A strong performer from today's morning trading session is Vertiv, whose shares rose 1.4% to $152.9 per share. For those of you thinking about investing in the stock, here is a brief value analysis of the stock using the company's basic fundamental ratios.
Vertiv's Valuation Is in Line With Its Sector Averages:
Vertiv Holdings Co designs, manufactures, and services critical digital infrastructure technologies and life cycle services for data centers, communication networks, and commercial and industrial environments in the Americas, the Asia Pacific, Europe, the Middle East, and Africa. The company belongs to the Technology sector, which has an average price to earnings (P/E) ratio of 30.44 and an average price to book (P/B) ratio of 4.19. In contrast, Vertiv has a trailing 12 month P/E ratio of 67.1 and a P/B ratio of 18.68.
Vertiv has moved 47.5% over the last year compared to 17.1% for the S&P 500 — a difference of 30.4%. Vertiv has a 52 week high of $155.84 and a 52 week low of $53.6.
Strong Revenue Growth but Similar Gross Margins to the Industry Average of 36.97%:
| 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | |
|---|---|---|---|---|---|---|
| Revenue (M) | n/a | $4,371 | $4,998 | $5,692 | $6,863 | $8,012 |
| Gross Margins | n/a | 34.0% | 30.0% | 28.0% | 35.0% | 37.0% |
| Net Margins | n/a | -7.0% | 2.0% | 1.0% | 7.0% | 6.0% |
| Net Income (M) | -$141 | -$327 | $120 | $77 | $460 | $496 |
| Net Interest Expense (M) | $310 | $150 | $91 | $147 | $180 | $150 |
| Depreciation & Amort. (M) | $57 | $60 | $69 | $72 | $74 | $82 |
| Diluted Shares (M) | 118 | 333 | 360 | 378 | 386 | 386 |
| Earnings Per Share | -$1.19 | -$1.07 | $0.33 | -$0.04 | $1.19 | $1.28 |
| EPS Growth | n/a | 10.084033613445369% | 130.84112149532712% | -112.12121212121211% | 3075.0% | 7.5630252100840405% |
| Avg. Price | $10.14 | $14.2 | $23.94 | $14.31 | $48.03 | $150.86 |
| P/E Ratio | -8.52 | -13.27 | 70.41 | 71.55 | 39.69 | 114.29 |
| Free Cash Flow (M) | $10 | $164 | $138 | -$253 | $773 | $1,152 |
| CAPEX (M) | $48 | $44 | $73 | $100 | $128 | $167 |
| EV / EBITDA | -91.97 | -32.44 | 33.34 | 28.21 | 21.47 | 40.96 |
| Total Debt (M) | $3,467 | $2,174 | $2,994 | $3,213 | $2,963 | $2,949 |
| Net Debt / EBITDA | -73.44 | -8.44 | 7.77 | 9.99 | 2.31 | 1.19 |
| Current Ratio | 1.33 | 1.45 | 1.45 | 1.66 | 1.74 | 1.65 |
Vertiv benefits from rapidly growing revenues and increasing reinvestment in the business, generally positive cash flows, and a strong EPS growth trend. The company's financial statements show a decent current ratio of 1.65 and healthy leverage levels. Furthermore, Vertiv has similar gross margins to its peers.
