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VRT

Vertiv Holdings Co NYSE:VRT Stock Report

Last Price

US$9.95

Market Cap

US$3.8b

7D

-19.3%

1Y

-58.2%

Updated

25 Sep, 2022

Data

Company Financials +
VRT fundamental analysis
Snowflake Score
Valuation3/6
Future Growth4/6
Past Performance2/6
Financial Health1/6
Dividends0/6

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

Summary of all time highs, changes and price drops for Vertiv Holdings Co
Historical stock prices
Current Share PriceUS$9.95
52 Week HighUS$27.97
52 Week LowUS$7.76
Beta1.92
1 Month Change-15.89%
3 Month Change-0.50%
1 Year Change-58.25%
3 Year Changen/a
5 Year Changen/a
Change since IPO-23.46%

Recent News & Updates

Sep 14

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.

Aug 17
An Intrinsic Calculation For Vertiv Holdings Co (NYSE:VRT) Suggests It's 38% Undervalued

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...

Shareholder Returns

VRTUS ElectricalUS Market
7D-19.3%-7.0%-5.2%
1Y-58.2%-24.2%-23.0%

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.

Price Volatility

Is VRT's price volatile compared to industry and market?
VRT volatility
VRT Average Weekly Movement9.4%
Electrical Industry Average Movement10.6%
Market Average Movement6.9%
10% most volatile stocks in US Market15.8%
10% least volatile stocks in US Market2.8%

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

FoundedEmployeesCEOWebsite
n/a24,000Rob Johnsonhttps://www.vertiv.com

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

How do Vertiv Holdings Co's earnings and revenue compare to its market cap?
VRT fundamental statistics
Market CapUS$3.75b
Earnings (TTM)US$107.00m
Revenue (TTM)US$5.20b

35.1x

P/E Ratio

0.7x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
VRT income statement (TTM)
RevenueUS$5.20b
Cost of RevenueUS$3.76b
Gross ProfitUS$1.43b
Other ExpensesUS$1.32b
EarningsUS$107.00m

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)0.28
Gross Margin27.53%
Net Profit Margin2.06%
Debt/Equity Ratio232.2%

How did VRT perform over the long term?

See historical performance and comparison

Dividends

0.1%

Current Dividend Yield

3%

Payout Ratio
We’ve recently updated our valuation analysis.

Valuation

Is VRT undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

3/6

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

  • Analyst Forecast

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.

VRT key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue1.3x
Enterprise Value/EBITDA17.6x
PEG Ratio1.1x

Price to Earnings Ratio vs Peers

How does VRT's PE Ratio compare to its peers?

VRT PE Ratio vs Peers
The above table shows the PE ratio for VRT vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPEEstimated GrowthMarket Cap
Peer Average30.9x
NVT nVent Electric
18.1x11.9%US$5.2b
AYI Acuity Brands
13.9x2.9%US$5.1b
ST Sensata Technologies Holding
23x28.0%US$5.8b
VICR Vicor
68.5x51.6%US$2.6b
VRT Vertiv Holdings Co
35.1x31.9%US$3.8b

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.

VRT PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio35.1x
Fair PE Ratio37.7x

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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Future Growth

How is Vertiv Holdings Co forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?

Future Growth Score

4/6

Future Growth Score 4/6

  • Earnings vs Savings Rate

  • Earnings vs Market

  • High Growth Earnings

  • Revenue vs Market

  • High Growth Revenue

  • Future ROE


31.9%

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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Past Performance

How has Vertiv Holdings Co performed over the past 5 years?

Past Performance Score

2/6

Past Performance Score 2/6

  • Quality Earnings

  • Growing Profit Margin

  • Earnings Trend

  • Accelerating Growth

  • Earnings vs Industry

  • High ROE


58.8%

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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Financial Health

How is Vertiv Holdings Co's financial position?

Financial Health Score

1/6

Financial Health Score 1/6

  • Short Term Liabilities

  • Long Term Liabilities

  • Debt Level

  • Reducing Debt

  • Debt Coverage

  • Interest Coverage

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).


Balance Sheet


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Dividend

What is Vertiv Holdings Co current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

  • Notable Dividend

  • High Dividend

  • Stable Dividend

  • Growing Dividend

  • Earnings Coverage

  • Cash Flow Coverage


0.10%

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.


Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

2.6yrs

Average management tenure


CEO

Rob Johnson (55 yo)

2.58yrs

Tenure

US$5,180,837

Compensation

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.


Leadership Team

Experienced Management: VRT's management team is considered experienced (2.6 years average tenure).


Board Members

Experienced Board: VRT's board of directors are not considered experienced ( 2.6 years average tenure), which suggests a new board.


Ownership

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

NYSE:VRT Recent Insider Transactions by Companies or Individuals
DateValueNameEntityRoleSharesMax Price
18 Mar 22BuyUS$175,110David FallonIndividual13,000US$13.47
16 Mar 22BuyUS$185,850Patrick JohnsonIndividual15,000US$12.39
03 Mar 22BuyUS$115,000Patrick JohnsonIndividual10,000US$11.50
09 Nov 21BuyUS$24,924Edward MonserIndividual918US$27.15
04 Nov 21SellUS$544,303,473Platinum Equity, LLCCompany21,925,000US$24.83

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 7%.


Top Shareholders

Top 25 shareholders own 80.51% of the company
OwnershipNameSharesCurrent ValueChange %Portfolio %
10.07%
Platinum Equity, LLC
37,955,215$377.7m0%22.07%
8.72%
Barrow, Hanley, Mewhinney & Strauss, LLC
32,876,094$327.1m3.31%1.32%
7.07%
The Vanguard Group, Inc.
26,655,664$265.2m0.2%0.01%
5.1%
BlackRock, Inc.
19,227,692$191.3m1.26%0.01%
4.9%
E&I Engineering Limited
18,486,271$183.9m0%no data
4.81%
FMR LLC
18,148,931$180.6m26.01%0.02%
3.8%
ClearBridge Investments, LLC
14,334,266$142.6m1.66%0.14%
3.06%
UBS Asset Management
11,544,523$114.9m361.72%0.02%
2.95%
Eminence Capital, LP
11,115,746$110.6m8.42%2.4%
2.93%
American Century Investment Management Inc
11,035,741$109.8m0%0.09%
2.87%
Invesco Ltd.
10,815,033$107.6m53.85%0.04%
2.83%
NewSouth Capital Management, Inc.
10,677,030$106.2m-1.35%5.58%
2.82%
David Cote
10,634,758$105.8m0%no data
2.75%
AllianceBernstein L.P.
10,353,019$103.0m-22.39%0.05%
2.53%
Victory Capital Management Inc.
9,534,099$94.9m0%0.11%
2.03%
Baron Capital Group, Inc.
7,650,000$76.1m22.4%0.23%
1.89%
Barclays PLC Private Banking & Investment Banking Investment
7,143,103$71.1m268740.91%0.12%
1.73%
Brahman Capital Corp.
6,507,732$64.8m-1.9%8.99%
1.39%
Impax Asset Management Group plc
5,242,656$52.2m-1.87%0.19%
1.23%
State Street Global Advisors, Inc.
4,653,977$46.3m1.03%no data
1.22%
Massachusetts Financial Services Company
4,587,938$45.6m40.54%0.01%
1.2%
Ignis Investment Services Limited
4,516,109$44.9m-6.45%0.19%
1.02%
Geode Capital Management, LLC
3,836,464$38.2m-1.01%0.01%
0.82%
Barclays Bank PLC, Securities Investments
3,097,612$30.8m170473.35%0.1%
0.78%
RobecoSAM AG
2,929,000$29.1m0%0.3%

Company Information

Vertiv Holdings Co's employee growth, exchange listings and data sources


Key Information

  • 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


Location

  • Vertiv Holdings Co
  • 1050 Dearborn Drive
  • Columbus
  • Ohio
  • 43085
  • United States


Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
49VDB (Deutsche Boerse AG)YesClass A Common StockDEEURFeb 2020
VRTNYSE (New York Stock Exchange)YesClass A Common StockUSUSDFeb 2020

Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/09/25 00:00
End of Day Share Price2022/09/23 00:00
Earnings2022/06/30
Annual Earnings2021/12/31


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.