# Otis Worldwide (OTIS.US)

Canonical: https://gigainvestors.com/s/OTIS

Analysis as of: 2026-10-16T07:30:59.747Z. Financial observations: FY2017–FY2026.

Listing currency: USD. Reporting currency: USD.

## Verdict

A wonderful business at too high a price

Quality tests for Buy: pass (profit record: pass; earnings resilience is evidence only). Published buy qualification: no.

Share price: $70.40 per share; close as of 2026-10-15.

Estimated value: low $43.10 per share, central $48.85 per share, high $56.51 per share. Buy at or below the central value $48.85 per share. Valuation as of 2026-10-16T07:30:59.747Z; scenarios are not confidence intervals.

Expected annual return: 7.8% at the stated quote. About 7.8% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; US 10-year bond 5.1% + 4 points).

## Checklist

### understandable: pass

- 2 revenue declines in the last 10 years (informational)

- Financial history: 10 years

- Years with declining revenue: 2

- Years with a net loss: 0

- Operating margin variation: 0.05×

Chart: Operating margin; fiscal year observations.

- FY2017: 0.16×

- FY2018: 0.14×

- FY2019: 0.14×

- FY2020: 0.13×

- FY2021: 0.15×

- FY2022: 0.15×

- FY2023: 0.15×

- FY2024: 0.14×

- FY2025: 0.15×

- LTM to Jun 2026: 0.15×

### moat: pass

- Years with nonpositive invested capital use equity plus debt and leases; positive earnings with no positive capital are shown above 100%.

- ROIC, median of available years: 71.2%

- ROIC, second-lowest year: 54.5%

- Typical minus recent gross margin: -0.6 pp

- Typical gross margin (annual median): 29.6%

- Recent gross margin (lower of latest and 3-year median): 30.2%

- Years with nonpositive capital: 6

- Capital spending / revenue: 1.1%

- ROIC including acquisitions, ten-year median: 93.3%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2017: 62.8%

- FY2018: 74.7%

- FY2019: 54.5%

- FY2020: 43.5%

- FY2021: >100%

- FY2022: 63.0%

- FY2023: 67.7%

- FY2024: >100%

- FY2025: >100%

- LTM to Jun 2026: >100%

### economics: pass

- Owner earnings / net income, 5-yr: 1.03×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: $7.4B

- Net income, five-year total: $7.2B

- Return on incremental invested capital: 68.3%

- Working capital / revenue, annual change: 0.2 pp

- Working capital / revenue, change between three-year averages: 0.9 pp

- Working capital / revenue, final three-year average: 20.8%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2022: 1.06×

- FY2023: 1.04×

- FY2024: 1.03×

- FY2025: 1.02×

- LTM to Jun 2026: 1.01×

### management: pass

- potential debt-funded buybacks (informational)

- buybacks leaned toward cheaper years (informational)

- ROIC first 3 years vs last 3 years: 62.8% vs 283.0%

- Per-share earnings: 2.42 to 3.50 (three-year endpoint medians)

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 5-year annual growth: -1.9%

- Diluted shares, 5-year annual growth: -1.9%

- Per-share value growth: 6.4%

- Per-share value change: $1.08

- Per-share value, starting three-year median: $2.42

- Per-share value, ending three-year median: $3.50

- Buybacks concentrated in cheaper years (correlation): 0.70

- Average buyback yield: 3.3%

- Buyback history: 5 years

- Debt-funded buybacks: Yes

- ROIC, first three-year median: 62.8%

- ROIC, last three-year median: >100%

Chart: Earnings per share; fiscal year observations.

- FY2017: $1.46

- FY2018: $2.42

- FY2019: $2.58

- FY2020: $2.08

- FY2021: $2.89

- FY2022: $2.96

- FY2023: $3.39

- FY2024: $4.07

- FY2025: $3.50

### accounting: pass

- restructuring or one-time charges in at least three of five years

- Sloan accruals: -2.0%

- Receivables to sales index (DSRI): 1.05×

- Restructuring years, last five: 5

- Stock compensation / operating cash flow: 5.0%

- Earnings backed by cash: Yes

- Operating cash / earnings: 1.15×

- Accounting red flags: 1

Chart: Sloan accruals; fiscal year observations.

- FY2017: -9.0%

- FY2018: -5.5%

- FY2019: -3.6%

- FY2020: -5.4%

- FY2021: -4.1%

- FY2022: -3.1%

- FY2023: -2.2%

- FY2024: 0.7%

- FY2025: -2.0%

## Holders

- [David Hoeft](https://gigainvestors.com/DAC): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Thomas Gayner](https://gigainvestors.com/MKL): tracked 13F investor; follow the investor page for holding quarter and amounts.

## Price story

Down 32% since Sep 2024 · "New Equipment operating profit decreased $(52) million including foreign exchange headwinds of $(8) million." (SEC filing, Feb 2026) · sales +3.3%

Story as of 2026-10-16T09:59:21.179Z; price observation 2026-10-15.

Price needs cash profits to grow 5.6% a year for ten years

- 2025-04-24: Otis Worldwide (NYSE:OTIS) Reports Lower Earnings, Updates 2025 Revenue Guidance ([finance.yahoo.com](https://finance.yahoo.com/news/otis-worldwide-nyse-otis-reports-175547646.html))

- 2025-07-23: Otis Lowers Sales Outlook on Continued Challenges in China ([finance.yahoo.com](https://finance.yahoo.com/m/d317de58-f266-367c-bd45-12cd12befeaa/otis-lowers-sales-outlook-on.html))

- 2025-09-08: Otis Worldwide (OTIS) Secures Major Contract to Install 265 Elevators in Egypt ([finance.yahoo.com](https://finance.yahoo.com/news/otis-worldwide-otis-secures-major-172017847.html))

- 2025-10-30: Otis Worldwide: Evaluating Valuation Following Strong Q3 Results and Raised Earnings Guidance ([finance.yahoo.com](https://finance.yahoo.com/news/otis-worldwide-evaluating-valuation-following-101726740.html))

- 2026-01-28: Otis Worldwide Q4 Earnings Meet Estimates, Sales Miss, Stock Down ([finance.yahoo.com](https://finance.yahoo.com/news/otis-worldwide-q4-earnings-meet-172800891.html))

### Sales · FY2025–2026

sales +3.3%; source https://www.sec.gov/Archives/edgar/data/1781335/000178133526000011/otis-20251231.htm; observed 2026-02-05.

- FY2017: $12B 

- FY2018: $13B 

- FY2019: $13B 

- FY2020: $13B 

- FY2021: $14B 

- FY2022: $14B 

- FY2023: $14B 

- FY2024: $14B 

- FY2025: $14B 

- FY2026: $15B 

### Gross margin · FY2026

gross margin 30.2%; source https://www.sec.gov/Archives/edgar/data/1781335/000178133526000011/otis-20251231.htm; observed 2026-02-05.

- FY2017: 30.0% 

- FY2018: 28.9% 

- FY2019: 29.2% 

- FY2020: 29.6% 

- FY2021: 29.3% 

- FY2022: 28.6% 

- FY2023: 29.5% 

- FY2024: 29.9% 

- FY2025: 30.3% 

- FY2026: 30.2% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in specialty industrial machinery; annual sales are USD 14.4 billion.

- Source: https://www.sec.gov/Archives/edgar/data/1781335/000178133526000011/otis-20251231.htm (filed 2026-02-05); FY2025: revenue 14431000000; grossProfit 4370000000; margin = grossProfit / revenue.

### Why customers stay

Margins ranged from 29.5% to 30.3% during 2023–25; it earns 71.2% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-05); FY2023: grossProfit / revenue = 29.5%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-05); FY2024: grossProfit / revenue = 29.9%.

- Source: https://www.sec.gov/Archives/edgar/data/1781335/000178133526000011/otis-20251231.htm (filed 2026-02-05); FY2025: grossProfit / revenue = 30.3%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-05); 10-year return on capital observations [[2017,0.6283551967709384],[2018,0.7473370927318296],[2019,0.5452545748505694],[2020,0.4347081553741882],[2021,1.6360618338413642],[2022,0.6299745128929451],[2023,0.6765937866551456],[2024,37.12254515214193],[2025,2.8301817107401392],[2026,3.547011098519739]]; median 0.7119654396934876. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Can it raise prices

Kept about a 29% gross margin through 2022 cost inflation.

- Source: https://www.sec.gov/Archives/edgar/data/1781335/000178133526000011/otis-20251231.htm (filed 2026-02-05); Gross margin observations: [[2021,0.2932577982934676],[2022,0.2864450127877238],[2023,0.29509465831515236]]; range within 2 percentage points.

### Where the cash goes

Reinvests 7.7% of cash earnings; earns 68.3% on new investment.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-05); FY2017: growth capex 0; upkeep 133000000; owner earnings 680000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-05); FY2018: growth capex 0; upkeep 172000000; cash acquisitions 50000000; owner earnings 1067000000. Growth capex plus acquisitions / owner earnings = 0.046860356138706656.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-05); FY2019: growth capex 0; upkeep 145000000; cash acquisitions 47000000; owner earnings 1151000000. Growth capex plus acquisitions / owner earnings = 0.04083405734144222.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-05); FY2020: growth capex 0; upkeep 183000000; cash acquisitions 53000000; owner earnings 914000000. Growth capex plus acquisitions / owner earnings = 0.05798687089715536.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-05); FY2021: growth capex 0; upkeep 156000000; cash acquisitions 80000000; owner earnings 1293000000. Growth capex plus acquisitions / owner earnings = 0.061871616395978345.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-05); FY2022: growth capex 0; upkeep 115000000; cash acquisitions 46000000; owner earnings 1329000000. Growth capex plus acquisitions / owner earnings = 0.0346124905944319.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-05); FY2023: growth capex 0; upkeep 138000000; cash acquisitions 36000000; owner earnings 1461000000. Growth capex plus acquisitions / owner earnings = 0.024640657084188913.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-05); FY2024: growth capex 0; upkeep 126000000; cash acquisitions 87000000; owner earnings 1700000000. Growth capex plus acquisitions / owner earnings = 0.051176470588235295.

- Source: https://www.sec.gov/Archives/edgar/data/1781335/000178133526000011/otis-20251231.htm (filed 2026-02-05); FY2025: growth capex 0; upkeep 152000000; cash acquisitions 109000000; owner earnings 1407000000. Growth capex plus acquisitions / owner earnings = 0.07746979388770434.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-05); Incremental return on capital 0.6825068079411167, from the economics test's unchanged annual inputs.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-05); Dividend observations: [[2017,260000000],[2018,260000000],[2019,260000000],[2020,260000000],[2021,393000000],[2022,465000000],[2023,539000000],[2024,606000000],[2025,647000000]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://www.sec.gov/Archives/edgar/data/1781335/000178133526000011/otis-20251231.htm (filed 2026-02-05); FY2025: cash repurchases 809000000 USD.

### Are managers owners

Insiders own 0.1% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); OTIS.US SharesStats.PercentInsiders = 0.14300000000000002 percentage points; cache date 2026-10-16.

### What could break it

"Our debt levels and related debt service obligations could have negative consequences" (SEC filing, Feb 2026)

- Source: https://www.sec.gov/Archives/edgar/data/1781335/000178133526000011/otis-20251231.htm (filed 2026-02-05); Our debt levels and related debt service obligations could have negative consequences

### What the price says

The price assumes cash profits grow 5.6% yearly over ten years.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-05); Ten-year compound average after fade. Initial solved rate 0.06704298963592828. Price 70.4; FX 1; discount 0.1; same standard ten-year fade to terminal 0.03.  Closing-price date 2026-10-15.

## Monthly share-price history (USD per share)

- 2020-04: $50.91 per share

- 2020-05: $52.65 per share

- 2020-06: $56.86 per share

- 2020-07: $62.74 per share

- 2020-08: $62.90 per share

- 2020-09: $62.42 per share

- 2020-10: $61.28 per share

- 2020-11: $66.94 per share

- 2020-12: $67.55 per share

- 2021-01: $64.65 per share

- 2021-02: $63.71 per share

- 2021-03: $68.45 per share

- 2021-04: $77.87 per share

- 2021-05: $78.33 per share

- 2021-06: $81.77 per share

- 2021-07: $89.55 per share

- 2021-08: $92.22 per share

- 2021-09: $82.28 per share

- 2021-10: $80.31 per share

- 2021-11: $80.40 per share

- 2021-12: $87.07 per share

- 2022-01: $85.43 per share

- 2022-02: $78.33 per share

- 2022-03: $76.95 per share

- 2022-04: $72.84 per share

- 2022-05: $74.40 per share

- 2022-06: $70.67 per share

- 2022-07: $78.17 per share

- 2022-08: $72.22 per share

- 2022-09: $63.80 per share

- 2022-10: $70.64 per share

- 2022-11: $78.09 per share

- 2022-12: $78.31 per share

- 2023-01: $82.23 per share

- 2023-02: $84.62 per share

- 2023-03: $84.40 per share

- 2023-04: $85.30 per share

- 2023-05: $79.51 per share

- 2023-06: $89.01 per share

- 2023-07: $90.96 per share

- 2023-08: $85.55 per share

- 2023-09: $80.31 per share

- 2023-10: $77.21 per share

- 2023-11: $85.79 per share

- 2023-12: $89.47 per share

- 2024-01: $88.44 per share

- 2024-02: $95.30 per share

- 2024-03: $99.27 per share

- 2024-04: $91.20 per share

- 2024-05: $99.20 per share

- 2024-06: $96.26 per share

- 2024-07: $94.50 per share

- 2024-08: $94.69 per share

- 2024-09: $103.94 per share

- 2024-10: $98.20 per share

- 2024-11: $102.98 per share

- 2024-12: $92.61 per share

- 2025-01: $95.42 per share

- 2025-02: $99.78 per share

- 2025-03: $103.20 per share

- 2025-04: $96.27 per share

- 2025-05: $95.35 per share

- 2025-06: $99.02 per share

- 2025-07: $85.69 per share

- 2025-08: $86.38 per share

- 2025-09: $91.43 per share

- 2025-10: $92.76 per share

- 2025-11: $88.85 per share

- 2025-12: $87.35 per share

- 2026-01: $85.42 per share

- 2026-02: $92.56 per share

- 2026-03: $77.08 per share

- 2026-04: $77.88 per share

- 2026-05: $70.84 per share

- 2026-06: $71.60 per share

- 2026-07: $71.95 per share

- 2026-08: $71.13 per share

- 2026-09: $64.32 per share

- 2026-10: $70.40 per share

## Annual estimated value (USD per share)

- FY2021: low $32.89 per share, central $37.02 per share, high $42.51 per share

- FY2022: low $33.19 per share, central $37.47 per share, high $43.16 per share

- FY2023: low $36.26 per share, central $40.93 per share, high $47.15 per share

- FY2024: low $42.41 per share, central $47.58 per share, high $54.45 per share

- FY2025: low $40.99 per share, central $46.36 per share, high $53.51 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

## Sources

[Original 10-K filing](https://www.sec.gov/Archives/edgar/data/1781335/000178133526000011/otis-20251231.htm); period 2025-12-31, filed 2026-02-05.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.