Illinois Tool Works (ITW) has been holding steady at $251.69 for the past six months, prompting investors to wonder whether to buy, sell, or hold the stock post Q4 earnings. Founded by Byron Smith, ITW manufactures components and equipment for various industries. However, the company has failed to grow its organic revenue over the last two years, indicating a need for improvement in products, pricing, or strategy. Analysts forecast a 1% drop in revenue for the next 12 months, suggesting stagnant growth. Additionally, ITW’s free cash flow margin has declined by 2.6 percentage points over the last five years, raising concerns about the company’s capital needs. At a valuation of 23.6x forward price-to-earnings, some believe ITW may be overpriced, with better opportunities available elsewhere. Despite ITW not passing quality tests, the stock market is anticipated to begin a new bull run, providing potential opportunities for investors to explore. Investors are advised to research more dominant software businesses for better investment prospects.
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