Nordson (NasdaqGS:NDSN) - Share price, News & Analysis

Q: What is the Fair Price of NDSN when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

NDSN ($230.23) is trading below our estimate of [[fair value]] ($366.14)

NDSN fundamental analysis
Snowflake Score
Valuation	2/6
Future Growth	3/6
Past Performance	6/6
Financial Health	6/6
Dividends	4/6

NDSN Stock Overview

Nordson Corporation engineers, manufactures, and markets products and systems to dispense, apply, and control adhesives, coatings, polymers, sealants, biomaterials, and other fluids worldwide.

Rewards

Trading at 37.1% below our estimate of its fair value

Earnings are forecast to grow 10.65% per year

Earnings grew by 57.1% over the past year

Risk Analysis

No risks detected for NDSN from our risk checks.

Nordson Competitors

Stanley Black & Decker

NYSE:SWK

US$13.6b

Snap-on

NYSE:SNA

US$11.8b

IDEX

NYSE:IEX

US$15.8b

Graco

NYSE:GGG

US$11.3b

Price History & Performance

Summary of all time highs, changes and price drops for Nordson
Historical stock prices
Current Share Price	US$230.23
52 Week High	US$272.28
52 Week Low	US$194.89
Beta	0.97
1 Month Change	10.99%
3 Month Change	10.73%
1 Year Change	3.88%
3 Year Change	65.78%
5 Year Change	79.15%
Change since IPO	1,779.43%

Shareholder Returns

	NDSN	US Machinery	US Market
7D	1.2%	0.4%	1.1%
1Y	3.9%	-12.7%	-13.0%

Return vs Industry: NDSN exceeded the US Machinery industry which returned -12.7% over the past year.

Return vs Market: NDSN exceeded the US Market which returned -13% over the past year.

Price Volatility

Is NDSN's price volatile compared to industry and market?
NDSN volatility
NDSN Average Weekly Movement	3.6%
Machinery Industry Average Movement	6.0%
Market Average Movement	7.9%
10% most volatile stocks in US Market	17.1%
10% least volatile stocks in US Market	3.2%

Stable Share Price: NDSN is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: NDSN's weekly volatility (4%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1935	7,200	Naga Nagarajan	https://www.nordson.com

Nordson Corporation engineers, manufactures, and markets products and systems to dispense, apply, and control adhesives, coatings, polymers, sealants, biomaterials, and other fluids worldwide. It operates through two segments, Industrial Precision Solutions (IPS) and Advanced Technology Solutions (ATS). The IPS segment provides dispensing, coating, and laminating systems for adhesives, lotions, liquids, and fibers to disposable products and roll goods; automated adhesive dispensing systems used in packaged goods industries; components and systems used in the thermoplastic melt stream; and product assembly systems for use in paper and paperboard converting applications, and manufacturing roll goods, as well as for the assembly of plastic, metal, and wood products.

Nordson Fundamentals Summary

How do Nordson's earnings and revenue compare to its market cap?
NDSN fundamental statistics
Market Cap	US$13.24b
Earnings (TTM)	US$482.69m
Revenue (TTM)	US$2.49b

27.4x

P/E Ratio

5.3x

P/S Ratio

Is NDSN overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
NDSN income statement (TTM)
Revenue	US$2.49b
Cost of Revenue	US$1.10b
Gross Profit	US$1.39b
Other Expenses	US$911.51m
Earnings	US$482.69m

Last Reported Earnings

Apr 30, 2022

Next Earnings Date

Aug 22, 2022

Earnings per share (EPS)	8.39
Gross Margin	55.98%
Net Profit Margin	19.38%
Debt/Equity Ratio	36.1%

How did NDSN perform over the long term?

See historical performance and comparison

Dividends

0.9%

Current Dividend Yield

23%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is NDSN undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

2/6

Valuation Score 2/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for NDSN?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for NDSN. This is calculated by dividing NDSN's market cap by their current preferred multiple.
What is NDSN's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	US$13.24b

NDSN key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	5.6x
Enterprise Value/EBITDA	18x
PEG Ratio	2.6x

Price to Earnings Ratio vs Peers

How does NDSN's PE Ratio compare to its peers?

NDSN PE Ratio vs Peers

The above table shows the PE ratio for NDSN vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	21.1x
SWK Stanley Black & Decker	14.4x	29.9%	US$13.6b
SNA Snap-on	13.6x	-0.9%	US$11.8b
IEX IDEX	30.8x	7.6%	US$15.8b
GGG Graco	25.6x	7.8%	US$11.3b
NDSN Nordson	27.4x	10.6%	US$13.2b

Price-To-Earnings vs Peers: NDSN is expensive based on its Price-To-Earnings Ratio (27.4x) compared to the peer average (21.1x).

Price to Earnings Ratio vs Industry

How does NDSN's PE Ratio compare vs other companies in the US Machinery Industry?

Price-To-Earnings vs Industry: NDSN is expensive based on its Price-To-Earnings Ratio (27.4x) compared to the US Machinery industry average (22.6x)

Price to Earnings Ratio vs Fair Ratio

What is NDSN's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

NDSN PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	27.4x
Fair PE Ratio	20.8x

Price-To-Earnings vs Fair Ratio: NDSN is expensive based on its Price-To-Earnings Ratio (27.4x) compared to the estimated Fair Price-To-Earnings Ratio (20.8x).

Share Price vs Fair Value

What is the Fair Price of NDSN when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: NDSN ($230.23) is trading below our estimate of fair value ($366.14)

Significantly Below Fair Value: NDSN is trading below fair value by more than 20%.

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is less than 20% higher than the current share price.

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Future Growth

How is Nordson forecast to perform in the next 1 to 3 years based on estimates from 11 analysts?

Future Growth Score

3/6

Future Growth Score 3/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

10.6%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: NDSN's forecast earnings growth (10.6% per year) is above the savings rate (1.9%).

Earnings vs Market: NDSN's earnings (10.6% per year) are forecast to grow slower than the US market (14.6% per year).

High Growth Earnings: NDSN's earnings are forecast to grow, but not significantly.

Revenue vs Market: NDSN's revenue (8% per year) is forecast to grow faster than the US market (7.9% per year).

High Growth Revenue: NDSN's revenue (8% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: NDSN's Return on Equity is forecast to be high in 3 years time (21.6%)

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Past Performance

How has Nordson performed over the past 5 years?

Past Performance Score

6/6

Past Performance Score 6/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

5.9%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: NDSN has high quality earnings.

Growing Profit Margin: NDSN's current net profit margins (19.4%) are higher than last year (13.9%).

Past Earnings Growth Analysis

Earnings Trend: NDSN's earnings have grown by 5.9% per year over the past 5 years.

Accelerating Growth: NDSN's earnings growth over the past year (57.1%) exceeds its 5-year average (5.9% per year).

Earnings vs Industry: NDSN earnings growth over the past year (57.1%) exceeded the Machinery industry 9.3%.

Return on Equity

High ROE: NDSN's Return on Equity (22%) is considered high.

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Financial Health

How is Nordson's financial position?

Financial Health Score

6/6

Financial Health Score 6/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: NDSN's short term assets ($1.1B) exceed its short term liabilities ($722.5M).

Long Term Liabilities: NDSN's short term assets ($1.1B) exceed its long term liabilities ($883.2M).

Debt to Equity History and Analysis

Debt Level: NDSN's net debt to equity ratio (30.6%) is considered satisfactory.

Reducing Debt: NDSN's debt to equity ratio has reduced from 177% to 36.1% over the past 5 years.

Debt Coverage: NDSN's debt is well covered by operating cash flow (64.9%).

Interest Coverage: NDSN's interest payments on its debt are well covered by EBIT (33.6x coverage).

Balance Sheet

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Dividend

What is Nordson current dividend yield, its reliability and sustainability?

Dividend Score

4/6

Dividend Score 4/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

0.89%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: NDSN's dividend (0.89%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.52%).

High Dividend: NDSN's dividend (0.89%) is low compared to the top 25% of dividend payers in the US market (4.08%).

Stability and Growth of Payments

Stable Dividend: NDSN's dividends per share have been stable in the past 10 years.

Growing Dividend: NDSN's dividend payments have increased over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its low payout ratio (23.1%), NDSN's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its reasonably low cash payout ratio (25%), NDSN's dividend payments are well covered by cash flows.

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Management

How experienced are the management team and are they aligned to shareholders interests?

4.5yrs

Average management tenure

CEO

Naga Nagarajan (59 yo)

3yrs

Tenure

US$10,308,750

Compensation

Mr. Sundaram Nagarajan, also known as Naga, has been the President, Director and Chief Executive Officer of Nordson Corporation since August 1, 2019. He served as an Executive Vice President, Welding Segme...

CEO Compensation Analysis

Compensation vs Market: Naga's total compensation ($USD10.31M) is about average for companies of similar size in the US market ($USD12.91M).

Compensation vs Earnings: Naga's compensation has increased by more than 20% in the past year.

Leadership Team

Experienced Management: NDSN's management team is considered experienced (4.5 years average tenure).

Board Members

Experienced Board: NDSN's board of directors are considered experienced (6.8 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/08/09 00:00
End of Day Share Price	2022/08/09 00:00
Earnings	2022/04/30
Annual Earnings	2021/10/31