VRT Stock Overview
Vertiv Holdings Co, together with its subsidiaries, designs, manufactures, and services critical digital infrastructure technologies and life cycle services for data centers, communication networks, and commercial and industrial environments.
Vertiv Holdings Co Competitors
Price History & Performance
|Historical stock prices|
|Current Share Price||US$9.95|
|52 Week High||US$27.97|
|52 Week Low||US$7.76|
|1 Month Change||-15.89%|
|3 Month Change||-0.50%|
|1 Year Change||-58.25%|
|3 Year Change||n/a|
|5 Year Change||n/a|
|Change since IPO||-23.46%|
Recent News & Updates
Vertiv: A Pick And Shovel Play For Data Center
Summary Vertiv has dropped over 50% from its all-time high due to the broad market sell-off and supply chain disruption. The digital infrastructure company has a large TAM and is poised to benefit from the strong growth of data centers. Q3 outlook suggests a significant improvement across all metrics, indicating robust demand and better navigation of the supply chain. I rate the company as a buy. Investment Thesis Vertiv (NYSE:VRT) went public in 2019 through a SPAC merger with GS Acquisition Holdings Corp. Unlike most other SPACs, this is a rare high-quality SPAC co-sponsored by Goldman Sachs (GS) and David Cote, the former CEO of Honeywell (HON). The company has performed exceptionally well since going public, up almost 200% in less than two years. However, the company got caught in an unprecedented supply chain disruption earlier this year. This along with the broad market sell-off caused to stock to plummet by over 50% from its all-time high, now trading at around $12.7. Vertiv has a large TAM and is poised to benefit from the growth of data centers thanks to its leading position in the digital infrastructure space. While the macro environment remains unstable, the company's outlook mentioned in the recent earnings suggests a significant improvement in financial performance over the coming year, as demand continues to increase. Therefore I rate the company as a buy. Vertiv Overview Most people think of Nvidia (NVDA), Equinix (EQIX), or Digital Realty (DLR) when investing in the data center space. However, I believe Vertiv is another pick and shovel data center play that investors can consider. Vertiv can be considered the backbone of data centers. It provides comprehensive digital infrastructure solutions to data centers and communication and industrial companies, which include thermal management, power management, infrastructure hardware, services, etc. The company has a presence in 130+ countries with over 270 service centers. Approximately 70% of total revenue is currently generated from data centers. The company's client list is very impressive, including some of the biggest companies in the world, such as Amazon (AMZN), Google (GOOG), Walmart (WMT), Verizon (VZ), and more. Vertiv Why Vertiv? Vertiv is benefiting from the growth of data centers. Thanks to strong secular trends like cloud computing, IoT (internet of things), video streaming, and gaming, the number of data circulating exploded in the past few years. The increased adoption of digitization and higher requirements for connectivity caused a significant increase in demand for data centers. According to the company, the TAM (total addressable market) for its data segment alone is around $20 billion and is forecasted to grow at a CAGR of 5% moving forward. The total TAM is currently $29.5 billion when accounting also the communication and industrial segment. Rob Johnson, CEO, on market tailwinds: Cloud and colocation remain robust. You have seen this in the cloud growth rates reported by all major cloud providers. AWS reported last week that their cloud business increased 33% in the second quarter and believes that we are still in the early stages of enterprise and public sector cloud adoption. Certainly, the growth in cloud market supports this view; data growth is not slowing down. Our view on the enterprise and small to medium business remain consistent from Q1 and we believe edge applications will continue to provide growth and lift for these markets. The company also has a leading market position with strong competitive advantages. It is currently the leader in 3 out of the 4 markets it operates in, as shown in the slide below. This is especially important in an inflationary environment as it gives the company strong pricing power compared to its peers. Vertiv's business model is also a lot more resilient than its peers. While around 40% of revenue is contributed by project-based sales such as initial deployment and services, the remaining 60% of revenue is flow and recurring-based. Which includes revenue from ongoing maintenance and replacement. These expenses are non-discretionary for customers as they need their data center to be up and running at all times. The large portion of recurring revenue is able to provide the company with a lot more stability. Vertiv Financials Vertiv recently reported its second-quarter earnings and the results remain mixed as it continues to face significant pressure from the macro environment. The company reported net sales of $1.4 billion, up 11% YoY (year over year) from $1.26 billion. The growth is largely driven by strong demand, with quarterly orders up 17% YoY (pricing contributed a 10% increase). Revenue from the US and EMEA continue to show resilience, up 14.6% and 16% respectively. While the revenue from APAC trailed behind with an increase of only 2.3%, largely caused by the lockdown in China. The company also ended the quarter with a record high backlog of $4.4 billion, up 39% from the end of 2021. While sales growth was decent, the bottom line continues to suffer due to macro pressures. Adjusted operating profit decreased 38.8% from $134 million to $82 million. This is due to a significant increase in material and freight costs caused by inflation, as well as FX headwinds. This resulted in adjusted operating margins dropping from 10.6% to 5.9%. Adjusted diluted EPS also decreased from $0.31 to $0.1, largely attributed to the drop in operating profit. Free cash flow was negative $(232) million compared to $41 million a year ago. The drop was due to increased inventories to address the volatile supply chain dynamics and increased backlog.
An Intrinsic Calculation For Vertiv Holdings Co (NYSE:VRT) Suggests It's 38% Undervalued
Today we'll do a simple run through of a valuation method used to estimate the attractiveness of Vertiv Holdings Co...
|VRT||US Electrical||US Market|
Return vs Industry: VRT underperformed the US Electrical industry which returned -24.2% over the past year.
Return vs Market: VRT underperformed the US Market which returned -23.1% over the past year.
|VRT Average Weekly Movement||9.4%|
|Electrical Industry Average Movement||10.6%|
|Market Average Movement||6.9%|
|10% most volatile stocks in US Market||15.8%|
|10% least volatile stocks in US Market||2.8%|
Stable Share Price: VRT is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 9% a week.
Volatility Over Time: VRT's weekly volatility (9%) has been stable over the past year.
About the Company
Vertiv Holdings Co, together with its subsidiaries, designs, manufactures, and services critical digital infrastructure technologies and life cycle services for data centers, communication networks, and commercial and industrial environments. It offers AC and DC power management products, thermal management products, integrated rack systems, modular solutions, and management systems for monitoring and controlling digital infrastructure that are integral to the technologies used for various services, including e-commerce, online banking, file sharing, video on-demand, energy storage, wireless communications, Internet of Things, and online gaming. The company also provides lifecycle management services, predictive analytics, and professional services for deploying, maintaining, and optimizing its products and their related systems; and preventative maintenance, acceptance testing, engineering and consulting, performance assessments, remote monitoring, training, spare parts, and critical digital infrastructure software services.
Vertiv Holdings Co Fundamentals Summary
|VRT fundamental statistics|
Is VRT overvalued?See Fair Value and valuation analysis
Earnings & Revenue
|VRT income statement (TTM)|
|Cost of Revenue||US$3.76b|
Last Reported Earnings
Jun 30, 2022
Next Earnings Date
|Earnings per share (EPS)||0.28|
|Net Profit Margin||2.06%|
How did VRT perform over the long term?See historical performance and comparison
0.1%Current Dividend Yield
Is VRT undervalued compared to its fair value, analyst forecasts and its price relative to the market?
Valuation Score 3/6
Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Key Valuation Metric
Which metric is best to use when looking at relative valuation for VRT?
Other financial metrics that can be useful for relative valuation.
|What is VRT's n/a Ratio?|
Price to Earnings Ratio vs Peers
How does VRT's PE Ratio compare to its peers?
|VRT PE Ratio vs Peers|
|Company||PE||Estimated Growth||Market Cap|
NVT nVent Electric
AYI Acuity Brands
ST Sensata Technologies Holding
VRT Vertiv Holdings Co
Price-To-Earnings vs Peers: VRT is expensive based on its Price-To-Earnings Ratio (35.1x) compared to the peer average (30.9x).
Price to Earnings Ratio vs Industry
How does VRT's PE Ratio compare vs other companies in the US Electrical Industry?
Price-To-Earnings vs Industry: VRT is expensive based on its Price-To-Earnings Ratio (35.1x) compared to the US Electrical industry average (19.4x)
Price to Earnings Ratio vs Fair Ratio
What is VRT's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.
|Current PE Ratio||35.1x|
|Fair PE Ratio||37.7x|
Price-To-Earnings vs Fair Ratio: VRT is good value based on its Price-To-Earnings Ratio (35.1x) compared to the estimated Fair Price-To-Earnings Ratio (37.7x).
Share Price vs Fair Value
What is the Fair Price of VRT when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.
Below Fair Value: VRT ($9.95) is trading below our estimate of fair value ($20.05)
Significantly Below Fair Value: VRT is trading below fair value by more than 20%.
Analyst Price Targets
What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?
Analyst Forecast: Target price is more than 20% higher than the current share price, but analysts are not within a statistically confident range of agreement.
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How is Vertiv Holdings Co forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?
Future Growth Score4/6
Future Growth Score 4/6
Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Forecasted annual earnings growth
Earnings and Revenue Growth Forecasts
Analyst Future Growth Forecasts
Earnings vs Savings Rate: VRT's forecast earnings growth (31.9% per year) is above the savings rate (1.9%).
Earnings vs Market: VRT's earnings (31.9% per year) are forecast to grow faster than the US market (14.7% per year).
High Growth Earnings: VRT's earnings are expected to grow significantly over the next 3 years.
Revenue vs Market: VRT's revenue (5.7% per year) is forecast to grow slower than the US market (7.6% per year).
High Growth Revenue: VRT's revenue (5.7% per year) is forecast to grow slower than 20% per year.
Earnings per Share Growth Forecasts
Future Return on Equity
Future ROE: VRT's Return on Equity is forecast to be high in 3 years time (25.1%)
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How has Vertiv Holdings Co performed over the past 5 years?
Past Performance Score2/6
Past Performance Score 2/6
Growing Profit Margin
Earnings vs Industry
Historical annual earnings growth
Earnings and Revenue History
Quality Earnings: VRT has a large one-off loss of $44.3M impacting its June 30 2022 financial results.
Growing Profit Margin: VRT became profitable in the past.
Past Earnings Growth Analysis
Earnings Trend: VRT has become profitable over the past 5 years, growing earnings by 58.8% per year.
Accelerating Growth: VRT has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.
Earnings vs Industry: VRT has become profitable in the last year, making it difficult to compare its past year earnings growth to the Electrical industry (27.4%).
Return on Equity
High ROE: VRT's Return on Equity (7.9%) is considered low.
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How is Vertiv Holdings Co's financial position?
Financial Health Score1/6
Financial Health Score 1/6
Short Term Liabilities
Long Term Liabilities
Financial Position Analysis
Short Term Liabilities: VRT's short term assets ($2.8B) exceed its short term liabilities ($1.8B).
Long Term Liabilities: VRT's short term assets ($2.8B) do not cover its long term liabilities ($3.7B).
Debt to Equity History and Analysis
Debt Level: VRT's net debt to equity ratio (216.5%) is considered high.
Reducing Debt: Insufficient data to determine if VRT's debt to equity ratio has reduced over the past 5 years.
Debt Coverage: VRT's operating cash flow is negative, therefore debt is not well covered.
Interest Coverage: VRT's interest payments on its debt are not well covered by EBIT (1.1x coverage).
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What is Vertiv Holdings Co current dividend yield, its reliability and sustainability?
Dividend Score 0/6
Cash Flow Coverage
Current Dividend Yield
Dividend Yield vs Market
Notable Dividend: VRT's dividend (0.1%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.65%).
High Dividend: VRT's dividend (0.1%) is low compared to the top 25% of dividend payers in the US market (4.57%).
Stability and Growth of Payments
Stable Dividend: VRT is not paying a notable dividend for the US market, therefore no need to check if payments are stable.
Growing Dividend: VRT is not paying a notable dividend for the US market, therefore no need to check if payments are increasing.
Earnings Payout to Shareholders
Earnings Coverage: VRT is not paying a notable dividend for the US market.
Cash Payout to Shareholders
Cash Flow Coverage: VRT is paying a dividend but the company has no free cash flows.
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How experienced are the management team and are they aligned to shareholders interests?
Average management tenure
Rob Johnson (55 yo)
Dr. Robert J. Johnson, also known as Rob, Ph D., has been Chief Executive Officer and Director of Vertiv Holdings Co. since February 07, 2020. Dr. Johnson served as the Director of GS Acquisition Holdings...
CEO Compensation Analysis
Compensation vs Market: Rob's total compensation ($USD5.18M) is about average for companies of similar size in the US market ($USD6.95M).
Compensation vs Earnings: Rob's compensation has been consistent with company performance over the past year.
Experienced Management: VRT's management team is considered experienced (2.6 years average tenure).
Experienced Board: VRT's board of directors are not considered experienced ( 2.6 years average tenure), which suggests a new board.
Who are the major shareholders and have insiders been buying or selling?
Insider Trading Volume
Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.
Recent Insider Transactions
|18 Mar 22||BuyUS$175,110||David Fallon||Individual||13,000||US$13.47|
|16 Mar 22||BuyUS$185,850||Patrick Johnson||Individual||15,000||US$12.39|
|03 Mar 22||BuyUS$115,000||Patrick Johnson||Individual||10,000||US$11.50|
|09 Nov 21||BuyUS$24,924||Edward Monser||Individual||918||US$27.15|
|04 Nov 21||SellUS$544,303,473||Platinum Equity, LLC||Company||21,925,000||US$24.83|
Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 7%.
|Ownership||Name||Shares||Current Value||Change %||Portfolio %|
Vertiv Holdings Co's employee growth, exchange listings and data sources
- Name: Vertiv Holdings Co
- Ticker: VRT
- Exchange: NYSE
- Founded: NaN
- Industry: Electrical Components and Equipment
- Sector: Capital Goods
- Implied Market Cap: US$3.752b
- Shares outstanding: 377.04m
- Website: https://www.vertiv.com
Number of Employees
- Vertiv Holdings Co
- 1050 Dearborn Drive
- United States
|Ticker||Exchange||Primary Security||Security Type||Country||Currency||Listed on|
|49V||DB (Deutsche Boerse AG)||Yes||Class A Common Stock||DE||EUR||Feb 2020|
|VRT||NYSE (New York Stock Exchange)||Yes||Class A Common Stock||US||USD||Feb 2020|
Company Analysis and Financial Data Status
|Data||Last Updated (UTC time)|
|Company Analysis||2022/09/25 00:00|
|End of Day Share Price||2022/09/23 00:00|
Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.