Margins Support a Full Valuation
Slightly overvaluedDCF
Equity analysis

Otis Worldwide Corp (OTIS) Margins Support a Full Valuation

Jun 2, 2026•Equity Analysis

Is the price already paying for more than modest growth?

Trailing P/E
17.97
Price
69.34
ROE
14.92
Gross Margin
30.39

How Does This Elevator Business Operate?

Otis Worldwide makes and services elevators, escalators, and moving walkways. The business spans new equipment installations as well as ongoing service and modernization work tied to the installed base. Its offering centers on keeping vertical-transport systems operating reliably, with maintenance and upgrades alongside new builds. With a market value around USD 26.6 billion, it sits in the large-cap industrial space.

Are Margins and Growth Holding Steady?

Fundamentals

For 2025 results reported in USD, revenue was about USD 14.4 billion and net income was roughly USD 1.9 billion, alongside 1.2% year-over-year revenue growth. Profitability measures over the trailing period show a 30.39% gross margin, a 15.44% operating margin, and a 10.11% net profit margin.

Reinvestment was modest in absolute terms, with about USD 175 million of depreciation and amortization and USD 152 million of capital spending. The balance sheet held around USD 1.1 billion of cash against USD 2.1 billion of total debt.

Is the Market Pricing in Steady Growth?

DCF / Multiples

At USD 69.34, the stock trades above the central discounted cash flow estimate of USD 55.54, closer to the upper-end value of USD 74.06 than to the lower scenario of USD 37.21. Headline multiples are consistent with that positioning, with a 17.97 P/E and 13.80 EV/EBITDA indicating a valuation near the DCF midpoint.

Valuation Leaves Little Cushion

Takeaway

The current price leans on steady growth without heavy reinvestment. That works only if margins and earnings stay resilient. If growth stays muted, today’s valuation has little slack. Any hit to profitability would matter quickly.

⚠
Disclaimer
This analysis is for informational purposes only and does not constitute investment advice.
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INDEX
VDIX
ValueDetect Intrinsic eXpectations Index
Overvalued market
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VDIX measures whether the market is expensive or cheap relative to intrinsic value. For each company, ValueDetect estimates fair value using a discounted cash flow (DCF) model, then compares it with the current share price to derive a RiskRatio. These signals are capped, weighted by market capitalization, and aggregated into a single market-wide score.

Current score-0.82Negative = market trades above fair value
1-day move-0.13Rising score = improving valuation conditions
7-day average-0.68Smoothed market valuation signal
Latest observation03 June 2026The latest weighted reading suggests that the market is trading above DCF-based intrinsic value in aggregate.
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