Trane Technologies plc Fundamental Analysis
Trane Technologies plc (TT) shows moderate financial fundamentals with a PE ratio of 35.28, profit margin of 13.42%, and ROE of 34.71%. The company generates $21.4B in annual revenue with N/A year-over-year growth of N/A.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 81.5/100 based on profitability, valuation, growth, and balance sheet metrics. The B+ grade reflects solid fundamentals with room for improvement in valuation or growth.
Fundamental Health Score
We analyze TT's fundamental strength across five key dimensions:
Efficiency Score
ExcellentTT demonstrates superior asset utilization.
Valuation Score
WeakTT trades at a premium to fair value.
Growth Score
ModerateTT shows steady but slowing expansion.
Financial Health Score
ExcellentTT maintains a strong and stable balance sheet.
Profitability Score
ModerateTT maintains healthy but balanced margins.
Key Financial Metrics
Is TT Expensive or Cheap?
P/E Ratio
TT trades at 35.28 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, TT's PEG of 4.87 indicates potential overvaluation.
Price to Book
The market values Trane Technologies plc at 11.87 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 22.92 times EBITDA. This signals the market has high growth expectations.
How Well Does TT Make Money?
Net Profit Margin
For every $100 in sales, Trane Technologies plc keeps $13.42 as profit after all expenses.
Operating Margin
Core operations generate 18.17 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $34.71 in profit for every $100 of shareholder equity.
ROA
Trane Technologies plc generates $12.74 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Trane Technologies plc produces operating cash flow of $3.47B, showing steady but balanced cash generation.
Free Cash Flow
Trane Technologies plc generates strong free cash flow of $3.13B, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $14.17 in free cash annually.
FCF Yield
TT converts 3.13% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
35.28
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
4.87
vs 25 benchmark
P/B Ratio
Price to book value ratio
11.87
vs 25 benchmark
P/S Ratio
Price to sales ratio
4.69
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.54
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.10
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.35
vs 25 benchmark
ROA
Return on assets percentage
0.13
vs 25 benchmark
ROCE
Return on capital employed
0.25
vs 25 benchmark
How TT Stacks Against Its Sector Peers
| Metric | TT Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 35.28 | 26.21 | Worse (Expensive) |
| ROE | 34.71% | 1254.00% | Weak |
| Net Margin | 13.42% | -35118.00% (disorted) | Strong |
| Debt/Equity | 0.54 | 0.74 | Strong (Low Leverage) |
| Current Ratio | 1.10 | 9.96 | Neutral |
| ROA | 12.74% | -1487045.00% (disorted) | Strong |
TT outperforms its industry in 3 out of 6 key metrics, particularly excelling in Net Margin, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Trane Technologies plc's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
N/A
Industry Style: Cyclical, Value, Infrastructure
EPS CAGR
N/A
Industry Style: Cyclical, Value, Infrastructure
FCF CAGR
N/A
Industry Style: Cyclical, Value, Infrastructure