Ingersoll Rand(IR) ZACKS·2025-01-03 17:26Forex Exposure and International Presence - Ingersoll Rand has significant exposure to regions outside the United States, making it vulnerable to political and economic disruptions that can directly affect profits [1] - The company faces headwinds from unfavorable foreign currency movements due to its extensive international presence [1][2] Operational Performance and Stock Performance - Ingersoll Rand's recent operational performance has failed to impress investors due to rising costs and high debt levels [2] - The company's stock has declined 0.6% in the past six months, underperforming the industry's 7.4% growth [3] Rising Costs and Financial Impact - Cost inflation has significantly impacted Ingersoll Rand's operations, with the cost of sales increasing 11.2% year over year in 2023 [5] - Selling and administrative expenses surged 16.1% in 2023 and increased 7.5% in the first nine months of 2024 [5] - Selling and administrative expenses as a percentage of revenues rose by 40 basis points to 19% [6] - The company expects to incur corporate costs of $170 million in 2024, driven by investments in demand generation, digital, and IT-related areas [6] High Debt Levels and Financial Obligations - Ingersoll Rand's long-term debt increased to $4.8 billion at the end of Q3 2024, up from $2.7 billion at the end of 2023 [8] - Interest expenses in the first nine months of 2024 were $151.4 million, up 27% year over year [8] Industry Comparison and Alternative Stocks - Graham Corporation (GHM) is a better-ranked company in the same industry, with a Zacks Rank 1 (Strong Buy) and a trailing four-quarter average earnings surprise of 101.9% [7] - Gates Industrial Corporation plc (GTES) carries a Zacks Rank 2 (Buy) and has a trailing four-quarter average earnings surprise of 11.8% [9] - Generac Holdings Inc. (GNRC) also carries a Zacks Rank of 2, with a trailing four-quarter average earnings surprise of 10.8% [9]