$127.34
$252.30
bear $127.34
base $193.85
bull $252.30
margin of safety $105.00
market price* $322.31
Nordson makes precision equipment and components that dispense, apply and control adhesives, coatings, sealants, polymers and other fluids, plus test and inspection systems. It reports three segments: Industrial Precision Solutions (nonwovens, packaging, industrial coatings, polymer processing and, since buying ARAG in August 2023, precision agriculture spraying; $1.33 billion of fiscal 2025 sales), Medical and Fluid Solutions (medical components and fluid handling, enlarged by the August 2024 purchase of Atrion; $835 million), and Advanced Technology Solutions (surface treatment, precision dispensing and test and inspection used largely in electronics production; $625 million). No single customer was 10% of sales. What the business earns. We measure owner earnings as operating cash flow, less the swing in working capital, less stock-based pay, less the capital spending needed to keep the business as it is. Nordson is a light-capital business: capital spending ran about 2.5% of sales over the last ten years. Owner earnings per share rose from $4.98 in fiscal 2016 to $10.33 in fiscal 2025 (years end October 31). Non-cash charges were added back as the cash-flow statement does, including an $87 million write-down in 2020, a $41 million pension settlement in 2022, $12.5 million of 2025 charges for leaving medical contract manufacturing, and about $79 million a year of amortization on acquired intangibles. Because that amortization reflects acquired technology and customer relationships that wear out, none of our cases assumes growth beyond what is described below, and after year ten every case holds cash flow flat in dollars, which shrinks it in real terms. Because Nordson carries debt, we value the business before its lenders (owner earnings plus about $99 million of cash interest in 2025) and then subtract what it owes. On that basis the business produced $687 million in fiscal 2025, equal to 24.6% of sales. From 2021 through 2025 that figure ran between 22.8% and 24.6% of sales, a clear step up from 17% to 20% in 2016 to 2020. We use the middle of the 2021-2025 range, 23.8%, applied to fiscal 2025 sales of $2.79 billion, giving a normal level of about $665 million. Fiscal 2025 is the first full year with both ARAG and Atrion, so earlier dollar totals understate the current business while the debt that bought those companies is fully counted. Growth. Most of Nordson's past growth was bought. Sales rose from $1.81 billion in 2016 to $2.79 billion in 2025, but underlying (organic) sales fell 1.4% in 2023, 2.5% in 2024 and 2.5% in 2025, after gains of about 11% in both 2021 and 2022 (2022 helped by price increases). By our estimate, underlying sales grew only about 1% a year over 2019-2025. The large acquisitions (about $1.4 billion in fiscal 2023, $790 million for Atrion) were debt-funded and too big to treat as a steady, repeatable engine, so no future acquisitions are credited in any case. Owner earnings grew about 13% per share in 2025, driven by the first full year of Atrion while underlying sales fell. The first nine months of fiscal 2026 (through July 31, 2026) show real improvement: sales up 9.2%, operating profit up 18% and net income up 21%, with net income higher in each of the three quarters. Base case ($193.85 per share): business cash flow rises 5% in the first year, which still sits below what the last twelve reported months already imply, and then grows 1% a year, the demonstrated long-run underlying rate, through year ten, flat thereafter. The first-year rate is well below the 2025 actual growth of 12%. The business is worth about $12.46 billion; it owes about $1.60 billion net; shareholders' value is about $10.86 billion. Bear case ($127.34 per share): the 2026 recovery fades, cash margin settles at the low end of the recent range (22.8%), and the 2.5% yearly decline in underlying sales seen in 2024 and 2025 persists for ten years, leaving cash flow near $494 million, below the 2021 level, then flat. The business is worth about $8.74 billion, less $1.60 billion of net debt, leaving about $7.14 billion. Bull case ($252.30 per share): cash flow starts from the actual 2025 level of $687 million, the 2026 operating gains carry it up 12% in year one, and demonstrated pricing power (organic sales rose 10.8% in 2022 including price increases to offset inflation) supports 3% a year through year ten, then flat. The business is worth about $15.74 billion, less $1.60 billion, leaving about $14.14 billion. Debt. At July 31, 2026 Nordson owed about $1.73 billion, including $192 million of commercial paper and the three fixed-rate bond issues described in the 2025 annual report: $350 million at 5.600% due 2028, $600 million at 4.500% due 2029 and $500 million at 5.800% due 2033. Adding about $14 million of finance leases, deducting $113 million of cash and a $32 million credit for bond coupons below our 6% yardstick gives net debt of about $1.60 billion. Borrowings fell from $2.19 billion at October 2024 to $1.73 billion. Cash interest was about one-seventh of 2025 business cash flow, and the company reported compliance with all covenants at October 31, 2025, so refinancing the 2028 and 2029 maturities is not a material risk in any case. Margin-of-safety price. The margin-of-safety price is $105. At that price the bear-case value of about $127 is still above the price. If the shares reach the base value of about $194 within three years, the base case implies about 25% a year including the dividend ($0.82 a quarter); if it takes four years, about 19-20%. The two-fold gap between the bear and bull cases and the three-year run of falling underlying sales argue for this margin rather than a thinner one. We do not lean on the bull case. Change from our previous analysis (August 27, 2026: bear $55.03, base $168.66, bull $311.20, margin-of-safety price $101): we now discount every case at a single 6% rate and carry risk through the cases themselves rather than through higher discount rates; we no longer assume 7-11% yearly growth, because most of that history came from debt-funded acquisitions while underlying sales fell three years running, which lowers the bull case; we measure debt at the July 2026 balance ($1.60 billion net, down from about $1.89 billion), and we value the business on its full post-acquisition cash-flow level, which lifts the bear and base cases. What would make this wrong: a deeper or longer industrial and electronics downturn than 2023-2025 that pushes cash margins back toward the 20% of 2019-2020, or a large new debt-funded acquisition that fails to earn its price. On the upside, a return to sustained underlying growth would be worth well above the base case. Nordson has manufacturing in China and other countries and has flagged tariffs on imported materials, particularly from China, as a cost pressure.