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Vertiv Holdings (VRT)
NYSE:VRT
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Vertiv Holdings
(NYSE:VRT)76Outperform
Positive Factors
Financial Performance
Vertiv Holdings Co showed strong financial performance with a significant increase in adjusted EPS, surpassing both analyst estimates and consensus.
Order Growth
The backlog remains high despite challenges, indicating strong future demand and order growth in line with the company's framework.
Negative Factors
Order Challenges
Order timing issues in EMEA have led to a weaker growth outlook, reflecting some challenges in the region.
Vertiv Holdings (VRT) vs. S&P 500 (SPY)
Market Cap
$32.90B
Dividend Yield0.13%
Average Volume (3M)13.04M
Price to Earnings (P/E)67.3
Beta (1Y)2.28
Revenue Growth16.74%
EPS Growth9.28%
CountryUS
Employees31,000
SectorIndustrials
Sector Strength66
IndustryIndustrial Goods
Share Statistics
EPS (TTM)1.29
Shares Outstanding380,775,570
10 Day Avg. Volume14,131,408
30 Day Avg. Volume13,041,419
Financial Highlights & Ratios
PEG Ratio7.26
Price to Book (P/B)N/A
Price to Sales (P/S)4.11
Price to Cash Flow (P/CF)19.30
P/FCF Ratio18.50
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$139.08Price Target Upside69.53% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering13
Vertiv Holdings Business Overview & Revenue Model
Company DescriptionVertiv Holdings Co (VRT) is a global provider of critical digital infrastructure and continuity solutions. The company designs, builds, and services mission-critical infrastructure technologies for vital applications in data centers, communication networks, and commercial and industrial environments. Vertiv's product portfolio includes power management, thermal management, IT management, and integrated solutions that ensure the operation of digital systems and data centers, enhancing efficiency and reliability.
How the Company Makes MoneyVertiv Holdings generates revenue through the sale of its products and services related to critical digital infrastructure. Key revenue streams include the sale of power management systems, thermal management solutions, IT management products, and integrated solutions. Vertiv also earns from providing maintenance, installation, and optimization services for data centers and other digital infrastructure. The company often engages in long-term contracts with large enterprises, data center operators, and telecom companies, which ensures a steady revenue flow. Partnerships with technology firms and involvement in large-scale infrastructure projects further contribute to Vertiv's earnings.
Vertiv Holdings Financial Statement Overview
Summary
Vertiv Holdings exhibits strong financial performance with high profitability, improved balance sheet, and robust cash flow management. The company has effectively reduced leverage, enhancing financial stability and positioning for sustainable growth.Income Statement
Vertiv Holdings has demonstrated a strong improvement in profitability, with a gross profit margin of 10.37% and a net profit margin of 8.75% in TTM. The TTM EBIT margin is particularly impressive at 24.14%, indicating efficient operational management. Revenue growth has been stable over recent years, showing a recovery from previous declines.85
Very Positive
Balance Sheet
The company has strengthened its financial position with a significant reduction in total debt, bringing the debt-to-equity ratio down to 0.08 in TTM. The equity ratio has improved to 26.65%, reflecting a solid capital structure. However, historical leverage was high, posing potential risk if not managed carefully.78
Positive
Cash Flow
Vertiv Holdings has shown robust cash flow management with a strong free cash flow growth rate and an impressive operating cash flow to net income ratio of 2.66 in TTM. The free cash flow to net income ratio is also notable at 2.30, indicating healthy cash generation relative to profits.92
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 8.01B | 6.86B | 5.69B | 5.00B | 4.37B | Gross Profit |
| 2.93B | 2.40B | 1.62B | 1.52B | 1.47B | EBIT |
| 1.37B | 872.20M | 223.40M | 259.90M | 213.50M | EBITDA |
| 1.19B | 1.02B | 526.50M | 500.20M | 98.90M | Net Income Common Stockholders |
| 495.80M | 460.20M | 76.60M | 119.60M | -183.60M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 1.23B | 780.40M | 260.60M | 439.10M | 534.60M | Total Assets |
| 9.13B | 8.00B | 7.10B | 6.94B | 5.07B | Total Debt |
| 3.15B | 3.13B | 3.32B | 2.97B | 2.15B | Net Debt |
| 1.92B | 2.35B | 3.06B | 2.53B | 1.62B | Total Liabilities |
| 6.70B | 5.98B | 5.65B | 5.52B | 4.41B | Stockholders Equity |
| 2.43B | 2.01B | 1.44B | 1.42B | 668.30M |
| Cash Flow | Free Cash Flow | |||
| 1.15B | 765.90M | -263.80M | 126.30M | 156.20M | Operating Cash Flow |
| 1.32B | 900.50M | -152.80M | 210.90M | 208.90M | Investing Cash Flow |
| -201.70M | -139.10M | -112.10M | -1.22B | -45.70M | Financing Cash Flow |
| -652.10M | -247.50M | 100.20M | 914.90M | 140.70M |
Vertiv Holdings Technical Analysis
Negative
82.04
Price Trends
115.48
Negative
118.22
Negative
102.95
Negative
Market Momentum
-9.27
Positive
32.08
Neutral
23.21
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VRT, the sentiment is Negative. The current price of 82.04 is below the 20-day moving average (MA) of 102.40, below the 50-day MA of 115.48, and below the 200-day MA of 102.95, indicating a bearish trend. The MACD of -9.27 indicates Positive momentum. The RSI at 32.08 is Neutral, neither overbought nor oversold. The STOCH value of 23.21 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for VRT.
Vertiv Holdings Risk Analysis
Vertiv Holdings disclosed 48 risk factors in its most recent earnings report. Vertiv Holdings 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
Vertiv Holdings Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $76.62B | 22.29 | 110.24% | 2.22% | -1.30% | 20.26% | |
76 Outperform | $32.90B | 67.31 | 22.29% | 0.13% | 16.74% | 9.28% | |
74 Outperform | $112.79B | 30.29 | 20.23% | 1.31% | 7.25% | 18.36% | |
74 Outperform | $65.32B | 27.55 | 9.66% | 1.82% | 10.29% | 22.72% | |
69 Neutral | $30.94B | 34.06 | 26.22% | 1.87% | -11.28% | -23.69% | |
68 Neutral | $135.99B | 24.08 | 33.10% | 2.11% | 5.05% | 2.73% | |
62 Neutral | $8.11B | 13.34 | 1.17% | 3.02% | 4.16% | -15.14% |
* Industrials Sector Average
Performance Comparison
VRT
Vertiv Holdings
82.04
12.75
18.40%
ETN
Eaton
277.55
-17.23
-5.85%
EMR
Emerson Electric Company
116.34
8.15
7.53%
HON
Honeywell International
211.26
14.68
7.47%
ITW
Illinois Tool Works
265.11
9.82
3.85%
ROK
Rockwell Automation
271.82
-17.36
-6.00%
Vertiv Holdings Earnings Call Summary
Earnings Call Date: Feb 12, 2025 | % Change Since: -33.44% | Next Earnings Date: Apr 23, 2025
Earnings Call Sentiment Positive
The earnings call reflected a strong financial performance for Vertiv Holdings Co in 2024, with significant increases in EPS, sales growth across regions, and robust free cash flow. The company has a solid balance sheet and is well-positioned for 2025 with a positive market outlook. However, there are concerns about order volatility, particularly in EMEA, and potential impacts from tariffs. Despite these challenges, the company remains optimistic about future growth.Highlights
Significant Increase in Adjusted EPS
Adjusted earnings per share (EPS) for Q4 were $0.99, a 77% increase compared to the previous year. For the full year 2024, adjusted EPS was $2.85, representing a 61% increase from the prior year.
Strong Organic Sales Growth
Q4 organic sales growth was 27%, with over 20% growth in both the Americas and APAC, and over 30% in EMEA. For the full year 2024, organic sales grew by 18% across all regions.
Robust Free Cash Flow
Adjusted free cash flow was $362 million in Q4 and over $1.1 billion for the year, with a conversion rate of 103%.
Strong Balance Sheet and Capital Deployment
Net leverage reduced to 1x by year-end, with $600 million of share repurchases in 2024 and a 50% increase in dividends. R&D investment increased by $50 million.
Positive Market Outlook for 2025
Projected adjusted EPS for 2025 is between $3.5 and $3.6, with sales estimated at approximately $9.2 billion, despite FX headwinds.
Record Operating Margin Expansion
Adjusted operating margin expanded by 380 basis points in Q4 to 21.5%, and by 410 basis points for the full year to 19.4%.
Lowlights
Orders Decline in EMEA
Weakness in EMEA orders during Q4 due to project activity shifting to 2025, with a reduced outlook from high teens growth to high single digits for 2025.
Concerns Over Order Volatility
Despite strong order growth in the Americas, overall order growth was flat in Q4, raising concerns about volatility and alignment with customer CapEx trends.
Potential Tariff Impacts
Uncertainty regarding the scope and impact of potential tariffs, with ongoing strategic actions to mitigate risks.
Company Guidance
During Vertiv Holdings Co's fourth quarter and full year 2024 earnings conference call, several key metrics were highlighted. The company reported a significant 77% increase in adjusted earnings per share to $0.99, with organic sales growth of 27% in Q4, including over 20% growth in the Americas and APAC, and over 30% in EMEA. The adjusted operating profit for Q4 was $504 million, with a margin of 21.5%, an expansion of 380 basis points from the previous year. Adjusted free cash flow reached $362 million in Q4 and exceeded $1.1 billion for the year, reducing net leverage to 1x. For 2025, Vertiv anticipates sales of approximately $9.2 billion and adjusted EPS between $3.5 and $3.6, projecting continued strong performance driven by a robust backlog up 30% year on year and strong market demand, particularly in the Americas where trailing twelve-month organic orders grew by 50%.Vertiv Holdings Corporate Events
DividendsFinancial Disclosures
Vertiv Holdings Boosts Annual Dividend by 50%
Positive
Nov 18, 2024
Vertiv Holdings Co has announced a 50% increase in its annual dividend, raising it from $0.10 to $0.15 per share, reflecting the company’s robust financial performance and cash flow. The quarterly dividend will start at $0.0375 per share for Class A common stock, payable on December 19, 2024. This announcement was made during an investor event in Atlanta, which coincided with Vertiv’s participation in the SC24 conference, where they showcased their latest technology.
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.