacted by the conflict in the Middle East.

4. Archetype and Conviction

Archetype: Quality Compounder Fit Rationale: The name fits the Quality Compounder archetype due to its consistent execution of inorganic growth, a high-margin aftermarket business (36.5% of revenue), and a broad, diversified portfolio of market-leading brands. The company demonstrates the ability to generate organic growth (1% midpoint expectation) while successfully integrating acquisitions (SSI, TMIC/Adicomp). The backlog of $832.3 million for the next 12 months provides visibility into near-term revenue stability.

Conviction Stack:

• Thesis Strength: Low (Tactical/Setup-led only; no macro thesis).
• Evidence Quality: High. The evidence base is robust, with specific guidance on revenue, EBITDA, and order book metrics from Q1 2026 earnings and filings.
• Structural Quality: Moderate. The setup is "Forming," meaning the structural quality is present but unconfirmed. The ATR of 3.3% is productive but not in the highest historical volatility bucket.
• Setup Readiness: Partial. The coil is forming, not confirmed.
• Rerating Potential: Dependent on the successful execution of the 2026 guidance and the resolution of the Middle East-related order delays.

Valuation Context: The financial spine indicates a forward consensus EPS of $3.51 for FY1 and $3.84 for FY2. At a current price of $77.91, the stock trades at approximately 22.2x FY1 consensus. This valuation assumes the successful delivery of the 2.5–4.5% revenue growth and the EBITDA margin targets.

5. Invalidations, Strengths, and Gaps

What Would Strengthen the Case:

• Fundamental: Orders remaining above the 1.07x book-to-bill ratio in subsequent quarters, or the resolution of the $40 million order delay.
• Strategic: Successful integration of the 2026 acquisitions contributing to the 400-500 bps inorganic growth target.

What Would Invalidate the Case:

• Fundamental: A significant miss on the $2.13–$2.19 billion EBITDA guidance or a deterioration in the book-to-bill ratio below 1.0x.
• Macro: Escalation of the Middle East conflict causing further delays beyond the $40 million already noted.

Gaps in Evidence:

• Fundamental: No specific data on the margin impact of the recent acquisitions (SSI and TMIC) in the 2026 guidance, only the top-line revenue contribution.
• Macro: No specific data on the duration of the Middle East conflict's impact on order timing.

PRIVATE ANALYST CALL

Judgment: Hold Confidence: medium Key evidence: Q1 2026 orders up 4.8% with 1.07x book-to-bill; Management guidance for 2.5-4.5% revenue growth and $2.13-2.19B EBITDA; 36.5% of revenue from high-margin aftermarket services. Key risks: Technical setup is forming, not confirmed; $40M order delay due to Middle East conflict; Gross margin compression from 44.6% to 42.9%; ATR of 3.3% is below the 4-6% historical sweet spot for high-conviction breakouts. Expected path: Management expects to recognize $832.3M in backlog revenue over the next 12 months; if the technical breakout occurs, the stock may re-rate based on the delivery of the 2026 EBITDA guidance. Expected horizon: 3 to 6 months for the technical setup to resolve (breakout or invalidation).