Is IDEX (IEX) Share Price Misaligned With Recent Returns And Cash Flow Outlook?

• If you are wondering whether IDEX is fairly priced at around US$208.98 per share, you are not alone; many investors are asking if the current tag lines up with the company’s fundamentals.
• The stock has had mixed returns recently, with a 1.2% decline over the past 7 days, a 6.1% gain over the last 30 days, a 16.7% return year to date and a 6.8% return over the past year, while the 3 year return is a 3.2% decline and the 5 year return sits at 12.4%.
• Recent attention on IDEX has been shaped by ongoing coverage around its position in the capital goods space and how investors weigh its quality against peers. This broader conversation helps explain why sentiment can shift even when headlines focus more on long term positioning than short term trading activity.
• Our valuation model currently gives IDEX a score of 1 out of 6. Next we will look at how standard methods like P/E, P/B and cash flow based models line up with that result, and then finish with a more complete way to think about what the stock might be worth over time.

IDEX scores just 1/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: IDEX Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow, or DCF, model estimates what a company might be worth today by projecting its future cash flows and then discounting those back into today’s dollars.

For IDEX, the model uses a 2 Stage Free Cash Flow to Equity approach based on its last twelve month free cash flow of about $604.8 million. Analysts provide explicit free cash flow estimates out to 2029, where projections point to about $936.4 million, and Simply Wall St extends the forecast further using its own assumptions.

After discounting these projected cash flows, the model arrives at an estimated intrinsic value of about $251.38 per share. Compared with a current share price around $208.98, this implies the stock is trading at roughly a 16.9% discount to that estimate, which suggests the DCF view sees some valuation upside at today’s level.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests IDEX is undervalued by 16.9%. Track this in your watchlist or portfolio, or discover 53 more high quality undervalued stocks.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for IDEX.

Approach 2: IDEX Price vs Earnings

For a consistently profitable business, the P/E ratio is a useful way to think about value because it links what you pay directly to the earnings the company is already generating. In general, higher growth expectations and lower perceived risk tend to justify a higher "normal" or "fair" P/E ratio, while slower growth or higher uncertainty usually call for a lower one.

IDEX is currently trading on a P/E of 32.37x. That sits above the Machinery industry average of 29.51x and also above the peer group average of 30.04x, so on simple comparisons the shares are priced at a higher multiple of earnings than many close alternatives.

Simply Wall St’s Fair Ratio for IDEX is 26.62x. This is a proprietary estimate of what its P/E might be based on factors like earnings growth, profit margins, industry, market cap and company specific risks. Because it blends these fundamentals rather than just comparing to a broad industry or a set of peers, it can offer a more tailored view of what a reasonable multiple could look like.

With the current P/E of 32.37x above the Fair Ratio of 26.62x, this approach points to the shares looking expensive on earnings.

Result: OVERVALUED

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Upgrade Your Decision Making: Choose your IDEX Narrative

Earlier we mentioned that there is an even better way to understand valuation. On Simply Wall St’s Community page you can use Narratives to clearly set out your story for IDEX, link that story to your own revenue, earnings and margin forecasts, translate those forecasts into a fair value, then compare that fair value to today’s price to help you decide whether you see IDEX as closer to the more optimistic view with a fair value near US$223.54 or the more cautious view nearer US$170. Each Narrative automatically updates as new news, earnings and company developments come through so your investment thinking can evolve with the facts.

Do you think there's more to the story for IDEX? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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