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Vertiv (VRT - Free Report) is a Zacks Rank #1 (Strong Buy) that has an D for Value and a B for Growth. This company is benefactor of the AI boom as the company makes equipment for data centers. The demand for data from AI programs has led to explosive growth in the data center industry. Let’s explore more about this company in this Bull of The Day article.
Description
Vertiv Holdings Co provides digital infrastructure and continuity solutions. It offers hardware, software, analytics and ongoing services. Vertiv Holdings Co, formerly known as GS Acquisition Holdings Corp, is headquartered in Columbus, Ohio.
Earnings History
When I look at a stock, the first thing I do is look to see if the company is beating the number. This tells me right away where the market’s expectations have been for the company and how management has communicated to the market. A stock that consistently beats has management communicating expectations to Wall Street that can be achieved. That is what you want to see.
Vertiv (VRT - Free Report) has a solid earnings history with the company topping the Zacks Consensus in each of the last four quarters.
Over the course of the last four quarters the average positive earnings surprise works out to be 12.9%.
Earnings Estimates Revisions
Earnings estimates revisions is what the Zacks Rank is all about.
Estimates are moving higher for Vertiv.
This quarter has moved up from 65 cents to 70 cents over the last week.
Next quarter is up from 76 cents to 77 cents.
The full year 2024 has increased from $2.42 to $2.58.
Next year has also moved up from $3.13 to $3.31
Growth
The company has beat the sales estimate in each of the last two quarters. Most recently the company beat the topline by $9M in reporting $1.953B. That represents 12.6% growth on a year over year basis and a 19.14% growth rate over the most recent quarter.
For 2024 the company is expected to show 11.86% growth and that accelerates to 12.97% in 2025.
Valuation
The forward PE is 29x and that right about where you expect a growth stock like this to be priced. Price to book is 20x and that metric is a little high. Price to sales is at 4x which is pretty reasonable given the growth.
Margins are looking good with the Zacks site showing operating margins moving from 9.97% to 10.91% and up to 11.75% over the last three quarters. Growing sales and higher margins will translate to higher earnings per share.
Recent Guidance
The most recent earnings report contained guidance that Wall Street didn’t like very much. One segment of the company is now expecting 10-15% growth when 60% was expected, and that was the reason the stock fell nearly 16% after the report. At the end of the day, the company is still expected to show revenue growth this year and an acceleration next year. This is certainly a stock that investors should consider when looking to buy the dip.
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Bull Of The Day: Vertiv (VRT)
Vertiv (VRT - Free Report) is a Zacks Rank #1 (Strong Buy) that has an D for Value and a B for Growth. This company is benefactor of the AI boom as the company makes equipment for data centers. The demand for data from AI programs has led to explosive growth in the data center industry. Let’s explore more about this company in this Bull of The Day article.
Description
Vertiv Holdings Co provides digital infrastructure and continuity solutions. It offers hardware, software, analytics and ongoing services. Vertiv Holdings Co, formerly known as GS Acquisition Holdings Corp, is headquartered in Columbus, Ohio.
Earnings History
When I look at a stock, the first thing I do is look to see if the company is beating the number. This tells me right away where the market’s expectations have been for the company and how management has communicated to the market. A stock that consistently beats has management communicating expectations to Wall Street that can be achieved. That is what you want to see.
Vertiv (VRT - Free Report) has a solid earnings history with the company topping the Zacks Consensus in each of the last four quarters.
Over the course of the last four quarters the average positive earnings surprise works out to be 12.9%.
Earnings Estimates Revisions
Earnings estimates revisions is what the Zacks Rank is all about.
Estimates are moving higher for Vertiv.
This quarter has moved up from 65 cents to 70 cents over the last week.
Next quarter is up from 76 cents to 77 cents.
The full year 2024 has increased from $2.42 to $2.58.
Next year has also moved up from $3.13 to $3.31
Growth
The company has beat the sales estimate in each of the last two quarters. Most recently the company beat the topline by $9M in reporting $1.953B. That represents 12.6% growth on a year over year basis and a 19.14% growth rate over the most recent quarter.
For 2024 the company is expected to show 11.86% growth and that accelerates to 12.97% in 2025.
Valuation
The forward PE is 29x and that right about where you expect a growth stock like this to be priced. Price to book is 20x and that metric is a little high. Price to sales is at 4x which is pretty reasonable given the growth.
Margins are looking good with the Zacks site showing operating margins moving from 9.97% to 10.91% and up to 11.75% over the last three quarters. Growing sales and higher margins will translate to higher earnings per share.
Recent Guidance
The most recent earnings report contained guidance that Wall Street didn’t like very much. One segment of the company is now expecting 10-15% growth when 60% was expected, and that was the reason the stock fell nearly 16% after the report. At the end of the day, the company is still expected to show revenue growth this year and an acceleration next year. This is certainly a stock that investors should consider when looking to buy the dip.