Vertiv(VRT) ZACKS·2024-07-30 12:10Core 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 2.58 [7] - Next year's earnings estimate has moved up from 3.31 [13] - The company reported 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]