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Pentair (PNR): analysis traps

Where its figures could mislead a reader, and what to check before taking them at face value · Data: Q3 2026, to Sep 30, 2026, filed Oct 27, 2026; rules v1.1

Pentair (PNR): 0 rules of 10 triggered on the filings to Sep 30, 2026. 1 to review; 2 with insufficient data; 2 not applicable. Each is a question to verify, with the normal explanation that would produce the same figures.

Check these first

A precise DCF value = the true value To review · confidence high

The DCF's point value is 40.99 a share (price 68.12); 67% of it is the terminal value, a number about years no one has seen. Moving revenue growth (each year) by ±5 pts alone takes it from 31.56 to 52.35; across every method the research ran the range is 0 to 201. The value is a range; the decimals are not information.

Innocent reading: A stable, mature business with a narrow range of outcomes, where the point value is a fair summary.

Every rule

A01 FCF growth = the business improved Not triggered confidence medium

Free cash flow rose $54M to $746M; working capital and lower capex explain 10% of it, so most of the gain is in operating cash flow itself.

The figures and how they are read

Fiscal year before	FY2024
Fiscal year	FY2025
Operating cash flow, year before	$767M
Operating cash flow	$815M
Capex, year before	$74M
Capex	$69M
Free cash flow, year before	$692M
Free cash flow	$746M
Change in FCF	$54M
Change in capex	−$6M
Working capital: change in its cash contribution	−$88M
Of which: capex cut	$6M
Of which: working capital released	0.00
Share of the increase that need not repeat	+10.4%
Operating cash flow before working capital: change	136300000.00

FCF = operating cash flow − cash capex; ΔFCF = ΔOCF − ΔCapEx; the working-capital part is the change in the cash-bridge items (receivables, inventory, payables, accruals), with the sign of the cash flow statement

Source: FY2025 (cash flow statement, fiscal year) · FY2024 (cash flow statement, fiscal year before)

A07 Stock compensation added back = no economic cost Not triggered confidence high

Stock compensation is 0.9% of revenue: small enough that adding it back changes little.

The figures and how they are read

Fiscal year	FY2025
Stock compensation	$37M
Revenue	$4.2B
SBC / revenue	+0.9%
Buybacks	$225M
Buybacks / SBC	6.1
Diluted shares, year before	167.1M shares
Diluted shares	165.5M shares
Diluted shares: change	-1.0%

SBC / revenue from the cash flow statement's add-back; the diluted weighted share count year over year; buybacks from the financing section

Source: FY2025 (stock compensation, buybacks and the diluted share count, fiscal year)

B02 Receivables growing = future cash is certain Insufficient data

fewer than five quarters with receivables and revenue on file (a year-over-year comparison needs five)

B08 Adjusted profit = economic profit Insufficient data

no reconciliation table read from the releases yet and fewer than three quarters with both an adjusted and a GAAP EPS

C02 Low net debt = no refinancing risk Not triggered confidence medium

Nothing comes due within a year; net debt is $1.4B.

The figures and how they are read

Cash and investments	$74M
Debt	$1.5B
Net debt	$1.4B
Due within a year	0
Read from	the debt maturity table
Free cash flow, twelve months	$647M
Cash plus free cash flow	$721M
Coverage of what is due	—
Due in the second year	$575M
Balance sheet date	2026-09-30

due within a year from the maturity table (else the current portion of debt), against cash and investments plus free cash flow over the last twelve months (zero if negative); no credit lines assumed

Source: FY2025 (debt maturities, cash and investments)

D03 EPS growth = profit growth Not triggered confidence high

EPS fell 19% and net income fell 21% in Q3 2026; the share count fell 2.9%: EPS growth follows profit growth.

The figures and how they are read

Quarter	Q3 2026
Quarter before	Q3 2025
EPS, year before	$1.12
EPS	$0.91
Net income, year before	$184M
Net income	$145M
Diluted shares, year before	165.1M shares
Diluted shares	160.3M shares
EPS growth	-18.9%
Net income growth	-21.3%
Diluted shares: change	-2.9%
eps from profit	-$0.24
eps from share count	$0.03

EPS and net income against the same quarter a year earlier; the EPS bridge attributes the change to profit first, then to the share count (the order is fixed and disclosed)

Source: Q3 2026 (net income, diluted shares, EPS) · Q3 2025 (the same quarter a year earlier)

E02 Low P/E at a cyclical peak = undervalued Not triggered confidence medium

Net income of $612M is not at a cyclical high against the last eight years (median $553M, best $654M): the P/E of 17.8× is on a normal year.

The figures and how they are read

market value	$10.9B
net income ttm	$612M
pe ttm	17.80
net income median fy	$553M
pe mid cycle	19.70
net income peak fy	$654M
years	FY2018 / 347.0; FY2019 / 356.0; FY2020 / 359.0; FY2021 / 553.0; FY2022 / 481.0; FY2023 / 623.0; FY2024 / 625.0; FY2025 / 654.0
down years in window	1

P/E on the trailing twelve months' net income against the P/E on the median net income of the last eight fiscal years (a mid-cycle stand-in); 'at a peak' = this year's profit at or above 90% of the best year and at least 1.3× the median

Source: Q3 2026 (net income, trailing twelve months)

E07 A precise DCF value = the true value To review confidence high

The figures and how they are read

dcf value	40.99
price	68.12
terminal value share	+67.1%
swing by input	Revenue growth (each year) / ±5 pts / 31.56 / 52.35; Operating margin / ±3 pts / 33.54 / 48.43; WACC / ±1 pt / 34.71 / 49.59; Tax rate / ±5 pts / 38.16 / 43.82
range all methods	0.0; 200.7

the DCF's point value against the share of it that is the terminal value and the value at each input moved by one step (growth ±5 pts, WACC ±1 pt, margin ±3 pts …); the range across every method the research ran

Source: 2026-11-08 (valuation research)

What would explain it innocently

A stable, mature business with a narrow range of outcomes, where the point value is a fair summary
The inputs that matter most are themselves well known (a regulated return, a long contract)

What to look for in the filing

Which input you believe differs from the research's and why
What the price implies for growth (the reverse DCF on the fair-value page)

What would show the trap does not apply

The DCF's value is robust to the terminal growth and discount rate (the range's low end is still above the price)
The company's cash flows over the next three years track the DCF's early years

Look again: next filing.

J06 A bank's low P/E and high profit = safe Not applicable

not a bank

J08 A REIT's low net income = the dividend is unsafe Not applicable

not a REIT

What the statuses mean

Triggered: the filings show the pattern; read the normal explanations and the missing evidence before concluding anything. To review: one quarter or a weak signal; a reader's judgement, not a pattern. Not triggered: the pattern is absent on these figures. Insufficient data: the filings read so far do not hold what the rule needs; this is not a clean bill. Not applicable: the rule is not meant for this kind of company (a bank's working capital, a loss-making quarter's EPS growth). Out of date: the latest filing is more than fifteen months old.

Severity is what the pattern could mean for cash, value or solvency; confidence is how reliable the inputs and the reading are. The two are kept apart.

Record a view

A reader's judgement, grounds, what would change it and the next review; kept in the browser (needs JavaScript).

Every rule and the companies it triggers on → Pentair: cash flow →

Each rule reads the company's own filings by a fixed formula and says what would explain the same figures innocently. A triggered rule is a question to verify, not a finding of manipulation, and not a view on the stock. Missing data is shown as missing, never as clear. Not investment advice.