Stock of the Day

July 8, 2020

Fortive (FTV)

$80.03
-$1.81 (-2.2%)
Market Cap: $28.39B

About Fortive

Fortive Corporation designs, develops, manufactures, and services professional and engineered products, software, and services in the United States, China, and internationally. It operates in three segments: Intelligent Operating Solutions, Precision Technologies, and Advanced Healthcare Solutions. The Intelligent Operating Solutions segment provides advanced instrumentation, software, and services, including electrical test and measurement, facility and asset lifecycle software applications, and connected worker safety and compliance solutions for manufacturing, process industries, healthcare, utilities and power, communications and electronics, and other industries. This segment markets its products and services under the ACCRUENT, FLUKE, GORDIAN, INDUSTRIAL SCIENTIFIC, INTELEX, PRUFTECHNIK, and SERVICECHANNEL brands. The Precision Technologies segment offers electrical test and measurement, sensing and material technologies for industrial, power and energy, automotive, medical equipment, food and beverage, aerospace and defense, semiconductor, and other general industries under the ANDERSON-NEGELE, GEMS, SETRA, HENGSTLER-DYNAPAR, QUALITROL, PACIFIC SCIENTIFIC, KEITHLEY, and TEKTRONIX brand names. The Advanced Healthcare Solutions segment provides critical workflow solutions comprising instrument sterilization, instrument tracking, design and manufacture of cell therapy equipment, biomedical test tools, radiation detection and safety monitoring, and end-to-end clinical productivity software and solutions under the ASP, CENSIS, CENSITRAC, EVOTECH, FLUKE BIOMEDICAL, INVETECH, LANDAUER, PROVATION, RAYSAFE, and STERRAD brands. Fortive Corporation was incorporated in 2015 and is headquartered in Everett, Washington.

Fortive Bull Case

Here are some ways that investors could benefit from investing in Fortive Co.:

  • Fortive Co. recently reported earnings per share of $1.17, exceeding analysts' expectations of $1.12, indicating strong financial performance and effective management.
  • The stock is currently trading at $81.68, which is within a reasonable range compared to its twelve-month high of $87.10, suggesting potential for growth.
  • Fortive Co. has a solid return on equity of 13.15%, reflecting efficient use of shareholders' equity to generate profits.
  • The company maintains a low debt-to-equity ratio of 0.33, indicating a conservative approach to leveraging, which can be attractive to risk-averse investors.
  • With a consensus rating of "Moderate Buy" from analysts and a target price of $87.64, there is optimism about the stock's future performance.

Fortive Bear Case

Investors should be bearish about investing in Fortive Co. for these reasons:

  • Despite recent earnings growth, the company's net margin of 13.36% is relatively modest, which may limit profitability compared to competitors.
  • The quick ratio of 0.91 suggests that Fortive Co. may face challenges in meeting short-term liabilities without selling inventory, indicating potential liquidity concerns.
  • Recent downgrades from analysts, including a cut from "buy" to "hold" by StockNews.com, may signal a lack of confidence in the stock's near-term performance.
  • The dividend yield of 0.39% is relatively low, which may not attract income-focused investors looking for higher returns from dividends.
  • Market volatility, as indicated by a beta of 1.15, suggests that Fortive Co.'s stock price may be more susceptible to fluctuations compared to the overall market.

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