Fortive surges 9% on Q4 earnings beat, confident 2026 outlook
Industrial technology company exceeds analyst expectations with $2.90-$3.00 EPS guidance for fiscal year 2026
Fortive shares surged 9.3% to $59.41 in Wednesday trading, adding approximately $1.5 billion to the diversified industrial technology company's market capitalization, after fourth-quarter earnings surpassed analyst expectations and management issued optimistic guidance for fiscal 2026.
The Everett, Washington-based company reported fourth-quarter revenue of $1.12 billion, marking a 4.6% year-over-year increase and exceeding the $1.09 billion consensus estimate by 2.7%. Non-GAAP adjusted earnings per share of $0.90 topped analyst projections of $0.84 by 7.4%, while adjusted EBITDA reached $357.9 million compared to estimates of $354.8 million.
"Our strong fourth-quarter performance, coupled with solid core revenue growth of 3.3%, demonstrates the resilience of our business model and the strength of our portfolio across automation, sensing, and software solutions," the company stated in its earnings announcement.
For the full year 2025, Fortive delivered adjusted EPS of $2.71 on revenue of $4.16 billion, exceeding the high end of its previous guidance range. The performance was driven largely by the Intelligent Operating Solutions (IOS) segment, which posted revenue growth of 5.3% to $770 million with adjusted EBITDA margin expanding 80 basis points to 37.4%.
The Advanced Healthcare Solutions (AHS) segment showed more modest growth, with revenue increasing 3.2% to $353 million, though adjusted EBITDA margin contracted 150 basis points to 26.0%, reflecting ongoing challenges in the healthcare technology market.
Looking ahead, Fortive initiated full-year 2026 adjusted diluted EPS guidance in the range of $2.90 to $3.00. The midpoint of $2.95 represents approximately 3.8% growth above previous analyst consensus estimates of $2.84 to $2.87, signaling management's confidence in continued operational improvements and market expansion opportunities.
The company did not provide specific revenue guidance for 2026 in its initial release, a decision that some analysts noted reflects ongoing macroeconomic uncertainty across industrial end markets. However, the positive earnings trajectory suggests Fortive is successfully executing on its strategy to leverage automation and sensing technologies that drive productivity and operational efficiency for industrial customers worldwide.
The strong results and upbeat outlook prompted positive market reaction, with shares rallying sharply in regular session trading. Before the earnings release, Wall Street maintained a consensus "Hold" rating on Fortive with an average target price of $57.77, based on coverage from 15 firms including 2 Buy recommendations, 11 Hold ratings, and 2 Sell ratings. Wednesday's price action pushes the stock above the prior consensus target.
Analyst sentiment had been gradually improving leading into the report, with InvestingPro data showing 11 positive EPS revisions versus just 3 negative revisions in the 90 days preceding the earnings announcement. The company's financial health score was rated as "good performance," reflecting its balanced approach to growth and capital allocation.
Fortive, which operates through a portfolio of industrial technology businesses focused on professional instrumentation and industrial technologies, has been navigating a complex operating environment characterized by mixed demand across end markets. The company's diversified business model and focus on recurring revenue streams from software and services have provided some resilience against cyclical pressures in traditional industrial markets.
The stock's rally on Wednesday extends its year-to-date performance and brings shares closer to their 52-week high of $62.42, set in November 2025. At current levels, Fortive trades at a trailing price-to-earnings ratio of 21.14 times, with a forward multiple of 18.80 times based on the midpoint of 2026 guidance. The company maintains a modest dividend yield of 0.57%, having paid $0.30 per share in its most recent distribution.
Investors will be watching for additional color on Fortive's strategic priorities and growth initiatives when management hosts its quarterly earnings call later today, particularly around opportunities in the Intelligent Operating Solutions segment and efforts to stabilize margins in the Advanced Healthcare Solutions business.