Is Vertiv’s Strong 2025 Rally Justified After Latest AI Data Center Expansion News?

If you have Vertiv Holdings Co on your radar, you are definitely not alone. Investors have seen this stock make some dramatic moves lately and it is only natural to wonder if now is the right moment to buy, hold, or sell. In the past year alone, Vertiv's price has climbed a striking 41.0%, while its 3-year return is an eye-popping 1331.2%. Even over just the last month, shares are up by 7.2%, although a recent week saw a slight pullback of -3.5%. These kinds of numbers have a way of making investors sit up and take notice, particularly as markets buzz about shifts in technology infrastructure and data center demand, areas where Vertiv is a notable player.

With big upward moves like this, the conversation inevitably turns to whether Vertiv is still a good value, or whether that rocket-fueled growth is already priced in. According to our latest valuation checks, the company is undervalued in only 1 out of 6 key metrics, giving it a value score of 1. That means most current measures suggest the market may have caught on to Vertiv’s story, even if some hidden potential remains. But the traditional valuation score only tells part of the story.

Next, let's break down how Vertiv stacks up across the major valuation methods, before diving into an even more insightful way to gauge its real worth.

Vertiv Holdings Co scores just 1/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Vertiv Holdings Co Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model estimates a stock’s value by projecting all future free cash flows that a business is expected to generate and discounting them back to today’s value. This approach looks past short-term volatility and aims to quantify a company’s intrinsic worth based on its ability to generate cash over many years.

For Vertiv Holdings Co, the most recent twelve months of free cash flow stand at approximately $1.24 billion. Analysts have projected that this number will grow, with free cash flow expected to reach around $3.08 billion by 2029. These projections are based on detailed forecasts for the next five years. After this period, the growth path is extended using internal models.

Based on Simply Wall St’s 2 Stage DCF model, the estimated fair value for Vertiv’s shares is $142.32. This intrinsic value is just 2.6% higher than the current market price, which suggests that the stock is trading very close to its fair DCF value.

Result: ABOUT RIGHT

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Vertiv Holdings Co.

Simply Wall St performs a valuation analysis on every stock in the world every day (check out Vertiv Holdings Co's valuation analysis). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes.

Approach 2: Vertiv Holdings Co Price vs Earnings (PE)

The Price-to-Earnings (PE) ratio is a classic yardstick for valuing profitable companies, as it puts a company’s market price into context with its earnings power. For firms like Vertiv Holdings Co, this ratio can help investors gauge whether the stock price justifies the underlying profit engine, factoring in how much growth and risk are expected ahead.

Growth expectations and risk levels matter. A rapidly growing, stable business typically commands a higher PE, while slower-growing or riskier firms often trade at lower multiples. Vertiv’s current PE ratio stands at an eye-catching 65.2x, which is well above both the Electrical industry average of 29.3x and the average among its peers, which is 32.5x. At a first glance, this might seem lofty, especially compared to these benchmarks.

This is where Simply Wall St’s Fair Ratio comes in. The Fair Ratio estimates what a reasonable PE would be for Vertiv, taking into account not just industry norms, but also the company’s expected earnings growth, margins, overall risk profile, and market cap. Unlike raw peer or industry comparisons, the Fair Ratio is personalized to Vertiv’s specific situation. For Vertiv, the Fair Ratio is 57.9x. Since Vertiv’s actual PE is only slightly higher than this figure, the difference is minimal, suggesting the market price fairly reflects its earnings potential and growth outlook right now.

Result: ABOUT RIGHT

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Vertiv Holdings Co Narrative

Earlier, we mentioned there is a more dynamic way to understand valuation, so let’s introduce you to Narratives, a powerful tool that brings your investment ideas to life. A Narrative is more than just numbers; it is your personalized story about a company backed by your assumptions on fair value, future revenue, earnings, and margins. Narratives connect the business story and industry context directly to forecasted financials and their resulting fair value, helping you visualize how your view compares to other investors. Simply Wall St makes Narratives easy and accessible on their Community page, where millions of investors share and refine their perspectives in real time.

With Narratives, you can see how shifts in market news or earnings reports instantly update a company's outlook, making your decision to buy, hold, or sell far more responsive than static metrics. For Vertiv Holdings Co, for example, one investor’s Narrative might project aggressive AI-driven growth and a fair value of $173, while another might point to risks in operational scaling and land at a more cautious $119. The story you believe will determine whether you think Vertiv’s current price spells opportunity or caution.

Do you think there's more to the story for Vertiv Holdings Co? Create your own Narrative to let the Community know!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com