Otis Worldwide Corp (OTIS) Stock Analysis
Otis Worldwide Corp (OTIS) Stock Analysis
Analysis from 10-Q filed 2025-10-30. Data as of Q4 2025.
Overall Grade: F (Concerning)
Otis Worldwide Corp faces challenges in financial performance that warrant careful analysis.
| Metric | Value | Context |
|---|---|---|
| ROIC | 104.5% | Above industry average |
| FCF Margin | 10.0% | Healthy cash flow |
| Debt/Equity | -1.5x | Conservative leverage |
Investment Thesis: Strong return on invested capital of 104.5% suggests durable competitive advantages and efficient capital allocation.
Explore Otis Worldwide Corp: Earnings History | Filing Intelligence | ROIC Analysis
Profitability: Otis Worldwide Corp earns 104.5% ROIC, Top 5% in Technology
Otis Worldwide Corp's trailing-twelve-month ROIC of 104.5% ranks Top 5% in Technology companies (sector median: 5.2%), driven by NOPAT margin of 11.1% combined with asset turnover of 1.3x. Source: 10-Q filed 2025-10-30. Gross margin of 100.0% with operating margin at 14.8% reflects strong pricing power.
| Metric | OTIS | Rating | Context |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 104.5% | Excellent | Above sector median of 5.2% |
| Return on Equity (ROE) | -26.3% | Red flag | Moderate equity returns |
| Gross Margin | 100.0% | Excellent | Strong pricing power |
| Operating Margin | 14.8% | Good | Moderate operational efficiency |
Cash Flow: Otis Worldwide Corp generates $1.4B FCF at 10.0% margin, positive NaN/8 quarters
Otis Worldwide Corp generated $1.4B in free cash flow (TTM), a 10.0% FCF margin, a margin that ranks Top 50% in Technology. Operating cash flow exceeds net income by 1.2x, indicating high earnings quality. FCF was positive in N/A of the last 8 quarters. Source: 10-Q filed 2025-10-30.
| Metric | OTIS | Rating | Context |
|---|---|---|---|
| Free Cash Flow Margin | 10.0% | Good | Healthy cash generation |
| Free Cash Flow (TTM) | $1.4B | Good | Positive cash generation |
| OCF/Net Income | 1.2x | Excellent | High earnings quality |
| FCF Consistency (8Q) | N/A | Warning | Variable cash flow |
Balance Sheet: Otis Worldwide Corp at -1.5x leverage
Otis Worldwide Corp's debt-to-equity ratio of -1.5x reflects conservative leverage. Total debt of $8.0B offset by $1.1B in cash. Source: 10-Q filed 2025-10-30.
| Metric | OTIS | Rating | Context |
|---|---|---|---|
| Debt to Equity | -1.5x | Excellent | Conservative capital structure |
| Net Cash Position | $-6.9B | Warning | Net debt position |
Valuation: Otis Worldwide Corp trades at 24.8x earnings
Otis Worldwide Corp trades at a P/E of 24.8x. Free cash flow yield of 4.2% reflects market expectations for growth.
| Metric | OTIS | Rating | Context |
|---|---|---|---|
| P/E Ratio | 24.8x | Adequate | Premium valuation |
| EV/Sales | 3.4x | Good | Growth premium priced in |
| FCF Yield | 4.2% | Good | Lower cash yield |
| Dividend Yield | 1.9% | Adequate | Growth focus over income |
Capital Allocation: Otis Worldwide Corp returns 4.2% shareholder yield
Otis Worldwide Corp's total shareholder yield is 4.2% (dividends 1.9% + buybacks 2.4%). Source: 10-Q filed 2025-10-30.
| Metric | OTIS | Rating | Context |
|---|---|---|---|
| Total Shareholder Yield | 4.2% | Good | Dividend + buyback yield combined |
| Buyback Yield | 2.4% | Adequate | Active share repurchases |
| Total Capital Returned (TTM) | $1.5B | Good | Dividends + buybacks returned to shareholders |
Sector Rankings
| Metric | Value | Percentile | vs Median |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 104.5% | Top 5% | 20.0x above |
| Free Cash Flow Margin | 10.0% | Top 50% | 1.1x above |
| Gross Margin | 100.0% | Top 10% | 1.9x above |
| Operating Margin | 14.8% | Top 50% | 3.1x above |
| Return on Equity (ROE) | -26.3% | Top 50% | -5.4x below |
| P/E Ratio | 24.8x | N/A | - |
Financial Scorecard
| Metric | OTIS | Rating | Sector Context |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 104.5% | Excellent | Top 5% of sector (median: 5.2%) |
| Free Cash Flow Margin | 10.0% | Good | Top 50% of sector (median: 9.1%) |
| Gross Margin | 100.0% | Excellent | Top 10% of sector (median: 51.8%) |
| Debt to Equity Ratio | -147.6% | Excellent | Conservative capital structure |
| P/E Ratio (Price-to-Earnings) | 24.8x | Adequate | Fair value |
| Free Cash Flow Yield | 4.2% | Adequate | Moderate yield |
Frequently Asked Questions
Q: What is Otis Worldwide Corp's Return on Invested Capital (ROIC)?
Otis Worldwide Corp (OTIS) has a trailing twelve-month Return on Invested Capital (ROIC) of 104.5%. This compares above the sector median of 5.2%. An ROIC above 20% indicates exceptional capital efficiency and strong competitive advantages.
Q: What is Otis Worldwide Corp's Free Cash Flow Margin?
Otis Worldwide Corp (OTIS) has a free cash flow margin of 10.0%, generating $1.4 billion in free cash flow over the trailing twelve months. A FCF margin between 10-20% represents healthy cash generation for most industries.
Q: Is Otis Worldwide Corp stock overvalued or undervalued?
Otis Worldwide Corp (OTIS) trades at a P/E ratio of 24.8x, which is above the sector median of N/A. The EV/Sales multiple is 3.4x. Free cash flow yield is 4.2%, which is in line with market averages.
Q: Does Otis Worldwide Corp pay a dividend?
Otis Worldwide Corp (OTIS) currently pays a dividend yield of 1.9%. Including share buybacks, the total shareholder yield is 4.2%. The relatively low yield suggests the company prioritizes growth reinvestment over income distribution.
Q: What is Otis Worldwide Corp's revenue and earnings growth?
Otis Worldwide Corp (OTIS) grew revenue by 1.2% year-over-year. Earnings per share decreased by 13.8% compared to the prior year. Modest growth indicates a mature business with stable demand.
Q: Is Otis Worldwide Corp buying back stock?
Otis Worldwide Corp (OTIS) repurchased $809.0 million of stock over the trailing twelve months. This represents a buyback yield of 2.4%.
Q: How does Otis Worldwide Corp compare to competitors in Technology?
Compared to other companies in Technology, Otis Worldwide Corp (OTIS) shows: ROIC of 104.5% is above the sector median of 5.2% (Top 0%). FCF margin of 10.0% exceeds the sector median of 9.1% (Top 48% of sector). Gross margin at 100.0% is 48.2 percentage points higher than sector peers. These rankings are based on MetricDuck's analysis of all Technology companies with available SEC filings.
Q: What warning signs should I watch for with Otis Worldwide Corp?
Otis Worldwide Corp (OTIS) shows no major financial warning signs based on current metrics. However, investors should always monitor: 1) Margin compression trends, 2) Cash flow consistency, 3) Debt levels relative to cash generation, and 4) Changes in competitive positioning.
Data Source: Data sourced from 10-Q filed 2025-10-30. TTM metrics as of Q4 2025.
Methodology: Financial metrics calculated from SEC 10-K and 10-Q filings using standardized formulas. Sector comparisons use peer group based on SIC code.
Scope: This analysis covers SEC filing fundamentals — profitability, cash flow, balance sheet, and valuation metrics. For analyst estimates and price targets, consult sell-side research.
This analysis is for informational purposes only and does not constitute investment advice.