FTV
IndustrialsFortive
Price Chart
Market Data
Financials
XBRL · SEC EDGAR2014–2025(12yr)| Metric | FY 2014 | FY 2015 | FY 2016 | FY 2017 | FY 2018 | FY 2019 | FY 2020 | FY 2021 | FY 2022 | FY 2023 | FY 2024 | FY 2025Latest | YoY |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | $6.3B | $6.2B | $5.4B | $5.8B | $6.5B | $7.3B | $4.6B | $5.3B | $5.8B | $6.1B | $6.2B | $4.2B | -33.3% |
| Gross Profit | $3.0B | $3.0B | $3.0B | $3.3B | $3.3B | $3.7B | $2.6B | $3.0B | $3.4B | $3.6B | $3.7B | $2.6B | -29.2% |
| Gross Margin | 48.1% | 48.6% | 56.4% | 57.3% | 51.5% | 50.3% | 56.3% | 57.2% | 57.7% | 59.3% | 59.9% | 63.5% | +3.6pp |
| Operating Income | $1.2B | $1.3B | $1.2B | $1.4B | $1.2B | $1.0B | $539.4M | $812.8M | $987.4M | $1.1B | $1.2B | $720.2M | -40.3% |
| Operating Margin | 19.7% | 20.5% | 23.2% | 23.5% | 18.3% | 13.7% | 11.6% | 15.5% | 16.9% | 18.7% | 19.4% | 17.3% | -2.0pp |
| Net Income | $883.4M | $863.8M | $872.3M | $1.0B | $2.9B | $738.9M | $1.6B | $608.4M | $755.2M | $865.8M | $832.9M | $579.2M | -30.5% |
| Net Margin | 13.9% | 14.0% | 16.2% | 18.1% | 45.2% | 10.1% | 34.8% | 11.6% | 13.0% | 14.3% | 13.4% | 13.9% | +0.6pp |
| Free Cash Flow | $844.1M | $888.9M | $1.0B | $1.0B | $1.2B | $1.2B | $1.4B | $911.1M | $1.2B | $1.2B | $1.4B | $978.1M | -30.5% |
| FCF Margin | 13.3% | 14.4% | 18.7% | 18.1% | 19.1% | 15.8% | 29.4% | 17.3% | 20.7% | 20.5% | 22.6% | 23.5% | +0.9pp |
| EPS (Diluted) | $2.56 | $2.50 | $2.51 | $2.96 | $8.21 | $1.97 | $4.49 | $1.63 | $2.10 | $2.43 | $2.36 | $1.73 | -26.7% |
1. THE BIG PICTURE
Fortive is a company in the midst of a radical self-correction, trading scale for higher margins. By spinning off its Precision Technologies segment and repurchasing 8% of its outstanding shares in the second half of 2025, Fortive has pivoted toward a "Fortive Accelerated" strategy that prioritizes software-integrated healthcare and industrial solutions. It is now a leaner, high-margin entity that relies on its "Fortive Business System" (FBS) culture to justify a valuation built on financial engineering and AI-driven efficiency.
2. WHERE THE RISKS HIT HARDEST
The Fortive Business System—Fortive’s primary competitive foundation—is threatened by the 2025-2026 leadership transition of the CEO, CFO, and Chief People Officer. This turnover risks stalling operational rigor just as Fortive faces "increased competition" from low-cost manufacturers and market consolidation (10-K Item 1). Furthermore, the focus on "accelerated innovation" is vulnerable to supply chain dependencies; reliance on sole-source suppliers for critical components could lead to product obsolescence if research and development investments fail to reach the market (10-K Item 1A).
3. WHAT THE NUMBERS SAY TOGETHER
The financials reveal a company successfully high-grading its portfolio but struggling to translate those gains into bottom-line growth. While TTMTTMTrailing Twelve Months — the most recent full year of financial data, updated on a rolling basis each quarter revenue fell 33.3% following the Ralliant separation, gross margins reached a peer-leading 61.0% (XBRL). However, this efficiency is not yet flowing through to operations: operating margins compressed by 2.1 percentage points to 17.3% in 2025, and fourth-quarter GAAPGAAPGenerally Accepted Accounting Principles — the standard U.S. accounting rules all public companies must follow net income actually declined by 0.9% (8-K). The disconnect between record gross margins and falling operating profits suggests that the costs of "FBS Amplified" and AI integration are currently consuming the gains from the higher-margin business mix. Short interest at 6.4% of the float indicates that a segment of the market remains skeptical of this transition's pace.
4. IS IT WORTH IT AT THIS PRICE?
At 17.7x forward earnings, Fortive trades at a modest discount to the peer median of 20.2x. The market is pricing in roughly 4.3% long-term growth (CAPM analysis). This appears achievable primarily because of the 9.0% buyback yield; Fortive is retiring enough shares to imply 13.3% EPSEPSEarnings Per Share — the company's net profit divided by its share count; the most common per-share profitability metric growth even if net income remains flat. However, this strategy is expensive. With $4.1B in net debt and a 18.7% FCFFCFFree Cash Flow — cash left after paying for operations and capital investments; what the company can actually spend, save, or return to shareholders margin, the capacity for future buybacks is tethered to the performance of the Advanced Healthcare Solutions segment, which saw operating profits drop 9.6% in the most recent quarter (8-K). For the current price to be right, Fortive must prove that its new, smaller revenue base can generate consistent organic growth without further divestitures.
5. WHAT WOULD CHANGE THIS VIEW?
- Cautious if operating margins continue to compress despite the higher-margin revenue mix, signaling that the Fortive Business System is failing to offset rising corporate or R&DR&DResearch & Development — spending on creating new products or technologies costs.
- Constructive if the Advanced Healthcare Solutions segment stabilizes its operating profit, proving that the recent 9.6% decline was a temporary hurdle rather than a structural loss of pricing power.
- Cautious if net debt rises further, as the current $4.1B load already limits the "disciplined capital allocation" central to the investment case.
6. BOTTOM LINE
Structural Advantage: High-margin hardware-to-software integration supported by a dominant 18.7% free cash flow margin and a proprietary operational framework (FBS).
Bottom Line: Fortive is a high-quality margin story currently obscured by a massive corporate restructuring and executive turnover; it is a play on management's ability to buy back its way to growth.
1. Top 5 Material Risks
- Global Economic Conditions: Fortive faces risks from slower economic growth, high inflation, and reduced capital expenditures, which can lead to lower product demand, longer sales cycles, and increased price competition.
- Supply Chain and Manufacturing: Reliance on sole or limited-source suppliers for critical components creates risks of production interruptions and inefficiencies; if Fortive cannot adjust its manufacturing capacity or purchase commitments to match demand, it faces excess inventory and margin compression.
- International Operations: With 44% of 2025 sales derived from outside the U.S., Fortive is vulnerable to regional conflicts, trade barriers, tariffs, and currency exchange rate volatility that can negatively impact reported financial results.
- Technological Innovation: Failure to accurately predict customer needs or develop new products in industries characterized by rapid technological change could lead to product obsolescence and wasted research and development investment.
- Cybersecurity and Data Privacy: Breaches of information technology systems—whether managed internally or by third parties—can result in the exfiltration of sensitive data, operational disruption, and significant remediation costs.
2. Company-Specific Risks
- Leadership Transition: Fortive transitioned its Chief Executive Officer, Chief Financial Officer, and Chief People Officer roles in 2025 and early 2026, creating risks related to the successful management of these transitions and the retention of key talent.
- Capital Allocation Strategy: The "Fortive Accelerated" strategy requires disciplined capital allocation; failure to identify or successfully integrate acquisitions, or the inability to achieve anticipated synergies, could lead to impairment charges on goodwill and intangible assets.
- Separation Liabilities: Fortive remains subject to potential indemnification obligations to Vontier and Ralliant under their respective separation agreements, which could materially affect cash flows and financial condition.
- Artificial Intelligence Integration: The use of AI in products and operations introduces emerging risks regarding intellectual property infringement, data privacy, and potential reputational harm if implementation is controversial or ineffective.
3. Regulatory/Legal Risks
- Government Contracting: Approximately $417 million of 2025 sales were made to the U.S. federal government; these contracts are subject to specific statutes, potential termination for convenience, and audits that could result in fines or the requirement to pay back amounts received.
- Environmental and Safety Compliance: Operations are subject to extensive environmental, health, and safety laws; failure to comply can result in civil or criminal penalties, and Fortive may incur significant costs related to remedial efforts for past or current waste disposal practices.
- Medical Device Regulation: Certain products are regulated by the FDA and comparable international agencies; failure to obtain or maintain clearances can lead to recalls, seizures, or the total shutdown of production facilities.
- Anti-Bribery Laws: Fortive is subject to the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act; improper conduct by employees or agents could lead to substantial monetary penalties and damage to Fortive's reputation.
4. Financial Impact Map
Global Economic Conditions → Revenue and Operating Profit → Reduced demand and increased price competition directly impact top-line growth and margins. Supply Chain Disruptions → Inventory and Cost of Goods Sold → Inability to adjust purchase commitments leads to excess/obsolete inventory charges and higher production costs. International Operations → Net Income → Currency translation effects and tariff-related costs impact the bottom line for non-U.S. business segments. Goodwill and Intangible Assets → Balance Sheet (Assets) → Failure to realize the value of acquired businesses or market capitalization declines may trigger impairment charges against the $9.5 billion carrying value. Debt Obligations → Cash Flow from Operations → Approximately $3.2 billion in long-term debt requires significant cash flow for interest and principal payments, limiting funds available for other strategic purposes.
Recent Filings
| Form | Filed | Period |
|---|---|---|
| 10-K | Feb 2026 | Dec 2025 |
| 8-K | Feb 2026 | — |
| 10-Q | Oct 2025 | Sep 2025 |
| 14A | Apr 2025 | — |