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Veralto Corporation (VLTO)
NYSE:VLTO
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Veralto Corporation
(NYSE:VLTO)68Neutral
Positive Factors
Acquisitions
The acquisition of TraceGains is a strong strategic fit and represents an important step in unlocking an M&A flywheel.
Financial Performance
VLTO's significant free cash flow conversion covered nearly two-thirds of its recent acquisition.
Negative Factors
Stock Performance
The stock is underperforming compared to R2K, reflective of a high bar entering the quarter.
Veralto Corporation (VLTO) vs. S&P 500 (SPY)
Market Cap
$24.41B
Dividend Yield0.39%
Average Volume (3M)1.53M
Price to Earnings (P/E)29.6
Beta (1Y)0.74
Revenue Growth3.43%
EPS Growth-1.15%
CountryUS
Employees16,000
SectorIndustrials
Sector Strength66
IndustryIndustrial Goods
Share Statistics
EPS (TTM)3.34
Shares Outstanding247,550,640
10 Day Avg. Volume1,531,454
30 Day Avg. Volume1,534,257
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)4.70
Price to Cash Flow (P/CF)21.40
P/FCF Ratio21.40
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$112.86Price Target Upside12.72% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering7
Veralto Corporation Business Overview & Revenue Model
Company DescriptionVeralto Corporation (VLTO) is a diversified global technology and industrial solutions company, operating across various sectors including environmental, industrial, and safety solutions. The company specializes in providing advanced analytical and monitoring equipment, process automation systems, and safety products, catering to a broad range of industries such as healthcare, energy, and manufacturing. With a strong focus on innovation, Veralto strives to deliver high-quality and reliable solutions that enhance operational efficiency and sustainability for its clients worldwide.
How the Company Makes MoneyVeralto Corporation generates revenue primarily through the sale of its advanced technology products and solutions across different sectors. The company's key revenue streams include the sales of analytical instruments, monitoring equipment, and safety solutions, which are critical for industries requiring precision and compliance. Additionally, Veralto offers comprehensive service and maintenance packages, providing ongoing support and generating recurring income. Strategic partnerships and collaborations with industry leaders further enhance its market reach and contribute to its earnings by expanding its customer base and offering cutting-edge solutions.
Veralto Corporation Financial Statement Overview
Summary
Veralto Corporation demonstrates robust financial health with strong revenue growth, efficient operations, and solid cash generation. The company maintains a healthy balance sheet with manageable leverage and efficient use of equity. However, slight weaknesses in net income and increasing liabilities should be monitored. Overall, Veralto is well-positioned within the industrial goods sector.Income Statement
The company shows strong financial performance with a consistent revenue growth rate of 3.43% from 2023 to TTM, driven by solid EBIT and EBITDA margins at 23.26% and 24.16% respectively in TTM. The gross profit margin is also robust at 59.81%. However, a slight decline in net income from 2023 to TTM indicates a potential pressure on net profit margin, which stands at 16.04%.87
Very Positive
Balance Sheet
Veralto Corporation maintains a healthy debt-to-equity ratio of 1.27, suggesting manageable leverage. The equity ratio is stable at 31.91% in TTM, reflecting a solid equity base. Return on equity is impressive at 40.74%, highlighting efficient use of equity. Nonetheless, the company's total liabilities have increased, which warrants monitoring.78
Positive
Cash Flow
The company displays strong cash generation with an operating cash flow to net income ratio of 1.05 in TTM, indicating efficient conversion of income to cash. Free cash flow remains stable, although it experienced a slight decline from 2023 to TTM. The free cash flow to net income ratio is high at 0.98, showcasing healthy cash management, despite a reduction in operating cash flow from the previous year.82
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 5.19B | 5.02B | 4.88B | 4.70B | 4.35B | Gross Profit |
| 3.10B | 2.90B | 2.77B | 2.71B | 2.51B | EBIT |
| 1.21B | 1.14B | 1.08B | 1.04B | 951.00M | EBITDA |
| 1.21B | 1.21B | 1.21B | 1.15B | 1.06B | Net Income Common Stockholders |
| 833.00M | 839.00M | 845.00M | 861.00M | 724.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 1.10B | 762.00M | -123.00M | -135.00M | 0.00 | Total Assets |
| 6.41B | 5.69B | 4.83B | 4.84B | 0.00 | Total Debt |
| 2.60B | 2.78B | 123.00M | 135.00M | 0.00 | Net Debt |
| 1.50B | 2.02B | 246.00M | 270.00M | 0.00 | Total Liabilities |
| 4.36B | 4.30B | 1.58B | 1.64B | 0.00 | Stockholders Equity |
| 2.04B | 1.38B | 3.23B | 3.20B | 0.00 |
| Cash Flow | Free Cash Flow | |||
| 820.00M | 909.00M | 836.00M | 842.00M | 965.00M | Operating Cash Flow |
| 875.00M | 963.00M | 870.00M | 896.00M | 1.00B | Investing Cash Flow |
| -434.00M | -55.00M | -89.00M | -97.00M | -157.00M | Financing Cash Flow |
| -65.00M | -135.00M | -781.00M | -799.00M | -844.00M |
Veralto Corporation Technical Analysis
Neutral
100.12
Price Trends
100.85
Negative
103.46
Negative
103.86
Negative
Market Momentum
-0.51
Negative
51.47
Neutral
36.56
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VLTO, the sentiment is Neutral. The current price of 100.12 is above the 20-day moving average (MA) of 99.12, below the 50-day MA of 100.85, and below the 200-day MA of 103.86, indicating a neutral trend. The MACD of -0.51 indicates Negative momentum. The RSI at 51.47 is Neutral, neither overbought nor oversold. The STOCH value of 36.56 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for VLTO.
Veralto Corporation Risk Analysis
Veralto Corporation disclosed 36 risk factors in its most recent earnings report. Veralto Corporation reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Veralto Corporation Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | $22.51B | 36.06 | 42.82% | ― | 0.07% | -1.20% | |
70 Outperform | $199.06B | 31.90 | 13.15% | 0.29% | 0.05% | 6.87% | |
68 Neutral | $24.41B | 29.55 | 48.70% | 0.39% | 3.43% | -1.15% | |
68 Neutral | $36.07B | 29.07 | 20.61% | 0.76% | -3.00% | 3.67% | |
65 Neutral | $150.49B | 39.81 | 7.57% | 0.51% | -13.50% | -17.25% | |
62 Neutral | $8.11B | 13.34 | 1.17% | 3.02% | 4.16% | -15.14% | |
58 Neutral | $7.11B | 61.96 | 7.16% | 0.43% | 13.56% | -73.92% |
* Industrials Sector Average
Performance Comparison
VLTO
Veralto Corporation
100.12
11.70
13.23%
A
Agilent
126.70
-19.58
-13.39%
BRKR
Bruker
48.41
-42.93
-47.00%
DHR
Danaher
212.07
-39.64
-15.75%
TMO
Thermo Fisher
531.71
-66.09
-11.06%
WAT
Waters
392.99
39.13
11.06%
Veralto Corporation Earnings Call Summary
Earnings Call Date: Feb 4, 2025 | % Change Since: -0.85% | Next Earnings Date: Apr 29, 2025
Earnings Call Sentiment Positive
The earnings call highlighted Veralto's strong financial performance and strategic growth initiatives, including record sales, innovative product launches, and successful acquisitions. However, challenges in the China market and currency headwinds posed concerns for the company. Despite these lowlights, the overall sentiment remains positive due to strong execution and financial performance.Highlights
Record Sales Achievement
Total sales grew 3.4% year-over-year to just under $5.2 billion, marking an all-time high for the company.
Strong Financial Performance
Exceeded initial guidance on core sales growth, operating profit margin expansion, and adjusted earnings per share growth, with a full-year EPS growth of 11% to $3.54 per share.
Water Quality Segment Success
Water Quality segment achieved 3.9% core sales growth and 50 basis points of adjusted operating profit margin expansion, with annual sales over $3 billion.
PQI Segment Milestone
PQI delivered 3.3% core sales growth with 160 basis points of adjusted operating profit margin expansion, reaching over $2 billion in sales.
Innovative Product Launches
Videojet launched the 7920 UV Laser Marking System with strong customer demand and enthusiasm, optimizing coding for fast-growing packaging substrates.
Strategic Acquisitions and Investments
Acquired TraceGains and invested in Axine Water Technologies, enhancing portfolio with innovative solutions and expanding digital offerings.
Lowlights
China Market Challenges
Continued low sales levels in China, with no expected growth in 2025 due to soft demand for Water Quality products and lower installations for chip processing.
Currency Headwinds
Currency resulted in approximately $25 million headwind to sales and $7 million to adjusted operating profit in Q4, impacting earnings per share by $0.02.
TraceGains Margin Impact
TraceGains acquisition was 70 basis points dilutive to PQI's margins in Q4, affecting overall segment profitability.
Company Guidance
During Veralto Corporation's Fourth Quarter 2024 earnings call, the company provided guidance for 2025, targeting low to mid-single-digit core sales growth, with an emphasis on strong incremental margins and solid earnings growth. The guidance anticipates adjusted EPS in the range of $3.60 to $3.70, with a planned 25 to 50 basis points improvement in adjusted operating profit margin. The company expects currency to be a 2% headwind to sales and a $0.08 headwind to adjusted earnings per share. Additionally, Veralto aims for a free cash flow conversion between 90% to 100% of GAAP net income, with CapEx in the range of 1% to 1.5% of sales. The first quarter of 2025 is expected to continue the trend with core sales growth in low to mid-single digits across both segments, an adjusted operating profit margin between 24% to 24.5%, and adjusted EPS guidance of $0.84 to $0.88 per share.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.