3 Reasons to Avoid IR and 1 Stock to Buy Instead

Since April 2025, Ingersoll Rand has been in a holding pattern, posting a small return of 2.1% while floating around $74.88. The stock also fell short of the S&P 500’s 21.1% gain during that period.

Is now the time to buy Ingersoll Rand, or should you be careful about including it in your portfolio? Check out our in-depth research report to see what our analysts have to say, it’s free for active Edge members.

Why Is Ingersoll Rand Not Exciting?

We're sitting this one out for now. Here are three reasons you should be careful with IR and a stock we'd rather own.

1. Core Business Falling Behind as Demand Plateaus

We can better understand Gas and Liquid Handling companies by analyzing their organic revenue. This metric gives visibility into Ingersoll Rand’s core business because it excludes one-time events such as mergers, acquisitions, and divestitures along with foreign currency fluctuations - non-fundamental factors that can manipulate the income statement.

Over the last two years, Ingersoll Rand failed to grow its organic revenue. This performance was underwhelming and implies it may need to improve its products, pricing, or go-to-market strategy. It also suggests Ingersoll Rand might have to lean into acquisitions to accelerate growth, which isn’t ideal because M&A can be expensive and risky (integrations often disrupt focus).

2. Projected Revenue Growth Is Slim

Forecasted revenues by Wall Street analysts signal a company’s potential. Predictions may not always be accurate, but accelerating growth typically boosts valuation multiples and stock prices while slowing growth does the opposite.

Over the next 12 months, sell-side analysts expect Ingersoll Rand’s revenue to rise by 6.3%, close to its 5.6% annualized growth for the past five years. This projection doesn't excite us and indicates its newer products and services will not catalyze better top-line performance yet.

3. Previous Growth Initiatives Haven’t Impressed

Growth gives us insight into a company’s long-term potential, but how capital-efficient was that growth? A company’s ROIC explains this by showing how much operating profit it makes compared to the money it has raised (debt and equity).

Ingersoll Rand historically did a mediocre job investing in profitable growth initiatives. Its five-year average ROIC was 5.2%, somewhat low compared to the best industrials companies that consistently pump out 20%+.

Final Judgment

Ingersoll Rand isn’t a terrible business, but it doesn’t pass our bar. With its shares trailing the market in recent months, the stock trades at 21.6× forward P/E (or $74.88 per share). While this valuation is fair, the upside isn’t great compared to the potential downside. We're fairly confident there are better investments elsewhere. We’d recommend looking at a dominant Aerospace business that has perfected its M&A strategy.

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