ITT Inc. (ITT) stock analysis

P/E above its 5-year median

ITT's P/E of 44.2 is above its own 5-year median of 24.8.

P/E above the industry

ITT's P/E of 44.2 is above the General Industrial Machinery and Equipment median of 26.9.

EV/EBITDA above its 5-year median

ITT's EV/EBITDA of 22.1 is above its 5-year median of 15.3.

P/B above the industry

ITT's price-to-book of 4.04 is above the General Industrial Machinery and Equipment median of 2.84.

Trading above fair value

The share price of $215.01 is above our fair value estimate of $144.25.

Margin of safety under 20%

The price is 49.1% above fair value, so there is no margin of safety.

Revenue growing under 10% a year

Revenue grew 9.6% a year over the last three fiscal years, short of the 10% we look for.

EPS growing 10%+ a year

Diluted EPS grew 11.7% a year over the last three fiscal years.

Earnings growth not accelerating

Net income grew -13.5% over the last twelve months, against a 5-year average of 46.4% a year.

Growing faster than the industry

Revenue grew 35.8% over the last twelve months; the General Industrial Machinery and Equipment median is 12.4%.

Guidance raised

ITT raised its 2026 adjusted operating margin outlook on Aug 6, 2026.

Gross margin improving

Gross margin was 35.7% over the last twelve months, against 35.4% a year earlier.

Return on equity under 15%

Return on equity was 11.3% over the last twelve months and averaged 16.4% over five years; we look for 15% on both.

Return on capital under 10%

Return on invested capital was 9.1%, below the 10% that usually covers the cost of capital.

Return on equity above the industry

ITT's return on equity of 11.3% is above the General Industrial Machinery and Equipment median of 9.9%.

Earnings grew over 5 years

Net income grew 46.4% a year on average over the last five fiscal years.

Net margin below its 5-year average

Net margin was 8.1% over the last twelve months, against a 5-year average of 12.6%.

Net margin above the industry

ITT's net margin of 8.1% is above the General Industrial Machinery and Equipment median of 8.0%.

High debt

Debt is 73.8% of shareholders' equity, above the 40% we consider low.

Debt rising against equity

Debt to equity rose from 5.6% five years ago to 73.8%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 22.0% of total debt.

Interest well covered

Operating income covers interest expense 5.4 times.

Short-term assets cover short-term debts

Current assets are 1.29 times current liabilities.

Low bankruptcy risk

The Altman Z-score is 3.07; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

ITT paid dividends worth 0.7% of the share price over the last twelve months.

Yield below Treasuries

The 0.7% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; ITT yields 0.7%.

Dividend not cut

The dividend per share has not fallen by more than 10% in any of the last 10 fiscal years.

Covered by earnings

Dividends take 31.5% of net income.

Covered by free cash flow

Dividends take 20.3% of free cash flow.