When deciding whether to buy, sell, or hold a stock, investors often rely on analyst recommendations. Media reports about rating changes by these brokerage-firm-employed (or sell-side) analysts often influence a stock's price, but are they really important? Let's take a look at what these Wall Street heavyweights have to say about Vertiv Holdings Co. (VRT) before we discuss the reliability of brokerage recommendations and how to use them to your advantage. Vertiv currently has an average brokerage recommend ...

The Zacks Computers – IT Services industry participants like ServiceNow (NOW) , Vertiv (VRT) and SoundHound AI (SOUN) have been benefiting from ongoing digitization efforts globally. Robust spending on cloud, Internet of Things (IoT), cyber security, data and analytics, artificial intelligence (AI) and automation is driving industry-wide growth. Solid demand for advanced IT-service infrastructure solutions for hybrid working and digital healthcare has been benefiting the prospects of industry participants. ...

AI Adjacent Companies and Market Reaction - Vertiv Holdings, Constellation Energy, and NuScale Power surged in Wednesday's trading, with shares up 9 9%, 11 6%, and 6 5% respectively [1] - These companies are considered "AI adjacent" due to their potential to benefit from the increasing power and electricity demands of AI data centers [2] - The recent sell-off in AI-related stocks led to significant pullbacks, with Constellation down 27%, Vertiv down 29%, and NuScale down 44% from their all-time highs [8] Earnings and Commentary Impact - Microsoft and AMD's strong earnings reports and positive AI outlooks alleviated fears of slowing AI growth, boosting AI-adjacent stocks [3][9] - Microsoft CEO Satya Nadella highlighted strong demand for AI-powered products, with CoPilot seats doubling quarter over quarter and continued investment in Azure AI training [10] - AMD exceeded expectations with 115% year-over-year data center growth and raised its 2024 MI300 AI chip sales guidance to $4 5 billion from $4 billion [11] Company-Specific Developments - Vertiv reported strong Q2 results and raised full-year guidance, despite forecasting a sequential decline in Q3 orders, citing strong demand pipeline [5] - Constellation Energy and NuScale Power, both nuclear power-focused companies, saw significant year-to-date gains of 45% and 190% respectively, despite recent sell-offs [6] - NuScale faced a short-seller attack questioning its technology and SEC investigation claims, but the company denied the allegations and stated regulatory inquiries were routine [7] Market Outlook - The recent pullback in AI-related stocks is viewed as a healthy correction rather than the start of a tech crash, with long-term growth prospects remaining intact [12] - The earnings season reinforced the AI growth narrative, suggesting potential entry points for investors with a long-term perspective [12]

However, the second-quarter 2024 earnings results (Jul 24) reflected continued order momentum. Organic orders (excluding foreign exchange) surged 57% year over year, and the book-to-bill ratio was 1.4x in the second quarter. Year to date, VRT shares have surged 62.4% year to date, outperforming the broader Zacks Computer & Technology sector's return of 18.2% and the Zacks IT Services industry's gain of 0.9%. However, VRT stock is not so cheap, as the Value Style Score of D suggests a stretched valuation at ...

sitox/E+ via Getty Images We previously covered Vertiv Holdings (NYSE:VRT) in June 2024, discussing its well-diversified offerings across power management/ storage, thermal management through chilled-water/ liquid cooling solutions, integrated server rack systems, and operating stacks, one that is particularly critical during the ongoing cloud transition and generative AI boom. Combined with its highly strategic partnership with Nvidia (NVDA) and Intel (INTC) for the next-gen AI data center platforms, we ha ...

Core Viewpoint - Vertiv (VRT) is positioned as a strong buy due to its role in the growing data center industry, driven by the demand from AI programs [1] Company Overview - Vertiv Holdings Co provides digital infrastructure and continuity solutions, including hardware, software, analytics, and ongoing services, and is headquartered in Columbus, Ohio [2] Earnings Performance - The company has a solid earnings history, consistently beating the Zacks Consensus in the last four quarters [11] - The average positive earnings surprise over the last four quarters is 12.9% [4] - Recent earnings estimates for the current quarter have increased from 65 cents to 70 cents [6] - The full year 2024 earnings estimate has risen from $2.42 to $2.58 [7] - Next year's earnings estimate has moved up from $3.13 to $3.31 [13] - The company reported $1.953 billion in revenue, beating sales estimates by $9 million, representing a year-over-year growth of 12.6% and a quarter-over-quarter growth of 19.14% [14] Growth Projections - For 2024, the company is expected to show growth of 11.86%, accelerating to 12.97% in 2025 [8] Valuation Metrics - The forward PE ratio is 29x, aligning with expectations for a growth stock, while the price-to-book ratio is 20x, which is considered high [9] - The price-to-sales ratio is at 4x, deemed reasonable given the company's growth [9] Recent Guidance - Despite a recent earnings report that led to a nearly 16% stock drop due to lower growth expectations in one segment (10-15% growth instead of 60%), the company is still expected to show revenue growth this year and acceleration next year [10] - Operating margins have improved from 9.97% to 10.91%, and are projected to reach 11.75% over the last three quarters, indicating that growing sales and higher margins will lead to increased earnings per share [17]

With four "A" range grades assigned by Seeking Alpha Quant, I've not assessed the need to turn cautious about Vertiv's bullish optimism. Investors are urged to consider VRT's "F" valuation grade in perspective, given its robust "A+" growth grade relative to its industrials sector peers. Accordingly, VRT's adjusted forward PEG ratio of 0.6 is more than 60% below its sector peers. Therefore, unless management downgrades its growth profile markedly due to a slower-than-anticipated order book growth cadence, I ...

Financial Performance - Net sales for Q2 2024 were $1,952.8 million, a 12.6% increase from $1,734.1 million in Q2 2023[214] - Net income for Q2 2024 was $178.1 million, a 114.1% increase from $83.2 million in Q2 2023[214] - Comprehensive income for Q2 2024 was $151.8 million, a 64.5% increase from $92.3 million in Q2 2023[215] - Operating profit for Q2 2024 was $336.0 million, a 63.3% increase from $205.8 million in Q2 2023[214] - The company's diluted earnings per share for Q2 2024 were $0.46, a 109.1% increase from $0.22 in Q2 2023[214] - Net income for the six months ended June 30, 2024 was $172.2 million, compared to $133.5 million for the same period in 2023[217] - Operating profit for the Americas segment increased to $285.1 million for the three months ended June 30, 2024, from $191.7 million for the same period in 2023[243] - Total reportable segments' operating profit increased to $426.9 million for the three months ended June 30, 2024, from $309.8 million for the same period in 2023[243] - Net sales for the three months ended June 30, 2024, were $1,121.1 million, a 16.9% increase compared to $959.4 million in the same period in 2023[251] - Operating profit for the three months ended June 30, 2024, was $285.1 million, a 48.7% increase compared to $191.7 million in the same period in 2023[251] - Operating margin increased to 25.4% in Q2 2024, up from 20.0% in Q2 2023, driven by fixed cost leverage, procurement productivity improvements, and price realization[251][252] - Operating profit for the first six months of 2024 was $62.7 million, a $7.9 million increase compared to the same period in 2023, driven by higher sales volumes, improved price realization, and fixed cost leverage[255] Costs and Expenses - Vertiv's cost of sales for Q2 2024 was $1,211.6 million, a 6.3% increase from $1,140.1 million in Q2 2023[214] - The company's selling, general and administrative expenses for Q2 2024 were $363.8 million, an 11.1% increase from $327.6 million in Q2 2023[214] - SG&A expenses for the first six months of 2024 were $677.8 million, an increase of $41.5 million compared to the same period in 2023, primarily due to higher compensation costs, IT and R&D expenses, and professional service fees[253] - Income tax expense for the first six months of 2024 was $79.5 million, a $12.4 million increase compared to $67.1 million in the same period in 2023, driven by improved business results and changes in warrant liabilities[254] Cash Flow and Capital Expenditures - Net cash provided by operating activities was $515.9 million for the six months ended June 30, 2024, up from $295.6 million for the same period in 2023[217] - Capital expenditures were $69.9 million for the six months ended June 30, 2024, compared to $53.6 million for the same period in 2023[217] - Capital expenditures for the first six months of 2024 were $81.5 million, with full-year 2024 expectations set between $175 million and $200 million[256] Share Repurchases and Stock Performance - Vertiv repurchased 9,076,444 shares of its common stock in Q1 2024, with $2.4 billion remaining for additional share repurchases as of June 30, 2024[96] - Vertiv's Board of Directors approved a stock repurchase program of up to $3.0 billion through December 31, 2027[95] - The company repurchased $599.9 million worth of common stock during the six months ended June 30, 2024[217] - The company's stock price increased to $86.57 as of June 30, 2024, from $48.03 as of December 31, 2023[237] - The Vertiv Stockholder sold 20,000,000 shares of Class A common stock on August 8, 2023, reducing its ownership to less than 5% of the outstanding shares[261] Assets and Liabilities - Total current assets increased to $4,191.4 million as of June 30, 2024, up from $4,001.5 million at the end of 2023[216] - Accounts receivable increased to $2,218.8 million as of June 30, 2024, compared to $2,118.1 million at the end of 2023[216] - Inventories rose to $1,103.7 million as of June 30, 2024, up from $884.3 million at the end of 2023[216] - Total liabilities increased to $6,570.8 million as of June 30, 2024, compared to $5,983.6 million at the end of 2023[216] - Total cash, cash equivalents, and restricted cash decreased to $587.7 million as of June 30, 2024, from $788.6 million as of December 31, 2023[229] - Total inventories increased to $1,103.7 million as of June 30, 2024, from $884.3 million as of December 31, 2023[229] - Property, plant and equipment, net increased to $571.1 million as of June 30, 2024, from $560.1 million as of December 31, 2023[229] - The company's long-term debt fair value was $2,118.1 million as of June 30, 2024, compared to $2,107.5 million as of December 31, 2023[238] - Accumulated other comprehensive income (loss) was $(9.8) million as of June 30, 2024, compared to $(65.1) million for the six months ended June 30, 2024[239] Tax and Legal Matters - The company recorded a $10.1 million payment to the Mexican tax administration service (SAT) in Q1 2024, which it intends to seek reimbursement for[192] Revenue by Region - Total revenue for the six months ended June 30, 2024 was $3,255.2 million, with $1,821.7 million from the Americas, $708.8 million from Asia Pacific, and $724.7 million from Europe, Middle East & Africa[222] Hedging and Derivatives - The company has derivative instruments hedging foreign currency exchange rates with a notional amount of $81.0 million, resulting in a realized gain of $0.6 million for the three and six months ended June 30, 2024[234] - The company recognized mark-to-market losses of $0.3 million and $1.0 million for the three and six months ended June 30, 2024, respectively, related to economic hedges for aluminum and copper purchases[235] Credit Facility - The ABL Revolving Credit Facility was amended to increase the revolving loan commitments by $30.0 million, bringing the total loan commitment to $600.0 million[258]

VRT expects third-quarter 2024 non-GAAP earnings between 65 cents per share and 69 cents per share. The Zacks Consensus Estimate for non-GAAP earnings is pegged at $5.65 per share, suggesting year-over-year growth of 4.63%. For 2024, revenues are expected between $7.59 billion and $7.74 billion. Organic net sales are expected in the 12-14% range. The Zacks Consensus Estimate for revenues is pegged at $2.40 billion, indicating 1.99% growth year over year. Vertiv expects adjusted operating profit between $1.4 ...

Key Takeaways Oraganic Orders Jump 57% EVRT Vol 16.944 M 2024 Mar May Nov Sep TradingView Nvidia partner Vertiv reported a big jump in organic orders, lifting earnings and revenue above analysts' estimates. CEO Giordano Albertazzi said the company benefited from demand for artificial intelligence. Vertiv boosted its outlook for full-year adjusted earnings per share and revenue. Nvidia (NVDA) parter Vertiv (VRT) posted higher profit and sales as orders soared and it benefited from surging demand for artifici ...