Compare moats
Up to three covered companies, band by band. Every call is a curated editorial judgment, never a disclosed figure — and every band carries its cited basis.
| Fabrinet | Tempus AI | Eaton | |
|---|---|---|---|
| Moat rating | narrow The FY2026 10-K grounds a real but bounded defence. On the defence side: Item 1 states that in the manufacturing services market "there are significant barriers to entry in our existing and target markets, including lengthy sales cycles, the need to demonstrate complex precision optical and electro-mechanical engineering and manufacturing capabilities to a prospective customer and the ability to protect a customer's intellectual property," and that qualification of a program "may take three to six months or longer to complete." On the limiting side, the same filing shows the protection does not reach price: gross profit was 12.0% of revenues in FY2026 against 12.1% in FY2025 and 12.4% in FY2024 even as revenue rose 35.7% to $4.64 billion, four customers each exceeded 10% of revenue (Cisco 19.9%, NVIDIA 16.3%, Nokia 10.7%, Amazon 10.5%), and "reliance on a small number of customers gives those customers substantial purchasing power and leverage in negotiating contracts with us." Sales are made on "individual purchase orders that have short lead times and are subject to revision or cancellation," so the qualified program is sticky while the contract is not. | narrow The FY2025 10-K documents a real asset: a network "connected in some way to more than 55% of all oncologists practicing in the United States" and "more than 65% of all academic medical centers," via "more than 700 unique data connections" across "more than 5,000 healthcare institution sites," with "broad data rights, including the rights to longitudinally updated data." Not eroding: revenue $693.4M to $1,271.8M (+83%), net loss narrowed from $705.8M to $245.0M. Not wide: still loss-making against "an accumulated deficit of $2.4 billion," with payment received on only "approximately 55% of our clinical oncology NGS tests and 50% of our hereditary tests." | wide The FY2025 10-K asserts a durable competitive position across essentially all of the revenue base: for Electrical Americas and Electrical Global it states 'Eaton has a strong competitive position in these segments and, with respect to many products, is considered among the market leaders'; it repeats that language verbatim for Aerospace ('industry-leading portfolio', 'considered among the market leaders'); and for Vehicle it states 'Eaton is considered among the market leaders in this segment.' That is a claimed leadership position in four of the five reported segments, on a base of $27.4 billion of 2025 revenue, ~97,000 employees and customers in 180 countries, from a company founded in 1911. The rating is tempered rather than lifted higher by the filing's own admissions - price is named among the principal methods of competition in the Electrical, Vehicle and eMobility segments, and the risk factors flag 'newly competitive market players' and that 'our positions may also be impacted by new entrants into our product or regional markets.' |
| Moat type | switching costs The 10-K locates the stickiness in qualification rather than in patents or scale. Customers "do not purchase our services until they qualify the services and satisfactorily complete factory audits and vendor evaluations"; qualification "may take three to six months or longer"; production is transferred "copy-exact: the setup of a production process identical to the one used by our customer"; and the filing's own experience of changing a component source is that it "resulted in our customers or their end customers requiring requalification and validation of components, a process that can often be lengthy and has negatively impacted the timing of our revenue" — the same friction a customer would face moving the program elsewhere. The filing rules out an IP-based moat itself: "Historically, patents have not played a significant role in the protection of our proprietary rights," and any process improvement developed for a customer's product is "immediately assigned to that customer." The Thailand cost base is a genuine advantage but the filing warns it is not durable on its own — "Wage increases may impact our ability to sustain our competitive advantage and may reduce our profit margin." | network effects The filing states the mechanism: "Each product line is designed to enable and enhance the other, thereby creating network effects." That is the filing's own characterisation, so the rating rests on corroborating facts: 700+ data connections across 5,000+ sites with longitudinal rights; roughly 801,000 tests in FY2025 (about 340,500 Oncology) feeding the records Insights licenses; Insights working with "19 of the 20 largest public pharmaceutical companies based on 2024 revenue" at "approximately 126%" net revenue retention. Intangibles fit less well: the xT PMA, ADLT status, Paige's clearance and five CAP/CLIA labs are real, but named peers hold comparable approvals. | switching costs The filing's own description of how it competes points at designed-in and qualified positions rather than IP or pure scale. In Aerospace the principal methods of competition are listed as 'total cost of ownership, product and system performance, quality, design engineering capabilities, and timely delivery' - price is conspicuously absent, and 20% of segment sales go to three large aircraft OEMs, i.e. platform-level content that is qualified in and hard to displace mid-programme. In the Electrical segments 'customer service and support' sits alongside performance and technology as a method of competition, and 22% of sales go to six large customers. Intangibles_ip is explicitly ruled out as the primary source by the company itself: 'management believes that the loss or expiration of any single intellectual property right would not in and of itself have a material effect on Eaton's consolidated financial statements or its business segments.' Scale is real but secondary - the filing notes raw materials are bought 'from many suppliers' and 'under normal circumstances, the Company has no difficulty obtaining its raw materials,' which reads as supply resilience rather than a cost advantage claim. |
| Leadership | co leader The leadership claim in the filing is the company's own qualitative assessment: "We believe we are a leader in manufacturing products for the optical communications market," and, on breadth of process technology, "Based on our experience with customers and our qualitative assessment of our capabilities, we believe we provide a broader array of process technologies to the optics industry than any other manufacturing services provider." The same Item 1 names a crowded field against it — "Benchmark Electronics, Inc., Celestica Inc., InnoLight Technology (Suzhou) Ltd., Jabil Inc., Sanmina Corporation, Venture Corporation Limited and Eoptolink Technology Inc., Ltd., as well as the internal manufacturing capabilities of our customers" — and no independent share ranking is given, so the record supports front-of-field standing but not sole primacy. | at parity The filing claims no ranked lead; its positional language is hedged, as in "one of the largest sequencers of cancer patients... in the United States." Two disclosures cut the other way: the reimbursement goal is to become "more in line with other NGS providers who have adopted similar strategies, such as FMI and Guardant," and competitors "may have longer operating histories; larger customer bases; greater brand recognition and market penetration." Competition names Foundation Medicine (Roche), Caris, Guardant, Natera, Neogenomics, Quest, LabCorp, Flatiron, IQVIA, ConcertAI and major CROs, all unranked. Scaled positions on both sides support parity, not a top position. | co leader The filing's leadership language is plural and hedged, not exclusive: 'considered among the market leaders' for the Electrical segments (qualified further by 'with respect to many products'), 'among the market leaders' for Aerospace, and 'Eaton is considered among the market leaders' for Vehicle. Nowhere does the 10-K claim to be the single leader in any market, and it never names a competitor or cites a market-share figure. 'Among the market leaders' maps to co_leader, not clear_leader. |
| Pricing power | weak Gross profit was 12.0% of revenues in FY2026, 12.1% in FY2025 and 12.4% in FY2024 — flat to down across three years in which revenue grew from $2.88 billion to $4.64 billion — and the FY2026 increase in gross profit is attributed to "sales volume and product mix," not price. Item 1 says so directly: "we expect the prices we charge for our manufactured products to decrease over time (partly as a result of competitive market forces)," with the offset coming from cycle-time, mix, yield and material-cost work rather than from rate. The risk factors add that customer consolidation gives buyers "increased leverage that may result in, among other things, decreases in our average selling prices," and that new competition "could result in price reductions for our services, reduced gross profit margins or loss of market share." | weak Diagnostics prices are administered: after a CPT code is set, "CMS, establish payment levels and coverage rules under Medicare," delegating to MACs, while "Private payers establish their rates and coverage rules independently." Average revenue per Oncology test rose from about $1,510 to about $1,600, "driven primarily by increased Medicare reimbursement rates" — the payer moved the price. Collection came on "approximately 55% of our clinical oncology NGS tests and 50% of our hereditary tests," and payer "cost-saving initiatives... are likely to result in pricing pressures." The moderate pocket is confined to Data and applications ($316.4M of $1,271.8M). | moderate The filing describes pass-through ability that is real but bounded. On input costs: 'While we strive to recoup these increased costs through our pricing, product modifications or other mediating responses, if we are unable to do so without compromising the competitive position of our products and services, our results could continue to be impacted by this trend.' On macro conditions: 'our responses to mitigate the impact of these conditions, such as potential price increases, could negatively impact our market share or relationships with distributors or customers.' On tariffs: 'potential price increases or other mitigating efforts could negatively impact market share or otherwise increase the risk of customer disputes.' Price is also listed as a principal method of competition in Electrical Americas, Electrical Global, Vehicle and eMobility - so raising price is described by the company as costing share. Aerospace is the exception, where price is not among the listed methods of competition. The filing states no gross-margin trend in Item 1 or Item 1A. |
| Summary | Fabrinet is the neutral outsourced factory for complex photonics. The FY2026 10-K describes a business that wins on qualification and IP hygiene rather than on product ownership: a "factory-within-a-factory" that physically segregates each customer's engineers and floor space, copy-exact line transfers, Telcordia-grade environmental qualification, and a claim that "there is no other manufacturing services provider with a similar breadth and depth of optical and electro-mechanical engineering and process technology capabilities that does not directly compete with its customers in their end-markets." That neutrality is claimed as a belief, not demonstrated — the filing's own framing is "we believe" — and Item 1 names the field it is measured against without characterising any of them: "Benchmark Electronics, Inc., Celestica Inc., InnoLight Technology (Suzhou) Ltd., Jabil Inc., Sanmina Corporation, Venture Corporation Limited and Eoptolink Technology Inc., Ltd., as well as the internal manufacturing capabilities of our customers." Once a program is qualified it tends to stay, and "in many cases, we are the sole outsourced manufacturing partner used by our customers for the products that we manufacture for them." What the moat does not buy is margin. Revenue grew 35.7% in FY2026 to $4.64 billion on the AI-datacenter build-out — data center products are now 47.9% of revenue — yet gross margin slipped to 12.0%, and Item 1 concedes the company expects "the prices we charge for our manufactured products to decrease over time." The two live erosion paths are named in the risk factors: customer consolidation that "may result in, among other things, decreases in our average selling prices," and customers who "acquired the capacity to manufacture products in-house." Concentration cuts both ways this year — FY2025 had two customers above 10% of revenue, FY2026 had four, so the book broadened even as its scale grew. | Tempus AI's durable asset is an installed provider network and the longitudinal data rights attached to it, not any single assay: connections to more than 55% of practicing U.S. oncologists and more than 65% of academic medical centers, 700+ data connections across 5,000+ institution sites. That network makes the linked clinical-molecular database sellable — Insights serves 19 of the 20 largest public pharmaceutical companies by 2024 revenue at roughly 126% net revenue retention, and the trial network (1,400+ trials signed, 40,000+ patients identified) depends on the sequencing base. Economics are improving: revenue up 83% to $1.27B, net loss down from $705.8M to $245.0M. It stops short of wide on the filing's own terms — a $2.4B accumulated deficit, payment on only ~55% of oncology and ~50% of hereditary tests, and Diagnostics prices set by CMS, MACs and private payers. | Eaton describes itself in the FY2025 10-K as an 'intelligent power management company' making products for the data center, utility, industrial, commercial, machine building, residential, aerospace and mobility markets, capitalising on 'the megatrends of the electrification, digitalization, and the reindustrialization of and growth of megaprojects in North America.' Its defensibility rests on positions the filing says are already at or near the front of their markets - a 'strong competitive position' in both Electrical segments and Aerospace, competed on performance, technology, service and, in Aerospace, engineering and total cost of ownership rather than price - reinforced by acquisitions aimed at owning more of the electrical value chain into the data center (Fibrebond for 'modular solutions for multi-tenant and hyperscale data center customers,' Resilient Power Systems to accelerate 'commercialization of solid-state transformer technology,' and an agreed acquisition of Boyd Thermal adding 'critical liquid cooling technology, enabling the Company to serve hyperscale and colocation customers from the chip to the grid'). The counterweight, stated by the company, is customer concentration and a portfolio in flux: on January 26, 2026 Eaton announced its intention to spin off its Mobility business (the legacy Vehicle and eMobility segments) into an independent public company, and re-segmented accordingly in Q1 2026. |
| Chain position | A contract manufacturer sitting between optical components and the network and AI-datacenter OEMs whose brands ship the finished box. FY2026 revenue is 47.9% data center, 33.3% communications infrastructure and 18.8% automotive, industrial and other markets (FY2025: 46.2% / 30.7% / 23.1%), with Cisco, NVIDIA, Nokia and Amazon each above 10% of revenue. Fabrinet also integrates one layer down, designing and fabricating its own customized optics and glass — crystals, ferrules, precision glass tubing — at Fuzhou, China and Mountain Lakes, New Jersey, both for its own assemblies and for the merchant market, while volume manufacturing runs from the Pinehurst and Chonburi campuses in Thailand. | Tempus sits between clinical care and pharma R&D. It ingests data from 5,000+ institution sites, runs five CAP/CLIA labs (Chicago, Atlanta, Raleigh, Aliso Viejo, Minneapolis via OneOme), and sells Diagnostics to providers and payers ($955.4M FY2025, +111%, administered) and Data and applications to pharma ($316.4M, +31%, negotiated). The clinical output is the data business's input. | Upstream electrical infrastructure into AI compute: Eaton supplies the power path from grid to rack, and the 10-K makes that link itself - data center is the first market it names, it cites 'momentum in the data center and utility end markets,' and its 2025-26 acquisitions target hyperscale/colocation modular buildings, solid-state transformers and liquid cooling 'from the chip to the grid.' Its exposure to AI is as a supplier to AI buildout, not as an AI technology vendor; the filing's only AI discussion of its own products is a risk factor about keeping pace with AI internally and about generative-AI compliance risk, which is incidental to the thesis. |
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| Long-horizon vote | +0.05 at weight 0.20 · swarm neutral Editorial prior, not backtested. | -0.01 at weight 0.20 · swarm neutral Editorial prior, not backtested. | +0.30 at weight 0.20 · swarm neutral Editorial prior, not backtested. |