IDEX Corporation (IEX)

Conclusion

IDEX Corporation is a United States specialty industrial machinery maker. Its three segments, Health & Science Technologies, Fluid & Metering Technologies, and Fire & Safety/Diversified Products, make pumps, valves, flow meters, precision fluidics and firefighting equipment. On 9 November 2026 the shares closed at 235.93 USD, giving a market capitalisation of 17.3 billion USD.

The verdict is fair. The P/E of 32.3x is 6.7% above its ten-year median of 30.3x, while EV/EBITDA of 18.9x is 3.4% below its median of 19.5x. The DCF gives 168.90 USD per share at a discount rate of 9.63%. The fair value band runs from 165.47 to 248.20 USD with a midpoint of 206.83 USD, and the margin of safety is -12.3% at the current price. The reverse DCF implies growth of 11.1% a year, against revenue growth of 8.0% over five years.

What holds the case up is earnings quality: free cash flow conversion of 124.5% over the last twelve months, eight earnings beats out of eight quarters, and an ROIC of 11.3% against a WACC of 9.1%. What could break it is the price itself: the margin of safety is -12.3%, and the DCF rests on a terminal value share of 54.3%. The operating margin of 20.9% also sits below its ten-year median of 22.6%, and the implied growth of 11.1% is above the revenue growth delivered.

Financial health

The financial strength is green, held up by a current ratio of 2.78, net debt to EBITDA of 1.17 and interest coverage of 12.2, all assessed good. Debt to equity of 0.44 and a quick ratio of 1.81 support the picture. The Altman Z-score is 5.69, in the safe zone. Insolvency risk is low, about 0.24% by the estimate of the Ohlson model over one to two years, based on figures as at 31 December 2025. The company's balance sheet therefore shows little near-term stress on these measures. The analysis does not include a debt maturity schedule, so refinancing timing cannot be assessed.

Earnings quality

The earnings quality is green: free cash flow conversion is 124.5% on a trailing basis and 107.9% over five years, and the accrual ratio is -2.9%, which points to cash earnings exceeding reported profit. Stock-based compensation is 0.85% of revenue, and free cash flow after it is 635.9 million USD. The share count fell at a five-year compound rate of 0.3%, indicating net buybacks. The Piotroski score is 7 out of 9. The Beneish M-score is not available. The company has beaten earnings estimates in all eight of the last quarters, with an average surprise of 5.9%. Analysts raised current-year estimates by 1.4% over 90 days and next-year estimates by 3.9%, with no downward revisions in the last 30 days.

Profitability

The profitability is green. The gross margin is 44.9% against a ten-year median of 46.8%, and the operating margin is 20.9% against a median of 22.6%. The net margin is 14.7% against a median of 16.2%. The operating margin has been stable, with a stability measure of 5.6%. ROIC is 11.3% against a WACC of 9.1%, and the given ROIC minus WACC value is 2.2%, labelled as creating value. The five-year median ROIC is 12.6%. Return on equity is 13.3%. The DuPont split shows a net margin of 14.0%, an asset turnover of 0.50 and an equity multiplier of 1.72, so returns come mainly from margins and not from leverage.

Growth

The growth is green. Revenue compounded at 2.8% over three years, 8.0% over five years and 5.5% over ten years. Revenue grew in 8 of the 10 comparable years. Earnings per share compounded at -6.0% over three years, 5.4% over five and 5.9% over ten. Free cash flow per share compounded at 8.4% over three years, 3.9% over five and 7.3% over ten. Analysts expect next-year earnings per share growth of 9.9%. The recent three-year earnings decline is the main weak point, while the longer record is steady.

Valuation

The valuation is yellow, because the verdict is fair and the margin of safety is -12.3%. The P/E of 32.3x is 6.7% above its ten-year median of 30.3x. EV/EBITDA of 18.9x is 3.4% below its median of 19.5x, price to free cash flow of 26.0x is 4.5% below its median of 27.2x, and price to book of 4.3x is 19.8% below its median of 5.4x. The DCF gives 168.90 USD per share at a discount rate of 9.63%, with a terminal value share of 54.3%. The fair value from historical multiples is 244.77 USD. The fair value band is an order of magnitude built on fixed assumptions, including a 5% equity risk premium and capped growth, and is not a price target. The reverse DCF implies 11.1% growth, and the given gap to five-year revenue growth is 3.1%. The dividend yield is 1.2%, with a payout of 32.1% of free cash flow.

Risks

The main risk is valuation. The price of 235.93 USD is above the fair value midpoint of 206.83 USD, and the DCF of 168.90 USD sits well below the current price. If growth stays near the 8.0% five-year revenue rate, the implied 11.1% will not be met. The thin ROIC minus WACC value of 2.2% leaves little room if returns fall. A fall in the operating margin from 20.9% toward its median would reduce the cash generation behind the DCF. The three-year EPS decline of -6.0% is a further warning. The Beneish M-score is not available. This analysis lacks a debt maturity schedule and revenue by segment, so it cannot judge segment-level risk or refinancing exposure.