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Fortive (FTV)
NYSE:FTV
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Fortive
(NYSE:FTV)
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Rating:67Neutral
Price Target:
$65.00
▲(11.53% Upside)
Action:ReiteratedDate:02/05/26
The score is driven primarily by solid fundamentals (strong cash conversion and historically healthy margins) but is held back by the 2025 revenue/margin step-down and balance-sheet visibility concerns. Technically, the stock trends positively above key moving averages, though near-overbought RSI limits upside confidence. Valuation is a notable drag given the high P/E and low dividend yield, partially offset by a generally positive earnings call with constructive 2026 EPS guidance, margin expansion targets, and strong capital returns.
Positive Factors
Strong free cash flow conversion
Consistently converting earnings to cash (>90% FCF conversion) provides durable internal funding for R&D, capex, dividends and buybacks. High cash generation underpins financial flexibility, supports deleveraging or M&A, and cushions cycles over the next 2–6 months.
Recurring software/AI and ARR momentum
Accelerating recurring revenue, ARR growth and high retention increase revenue predictability and raise lifetime customer value. Software and embedded AI raise margins over time, support cross-sell across instrumentation and services, and make earnings less cyclical over the medium term.
Historically strong margins and profitability
Sustained high gross and EBITDA margins indicate pricing power and favorable product mix in instrumentation and software. Margin resilience supports durable cash generation and provides room to invest in growth while maintaining earnings quality through industry cycles.
Negative Factors
2025 revenue decline and margin compression
A noticeable 2025 drop in revenue and net margin compression signals weakening end-market demand or adverse mix. This creates a nearer-term earnings and cash-flow drag that must be reversed by sustained organic growth or restructuring to restore prior profitability levels.
Balance-sheet visibility concerns
A material year‑over‑year equity decline and inconsistent 2025 ratio data reduce clarity on leverage and solvency. Limited balance-sheet transparency complicates capital-allocation decisions and raises uncertainty about capacity for buybacks, dividends or opportunistic M&A.
AHS capital-equipment and reimbursement headwinds
Policy-driven deferral of hospital capital outlays pressures AHS equipment revenue and compresses margins, forcing reinvestments. If reimbursement and funding trends persist, the AHS segment could face prolonged revenue volatility and slower structural recovery.
Fortive (FTV) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$18.53B
Dividend Yield0.43%
Average Volume (3M)4.21M
Price to Earnings (P/E)33.7
Beta (1Y)0.95
Revenue Growth-8.96%
EPS Growth-30.29%
CountryUS
Employees18,000
SectorTechnology
Sector Strength88
IndustryHardware, Equipment & Parts
Share Statistics
EPS (TTM)0.90
Shares Outstanding317,611,630
10 Day Avg. Volume4,699,618
30 Day Avg. Volume4,214,202
Financial Highlights & Ratios
PEG Ratio-1.13
Price to Book (P/B)2.71
Price to Sales (P/S)3.40
P/FCF Ratio17.86
Enterprise Value/Market Cap1.15
Enterprise Value/Revenue4.15
Enterprise Value/Gross Profit6.81
Enterprise Value/Ebitda18.25
Forecast
1Y Price Target
$59.90Price Target Upside2.78% Upside
Rating ConsensusHold
Number of Analyst Covering10
EPS Forecast (FY)2.95
Revenue Forecast (FY)$4.31B
Fortive Business Overview & Revenue Model
Company DescriptionFortive Corporation designs, develops, manufactures, markets, and services professional and engineered products, software, and services worldwide. Its Intelligent Operating Solutions segment offers connected reliability tools; environment, health, safety, and quality enterprise software products; facility and asset lifecycle software; pre-construction planning and construction procurement solutions; ruggedized professional test tools; electric, pressure, and temperature calibration tools; and portable gas detection tools for a range of vertical end markets including manufacturing, process industries, healthcare, utilities and power, communications and electronics, and others. It markets its products and services under the ACCRUENT, FLUKE, GORDIAN, INDUSTRIAL SCIENTIFIC, INTELEX, PRUFTECHNIK, and SERVICECHANNEL brands. The company's Precision Technologies segment provides electrical test and measurement instruments and services; energetic material devices; and sensor and control system solutions for power and energy, medical equipment, food and beverage, aerospace and defense, off-highway vehicles, electronics, semiconductors, and other general industrial markets. This segment markets its products under the ANDERSON-NEGELE, GEMS, SETRA, HENGSTLER-DYNAPAR, QUALITROL, PACIFIC SCIENTIFIC, KEITHLEY, and TEKTRONIX brands. Its Advanced Healthcare Solutions segment offers hardware and software products and services, including instrument and device reprocessing, instrument tracking, biomedical test tools, radiation safety monitoring, and asset management services; subscription-based surgical inventory management systems to facilitate inventory management and regulatory compliance, as well as technical, analytical, and compliance services to determine radiation exposure services under the ASP, CENSIS, CENSITRAC, EVOTECH, FLUKE BIOMEDICAL, INVETECH, LANDAUER, RAYSAFE, and STERRAD brands. Fortive Corporation was incorporated in 2015 and is headquartered in Everett, Washington.
How the Company Makes MoneyFortive generates revenue primarily through the sale of its products and services in the instrumentation and industrial technology sectors. Key revenue streams include direct product sales, subscription-based software services, and recurring revenue from maintenance and support agreements. The company also benefits from strategic partnerships and collaborations with other technology firms, which enhance its product offerings and market reach. Additionally, Fortive's focus on innovation and investment in research and development allows it to stay competitive and meet the evolving needs of its customers, contributing to sustained earnings growth.
Fortive Key Performance Indicators (KPIs)
Fortive Earnings Call Summary
Earnings Call Date:Feb 04, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 23, 2026
Earnings Call Sentiment Positive
The call delivered a generally positive message: Fortive reported accelerating revenue and EPS growth, expanded adjusted EBITDA margins, strong free cash flow conversion (>100%), and aggressive share repurchases that reduced share count. Management initiated constructive 2026 guidance (~9% EPS growth at midpoint) and reiterated a 50–100 bps EBITDA margin expansion framework while highlighting recurring revenue and software/AI momentum (ServiceChannel, Fluke, gas detection HaaS). Key negatives included gross margin pressure driven by product mix and tariff impacts, AHS capital equipment headwinds and reinvestments that compressed AHS margins, and a conservative top-line guide relative to Q4 strength. Overall, the positives (earnings beats, margin expansion, robust cash generation, share buybacks, and software recurring revenue momentum) outweigh the challenges, though the company acknowledges further execution is required.Q4-2025 Updates
Positive Updates
Revenue and Core Growth
Q4 total revenue of $1.1B, up just over 4.5% year-over-year on a reported basis and up just over 3% on a core basis; full-year reported revenue expected to be nearly $4.3B with 2026 core revenue growth guidance of 2%–3%.
Profitability and Margin Expansion
Q4 adjusted EBITDA of $358M, up ~8% year-over-year; consolidated adjusted EBITDA margin expanded ~100 basis points to nearly 32%; iOS adjusted EBITDA grew 8% to $288M with iOS EBITDA margin just over 37% (up ~100 bps).
Earnings Beat and EPS Growth
Q4 adjusted EPS of $0.90, up ~13% year-over-year; full-year adjusted EPS of $2.71, up just over 12% year-over-year and exceeding the high end of prior guidance ($2.63–$2.67).
Strong Cash Generation and Capital Return
Q4 free cash flow of ~$315M and full-year free cash flow of ~$930M with free cash flow conversion on adjusted net income north of 100%; deployed $265M to share repurchases in Q4 and ~$1.3B in the second half of 2025 (repurchased ~26M shares, ~8% diluted), plus ~2.5M additional shares after quarter end; diluted share count modeled at ~315M.
Encouraging Segment Performance — iOS
iOS revenue grew just over 5% reported and ~4% core; strength driven by Fluke (data center, professional instrumentation), gas detection (hardware-as-a-service) and facility/asset lifecycle software; iOS adjusted gross margin just under 67% and showed operating leverage.
Recurring Revenue, Software Momentum and AI Adoption
Recurring revenue grew faster than consolidated revenue in Q4—driven by maintenance software and embedded data/AI capabilities across iOS and AHS; company is deploying AI enhancements (e.g., ServiceChannel release, Fluke software) and reports strong ARR growth, high retention metrics and net dollar expansion in software businesses.
2026 Financial Framework and Guidance
Initiated full-year 2026 adjusted EPS guidance of $2.90–$3.00 (approximately 9% year-over-year growth at midpoint); planning assumptions include mid-teens adjusted effective tax rate, ~ $120M net interest expense, and reported revenue ~ $4.3B with core growth 2%–3%; reiterated 50–100 bps of EBITDA margin expansion in the 2026–2027 framework.
Negative Updates
Gross Margin Pressure
Consolidated adjusted gross margin down ~150 basis points year-over-year in Q4 (about 63%) driven largely by product mix, the net effect of tariffs and countermeasures, and targeted growth investments; iOS gross margin down ~130 bps and AHS gross margin declined to 56% from ~58% prior year.
AHS Capital Equipment Headwinds and Margin Impact
AHS revenue grew ~3% (1.6% core) and was impacted by reimbursement and funding policy changes that deferred U.S. hospital capital expenditures; this dynamics pressured equipment-related revenue and led to strategic reinvestments in the quarter that reduced AHS margins (Q4 adjusted EBITDA $92M; AHS EBITDA margin ~26%).
Tariffs and Cost Headwinds
Tariff-related effects and countermeasures negatively impacted margins in 2025; while management does not expect tariffs net of countermeasures to be meaningful to the bottom line in 2026, tariffs were cited as a driver of the Q4 gross margin decline.
Guidance Top-Line Conservatism vs. Q4 Strength
Q4 organic/core growth outpaced the 2026 core growth guidance (Q4 core ~3% vs. 2026 core guidance of 2%–3%), indicating management chose a conservative shape for 2026 despite late-2025 acceleration—potential upside if macro and demand trends improve but causing some uncertainty versus recent quarter strength.
Leverage and Interest Considerations
Leverage ended the year at 2.6x gross debt to adjusted EBITDA and management models net interest expense just over $120M for 2026; share repurchases materially reduced share count but add financing/interest considerations to capital allocation plans.
Company Guidance
Fortive initiated full-year 2026 adjusted EPS guidance of $2.90–$3.00 per share (about 9% year‑over‑year growth at the midpoint), based on continuation of Q4 market dynamics and current tariff rates; they expect core revenue growth of 2%–3% with reported revenue of nearly $4.3 billion at current FX and model a diluted share count of ~315 million. The outlook assumes a mid‑teens adjusted effective tax rate (Q1–Q3: high‑teens; Q4: high‑single to low‑double digits), full‑year net interest expense just over $120 million, an approximate 300‑basis‑point FX tailwind in Q1 that moderates through the year, and management continues to target 50–100 basis points of adjusted EBITDA margin expansion under the 2026–2027 framework.Fortive Financial Statement Overview
Summary
Strong, consistent cash generation (free cash flow ~90%+ of net income) and solid underlying margins support resilience, but 2025 showed an ~8.8% revenue decline and net margin compression. Balance-sheet visibility is also clouded by a sharp reported equity drop and inconsistent/missing 2025 ratio fields, increasing uncertainty.Income Statement
Profitability is solid with consistently strong gross margins (~56%–61%) and healthy EBITDA margins (~22%–27%) across the period, supporting resilient earnings power. However, the latest annual period (2025) shows a notable downturn: revenue fell about 8.8% and net margin compressed (to ~11.3% from ~13.4% in 2024), indicating weakening demand and/or less favorable mix. Longer-term growth was positive from 2021–2024, but the recent decline and margin pressure reduce confidence in near-term momentum.64
Positive
Balance Sheet
Leverage looks moderate based on prior years’ debt relative to equity (roughly 0.35–0.49 from 2020–2024), suggesting a generally manageable capital structure. That said, the 2025 balance sheet shows a sharp drop in equity versus 2024 (while debt also declined), and the provided 2025 leverage and return-on-equity fields appear inconsistent (shown as 0), limiting visibility into current-period leverage and shareholder returns. Overall, the balance sheet appears acceptable, but the big year-over-year equity change and data gaps add risk.56
Neutral
Cash Flow
Cash generation is a clear strength: free cash flow is consistently high and closely tracks earnings, with free cash flow running at ~90%+ of net income each year (including 2025). Free cash flow improved in 2022–2024, but turned down in 2025 (down ~9.6%), aligning with the revenue/profit slowdown. Some provided cash-flow-to-debt servicing indicator fields show as 0 in 2025, which reduces precision, but the level of operating cash flow and free cash flow remains solid.70
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 5.14B | 6.23B | 6.07B | 5.83B | 5.25B |
| Gross Profit | 3.13B | 3.73B | 3.59B | 3.36B | 3.01B |
| EBITDA | 1.17B | 1.67B | 1.57B | 1.44B | 1.18B |
| Net Income | 579.20M | 832.90M | 865.80M | 755.20M | 608.40M |
Balance Sheet | |||||
| Total Assets | 11.74B | 17.02B | 16.91B | 15.89B | 16.47B |
| Cash, Cash Equivalents and Short-Term Investments | 375.50M | 813.30M | 1.89B | 709.20M | 819.30M |
| Total Debt | 3.21B | 3.88B | 3.81B | 3.42B | 4.14B |
| Total Liabilities | 5.28B | 6.82B | 6.59B | 6.20B | 6.95B |
| Stockholders Equity | 6.45B | 10.19B | 10.32B | 9.68B | 9.51B |
Cash Flow | |||||
| Free Cash Flow | 978.10M | 1.41B | 1.25B | 1.21B | 911.10M |
| Operating Cash Flow | 1.08B | 1.53B | 1.35B | 1.30B | 961.10M |
| Investing Cash Flow | -135.40M | -1.80B | -195.40M | -102.50M | -2.62B |
| Financing Cash Flow | -1.39B | -792.70M | 32.30M | -1.27B | 652.00M |
Fortive Technical Analysis
Positive
58.28
Price Trends
55.72
Positive
53.19
Positive
51.98
Positive
Market Momentum
0.89
Positive
55.68
Neutral
42.77
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FTV, the sentiment is Positive. The current price of 58.28 is above the 20-day moving average (MA) of 56.76, above the 50-day MA of 55.72, and above the 200-day MA of 51.98, indicating a bullish trend. The MACD of 0.89 indicates Positive momentum. The RSI at 55.68 is Neutral, neither overbought nor oversold. The STOCH value of 42.77 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FTV.
Fortive Risk Analysis
Fortive disclosed 36 risk factors in its most recent earnings report. Fortive reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Fortive Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $31.11B | 35.25 | 8.92% | ― | 7.41% | -12.85% | |
72 Outperform | $24.20B | 29.15 | 16.85% | ― | 0.77% | 0.51% | |
71 Outperform | $8.07B | 35.43 | 9.74% | ― | 7.40% | 13.79% | |
67 Neutral | $18.53B | 33.72 | 7.78% | 0.43% | -8.96% | -30.29% | |
63 Neutral | $41.98B | 230.09 | 3.63% | ― | 20.80% | ― | |
63 Neutral | $15.92B | 38.36 | 7.32% | ― | -0.86% | -75.37% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
FTV
Fortive
58.28
-1.79
-2.99%
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68.28%
COHR
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SANM
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149.37
64.48
75.95%
TDY
Teledyne Technologies
668.72
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34.81%
TRMB
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-3.31
-4.67%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.