Industrial - Machinery · NYSE
Current Price
$76.60
Intrinsic Value
Use the calculator below to estimate
Run a full DCF analysis on Otis Worldwide Corporation with auto-filled fundamentals, adjustable assumptions, and sensitivity heatmap.
Otis Worldwide Corporation manufactures, installs, and services elevators and escalators in the United States, China, and internationally. The company operates in two segments, New Equipment and Service. The New Equipment segment designs, manufactures, sells, and installs a range of passenger and freight elevators, as well as escalators and moving walkways for residential and commercial buildings, and infrastructure projects. The Service segment performs maintenance and repair services, as well as modernization services to upgrade elevators and escalators. It had a network of approximately 34,000 service mechanics operating approximately 1,400 branches and offices. The company was founded in 1853 and is headquartered in Farmington, Connecticut.
ROIC (TTM)
45.6%
ROE (TTM)
-27.1%
FCF Yield
5.67%
Based on trailing twelve-month data, OTIS shows a free cash flow per share of N/A and a ROIC of 45.6%, key inputs for stock valuation using the DCF method. The P/FCF ratio of N/A and FCF yield of 5.67% are important context metrics when evaluating OTIS's stock valuation relative to peers.
The intrinsic value of OTIS depends on assumptions about future growth rate, discount rate (WACC), and terminal value. A DCF model discounts projected free cash flows back to present value — small changes in WACC can shift the estimate by 20% or more, which is why sensitivity analysis is essential.
Whether OTIS is undervalued depends on comparing the DCF-derived intrinsic value to the current market price of $76.60. A positive margin of safety (intrinsic value above market price) suggests potential undervaluation, but the degree of confidence depends on the reliability of your growth and discount rate assumptions.
To perform a DCF valuation on Otis Worldwide Corporation: (1) Start with the trailing free cash flow per share as the base, (2) project future FCF growth over 5-10 years based on Industrial - Machinery industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting OTIS's risk profile, and (4) add a terminal value for cash flows beyond the projection period.
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For Otis Worldwide Corporation, this means projecting how much free cash flow the Industrial - Machinery will produce over the next 5-10 years, then discounting those amounts to today's dollars. OTIS's ROIC of 45.6% indicates strong capital efficiency, which supports higher growth assumptions in the DCF model.
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For OTIS, the capital structure and equity risk premium determine WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%.
