Core Viewpoint - Vontier Corporation (VNT) has been upgraded to a Zacks Rank 2 (Buy), indicating a positive outlook on its earnings estimates, which significantly influence stock prices [1][3]. Earnings Estimates and Stock Price Impact - The Zacks rating system is based on changes in earnings estimates, which are strongly correlated with near-term stock price movements [4][6]. - Institutional investors often adjust their valuations based on earnings estimates, leading to significant stock price movements when estimates are revised [4]. Company Performance and Outlook - The upgrade for Vontier suggests an improvement in the company's underlying business, which could lead to higher stock prices as investors respond positively [5]. - Vontier is expected to earn $3.15 per share for the fiscal year ending December 2025, with a 2% increase in the Zacks Consensus Estimate over the past three months [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks, which have generated an average annual return of +25% since 1988 [7]. - Vontier's upgrade to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, indicating a strong potential for market-beating returns in the near term [10].

Group 1 - Vontier Corporation (VNT) is currently rated 2 (Buy) by Zacks Rank, while Duolingo, Inc. (DUOL) is rated 4 (Sell), indicating a stronger earnings outlook for VNT [3] - VNT has a forward P/E ratio of 12.82, significantly lower than DUOL's forward P/E of 117.01, suggesting VNT is more attractively priced [5] - VNT's PEG ratio is 1.37, compared to DUOL's PEG ratio of 2.60, indicating VNT's expected earnings growth is more favorable relative to its valuation [5] Group 2 - VNT has a P/B ratio of 4.9, while DUOL has a P/B ratio of 17.22, further highlighting VNT's relative undervaluation [6] - Based on various valuation metrics, VNT holds a Value grade of B, whereas DUOL has a Value grade of F, reinforcing VNT's position as the superior value option [6]

Core Insights - Vontier reported strong Q2 2025 results, with adjusted EPS of $0.79 exceeding expectations of $0.72 and revenue of $773.5 million surpassing the forecast of $734.5 million, indicating broad-based strength in its segments [1][2] - The company raised its full-year 2025 financial outlook but expressed caution regarding volume growth in the second half of the year due to mixed conditions in its portfolio [1][12] Financial Performance - Adjusted EPS increased by 25.4% year-over-year from $0.63 in Q2 2024 to $0.79 in Q2 2025 [2] - Revenue grew by 11.1% year-over-year from $696.4 million in Q2 2024 to $773.5 million in Q2 2025 [2] - Adjusted free cash flow surged by 241.7% year-over-year, rising from $25.9 million in Q2 2024 to $88.5 million in Q2 2025 [2] Business Segments - Mobility Technologies segment saw a 17.9% increase in sales, driven by demand for digital payment platforms and enterprise productivity software, with operating profit rising by 29.9% [5] - Environmental & Fueling Solutions reported a 16.2% sales increase and an 18.4% rise in operating profit, benefiting from investments in the convenience retail channel [6] - Repair Solutions segment experienced flat sales year-over-year, with a 2.2% decline in operating profit, reflecting macroeconomic pressures [7][8] Innovation and Strategy - Innovation is a key focus for Vontier, with successful new product introductions in digital payment and enterprise productivity solutions contributing to strong performance [9] - The company completed the acquisition of Sergeant Sudz, reinforcing its strategy of targeted growth and expanding into adjacent product areas [10] - Vontier is actively managing its supply chain to reduce exposure to China and mitigate tariff impacts [10] Outlook - Full-year 2025 adjusted diluted net EPS guidance increased to a range of $3.10 to $3.20, with revenue guidance set at $3.02 billion to $3.07 billion [11] - For Q3 2025, the company anticipates revenue of $745 million to $755 million, with flat core sales growth and adjusted diluted net EPS of $0.74 to $0.78 [11] - Management has communicated a cautious outlook for the second half of 2025, particularly regarding volume growth and demand in Repair Solutions and car wash systems [12]

Financial Data and Key Metrics Changes - The company reported sales of $774 million, an 11% increase year-over-year, with adjusted EPS rising 25% to $0.79, exceeding guidance [18][19] - Adjusted operating profit increased 15% year-over-year, with margin expansion of 80 basis points [6][19] - Free cash flow conversion was strong at 76% of adjusted net income, amounting to $89 million [19][28] Business Line Data and Key Metrics Changes - Environmental and Fueling Solutions (EFS) saw core growth of nearly 16%, with shipments of dispensers increasing over 20% [20] - Mobility Technologies core sales grew 18%, driven by strong performance at Invenco, while DRB sales declined in the teens [21] - Prepared Solutions sales were flat compared to the prior year, with ongoing market pressures affecting higher ticket product categories [22][24] Market Data and Key Metrics Changes - Orders were up 8% organically, with a book-to-bill ratio of approximately one [4][66] - The company noted strong demand in North America and Rest of the World, particularly in EFS and Mobility Technologies [20][21] Company Strategy and Development Direction - The company is focused on operational discipline and commercial excellence, with a three-pillar value creation framework [8][29] - There is an emphasis on innovation and new product development, with R&D investments around 6% of total sales [16] - The company is advancing its connected mobility strategy and optimizing its regional footprint to align resources with profitable regions [9][11] Management's Comments on Operating Environment and Future Outlook - Management raised full-year guidance, expecting adjusted EPS growth in the high single digits despite macro uncertainties [17][28] - The company remains confident in its growth trajectory, citing resilience in key end markets like convenience retail and fueling [17][29] - Management acknowledged tariff-related cost pressures but indicated progress in mitigation initiatives [10][28] Other Important Information - The company completed a bolt-on acquisition during the quarter and has ongoing share repurchases totaling $105 million in the first half [7][25] - The company is targeting a free cash flow conversion of approximately 100% for the year [28] Q&A Session Summary Question: Revenue outlook for Repair Solutions and EFS - Management indicated Repair Solutions is expected to decline mid to high single digits, while EFS is projected to grow mid single digits [36][37] Question: Margin outlook for Repair Solutions - Margins in Repair Solutions have stabilized, with potential for future expansion as market conditions improve [39][40] Question: Impact of shipment timing on revenue - Management confirmed a $15 million to $20 million benefit from shipment timing across EFS and Mobility Technologies [46][47] Question: Invenco's growth and recurring revenue - Invenco is expected to generate over $600 million in revenue this year, with about 40% of Mobility Technologies' revenue being recurring [50][51] Question: Impact of the Big Beautiful Bill on customers - The bill is expected to enhance free cash flow and provide benefits to customers through accelerated depreciation, though significant impacts may be seen next year [59][60] Question: Trends in the underground tank replacement cycle - Management noted early signs of growth in the underground business, supported by new product innovations [63][64] Question: Contribution of recent acquisition in the car wash space - The acquisition is strategic, enhancing the company's value proposition in the car wash sector, though its financial impact is relatively small [78][79]

Financial Data and Key Metrics Changes - The company reported sales of $774 million, an 11% increase both on a reported and core basis, with adjusted EPS increasing 25% to $0.79 [19][20] - Adjusted operating profit increased 15% year over year with margin expansion of 80 basis points [7][20] - Adjusted free cash flow of $89 million increased significantly versus the prior year, reflecting a strong 76% conversion to adjusted net income [20][28] Business Line Data and Key Metrics Changes - Environmental and Fueling Solutions delivered core growth of nearly 16%, with shipments of dispensers increasing over 20% in the second quarter [21] - Mobility Technologies core sales grew 18%, driven by strong performance at Invenco, while DRB sales declined in the teens year over year [22] - Prepared Solutions sales were flat compared to the prior year, with ongoing market pressures offsetting gains expected from the annual Matco Expo [23] Market Data and Key Metrics Changes - Orders were up 8% organically, with a book to bill ratio of approximately one in the quarter [5][67] - The company noted that 70% of its portfolio outperformed in the quarter, reflecting strong progress in resilient end markets [20] Company Strategy and Development Direction - The company is focusing on operational discipline and commercial excellence, supported by a three-pillar value creation framework [8][29] - There is an emphasis on innovation and new product development, particularly in connected mobility and environmental solutions [12][16] - The company is advancing an agreement to divest its European service business to optimize its regional footprint [10] Management's Comments on Operating Environment and Future Outlook - Management raised the full-year guidance for adjusted EPS to a high single-digit growth, despite expected tariff headwinds and macro uncertainties [18][28] - The company remains confident in its growth trajectory, supported by strong free cash flow and prudent capital allocation [29][30] Other Important Information - The company completed $50 million in share buybacks during the quarter, totaling $105 million in the first half of the year [25] - The company expects to fully mitigate tariff headwinds within the year, with significant progress made in Q2 [28] Q&A Session Summary Question: Revenue outlook for the second half, particularly for Repair Solutions - Management indicated a guide of down mid to high single digits for Repair Solutions, with signs of stabilization but still early to call an inflection [36][40] Question: Margin outlook for Repair Solutions - Margins have stabilized, with potential for improvement as higher-priced items start selling better and bad debt challenges stabilize [39][41] Question: Impact of shipment timing on EFS and Mobility Technologies - The company benefited from shipment timings of about $15 million to $20 million, with Mobility Technologies contributing approximately $5 million to $7 million [47] Question: Invenco's growth and revenue outlook - Invenco is expected to generate over $600 million in revenue this year, with strong growth anticipated despite tougher comparisons [50][52] Question: Recurring revenue base for Vontier - Approximately 40% of Mobility Technologies revenue is recurring, with Invenco at about 35% [52] Question: Customer conversations regarding the Big Beautiful Bill - The bill is expected to benefit free cash flow and may accelerate customer decisions, particularly for smaller operators [59][60] Question: Trends in the underground tank replacement cycle - The company sees early opportunities in the underground tank upgrade cycle, supported by new product innovations [63][64] Question: Month-to-month trends in Matco - Sellout was down 5% for the first half, but July showed improvement, indicating potential positive trends moving forward [84]

Q2 2025 | Earnings Results July 31, 2025 Safe Harbor and Forward-Looking Statements This presentation contains forward-looking statements within the meaning of the federal securities laws. These statements include, but are not limited to statements regarding Vontier Corporation's (the "Company's") business and acquisition opportunities, anticipated sales growth, anticipated adjusted operating margin expansion, anticipated adjusted net earnings per share, anticipated adjusted cash flow conversion, and antici ...

[Vontier Second Quarter 2025 Earnings Release](index=1&type=section&id=Vontier%20Reports%20Second%20Quarter%202025%20Results%20and%20Raises%20Full%20Year%20Outlook) [Financial Highlights](index=1&type=section&id=Financial%20Highlights) Vontier reported strong Q2 2025 results with sales up 11.1% to $773.5 million, driven by robust demand in retail and fueling solutions, leading to raised full-year guidance Q2 2025 Key Financial Metrics | Metric | Value | YoY Change | | :--- | :--- | :--- | | Reported Sales | $773.5 million | +11.1% | | Core Sales | - | +10.8% | | Operating Profit | $136.4 million | +19.5% | | Operating Profit Margin | 17.6% | +120 bps | | Adjusted Operating Profit | $163.4 million | +15.4% | | Adjusted Operating Profit Margin | 21.1% | +80 bps | | GAAP Diluted Net EPS | $0.62 | - | | Adjusted Diluted Net EPS | $0.79 | - | | Operating Cash Flow | $100 million | - | | Adjusted Free Cash Flow | $89 million | - | - Growth was fueled by strong demand for convenience retail payment, enterprise productivity solutions, and retail fueling equipment, which compensated for ongoing macroeconomic challenges affecting the repair solutions segment[3](index=3&type=chunk) - Due to strong first-half performance, the company has increased its full-year 2025 adjusted diluted net EPS guidance to a range of **$3.10 to $3.20**[5](index=5&type=chunk) [Segment Performance](index=2&type=section&id=Segment%20Results) Q2 2025 segment performance was mixed, with strong growth in Environmental & Fueling Solutions and Mobility Technologies, while Repair Solutions remained flat with margin contraction [Environmental & Fueling Solutions](index=2&type=section&id=Environmental%20%26%20Fueling%20Solutions) Environmental & Fueling Solutions sales grew 16.2% to $361.6 million, with operating profit margin expanding 50 bps to 29.2% due to strong volume and cost optimization Environmental & Fueling Solutions Q2 Performance | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Sales ($M) | $361.6 | $311.2 | +16.2% | | Segment Operating Profit ($M) | $105.7 | $89.3 | +18.4% | | Segment Operating Profit Margin | 29.2% | 28.7% | +50 bps | - Growth was primarily driven by strong demand for above-ground fuel dispensing equipment and environmental solutions[6](index=6&type=chunk) [Mobility Technologies](index=2&type=section&id=Mobility%20Technologies) Mobility Technologies sales increased 17.9% to $280.2 million, with operating profit margin improving 180 bps to 19.1% due to favorable volume and cost savings Mobility Technologies Q2 Performance | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Sales ($M) | $280.2 | $237.6 | +17.9% | | Segment Operating Profit ($M) | $53.5 | $41.2 | +29.9% | | Segment Operating Profit Margin | 19.1% | 17.3% | +180 bps | - The strong performance was attributed to high demand for convenience retail payment and enterprise productivity solutions, which was partially offset by anticipated lower demand for car wash technologies[7](index=7&type=chunk) [Repair Solutions](index=2&type=section&id=Repair%20Solutions) Repair Solutions sales were flat at $150.8 million, with operating profit margin declining 50 bps to 20.8% due to macroeconomic pressures on discretionary spending Repair Solutions Q2 Performance | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Sales ($M) | $150.8 | $150.8 | 0% | | Segment Operating Profit ($M) | $31.4 | $32.1 | -2.2% | | Segment Operating Profit Margin | 20.8% | 21.3% | -50 bps | - Performance was impacted by macroeconomic pressures affecting service technicians' discretionary spending, which was not fully offset by the 2025 Matco Expo performance[8](index=8&type=chunk) [2025 Outlook](index=3&type=section&id=2025%20Outlook) Vontier raised full-year 2025 adjusted diluted EPS guidance to $3.10-$3.20 and total sales to $3,020-$3,070 million, with Q3 adjusted diluted EPS projected at $0.74-$0.78 Full Year 2025 Outlook | Metric | Guidance | | :--- | :--- | | Total Sales | $3,020 to $3,070 million | | Core Sales Midpoint | Approx. +2% | | Adjusted Operating Profit Margin | Expansion of 20 to 40 bps YoY | | Adjusted Diluted Net EPS | $3.10 to $3.20 | | Adjusted Free Cash Flow Conversion | Approx. 100% | Q3 2025 Outlook | Metric | Guidance | | :--- | :--- | | Total Sales | $745 to $755 million | | Core Sales Midpoint | Approx. flat | | Adjusted Operating Profit Margin | Flat to down 50 bps YoY | | Adjusted Diluted Net EPS | $0.74 to $0.78 | [Other Corporate Items](index=3&type=section&id=Other%20Items) Vontier repurchased 1.4 million shares for $50 million in Q2, maintained a 2.5x net leverage ratio, and completed the Sergeant Sudz acquisition - Share Repurchase: The company bought back **~1.4 million shares** for **~$50 million** during Q2, with a year-to-date total of **$105 million**[12](index=12&type=chunk) - Financial Position: Ended Q2 with a net leverage ratio of **2.5x**[12](index=12&type=chunk) - Acquisition: Completed the acquisition of Sergeant Sudz[12](index=12&type=chunk) [Consolidated Financial Statements](index=6&type=section&id=Consolidated%20Financial%20Statements) Consolidated financial statements show Vontier's total assets at $4.38 billion, with Q2 net earnings of $91.9 million and six-month operating cash flow of $210.4 million [Consolidated Balance Sheets](index=6&type=section&id=Consolidated%20Balance%20Sheets) As of June 27, 2025, Vontier's total assets were $4.38 billion, total liabilities $3.17 billion, and stockholders' equity increased to $1.20 billion Key Balance Sheet Items (in millions) | Account | June 27, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Current Assets | $1,418.0 | $1,370.0 | | Total Assets | $4,375.8 | $4,310.5 | | Total Current Liabilities | $1,311.3 | $909.2 | | Total Liabilities | $3,167.0 | $3,250.6 | | Total Vontier Stockholders' Equity | $1,201.6 | $1,051.1 | [Consolidated Statements of Earnings](index=7&type=section&id=Consolidated%20Statements%20of%20Earnings) Q2 2025 sales increased to $773.5 million, with net earnings rising to $91.9 million, or $0.62 per diluted share, compared to Q2 2024 Q2 Earnings Summary (in millions, except per share) | Account | Three Months Ended June 27, 2025 | Three Months Ended June 28, 2024 | | :--- | :--- | :--- | | Sales | $773.5 | $696.4 | | Operating Profit | $136.4 | $114.1 | | Net Earnings | $91.9 | $70.1 | | Diluted EPS | $0.62 | $0.45 | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Six-month operating cash flow was $210.4 million, with $44.7 million used in investing and $174.6 million used in financing activities Six-Month Cash Flow Summary (in millions) | Account | Six Months Ended June 27, 2025 | Six Months Ended June 28, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $210.4 | $137.6 | | Net cash (used in) provided by investing activities | $(44.7) | $23.9 | | Net cash used in financing activities | $(174.6) | $(167.5) | | Ending balance of cash and cash equivalents | $364.2 | $331.3 | [Reconciliation of GAAP to Non-GAAP Financial Measures](index=10&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Financial%20Measures) This section reconciles GAAP to non-GAAP financial measures, detailing adjustments for amortization, restructuring, and currency impacts to provide a clearer view of underlying business performance [Components of Sales Growth](index=12&type=section&id=Components%20of%20Sales%20Growth) Q2 2025 total sales growth of 11.1% was primarily driven by 10.8% core sales growth, with minor positive impacts from currency and acquisitions Components of Sales Growth (% Change Q2 2025 vs. Q2 2024) | Component | Mobility Technologies | Repair Solutions | Environmental & Fueling Solutions | Total | | :--- | :--- | :--- | :--- | :--- | | Total Sales Growth (GAAP) | 17.9% | —% | 16.2% | 11.1% | | Core sales growth (Non-GAAP) | 17.8% | —% | 15.7% | 10.8% | [Reconciliation of Operating Profit to Adjusted Operating Profit](index=13&type=section&id=Reconciliation%20of%20Operating%20Profit%20to%20Adjusted%20Operating%20Profit) Q2 2025 GAAP Operating Profit of $136.4 million was adjusted to $163.4 million Non-GAAP Adjusted Operating Profit, primarily due to $19.2 million in amortization Operating Profit Reconciliation (Q2 2025, in millions) | Line Item | Amount | | :--- | :--- | | Operating Profit (GAAP) | $136.4 | | Amortization of acquisition-related intangible assets | $19.2 | | Restructuring- and divestiture-related adjustments | $2.6 | | Asbestos-related adjustments | $4.0 | | Other adjustments | $1.2 | | **Adjusted Operating Profit (Non-GAAP)** | **$163.4** | [Reconciliation of Net Earnings to Adjusted Net Earnings](index=14&type=section&id=Reconciliation%20of%20Net%20Earnings%20to%20Adjusted%20Net%20Earnings) Q2 2025 GAAP Net Earnings of $91.9 million ($0.62/share) were reconciled to Non-GAAP Adjusted Net Earnings of $116.7 million ($0.79/share) after pre-tax adjustments Net Earnings Reconciliation (Q2 2025, in millions) | Line Item | Amount | | :--- | :--- | | Net Earnings (GAAP) | $91.9 | | Pre-tax Non-GAAP adjustments | $27.0 | | Tax effect of adjustments | $(2.2) | | **Adjusted Net Earnings (Non-GAAP)** | **$116.7** | [Reconciliation of Operating Cash Flow to Free Cash Flow](index=15&type=section&id=Reconciliation%20of%20Operating%20Cash%20Flow%20to%20Free%20Cash%20Flow) Q2 2025 GAAP Operating Cash Flow of $100.0 million converted to $88.5 million Adjusted Free Cash Flow, resulting in a 75.8% conversion rate Free Cash Flow Reconciliation (Q2 2025, in millions) | Line Item | Amount | | :--- | :--- | | Operating Cash Flow (GAAP) | $100.0 | | Less: Capital expenditures | $(16.7) | | Free Cash Flow (Non-GAAP) | $83.3 | | Adjustments (Restructuring, etc.) | $5.2 | | **Adjusted Free Cash Flow (Non-GAAP)** | **$88.5** | [Net Leverage Ratio and Reconciliation to Adjusted EBITDA](index=16&type=section&id=Net%20Leverage%20Ratio%20and%20Reconciliation%20to%20Adjusted%20EBITDA) As of Q2 2025, Vontier's net leverage ratio was 2.5x, based on net debt of $1,736.8 million and LTM Adjusted EBITDA of $704.6 million Net Leverage Ratio Calculation (as of June 27, 2025) | Metric | Value (in millions) | | :--- | :--- | | Total Debt | $2,101.0 | | Less: Cash | $(364.2) | | Net Debt | $1,736.8 | | Adjusted EBITDA (LTM) | $704.6 | | **Net Leverage Ratio** | **2.5x** |

Core Insights - Vontier Corporation (VNT) and Duolingo, Inc. (DUOL) are both currently rated with a Zacks Rank of 2 (Buy), indicating positive earnings outlooks for both companies [3] - Value investors utilize various metrics to identify undervalued stocks, including P/E ratio, P/S ratio, earnings yield, and cash flow per share [4] Valuation Metrics - VNT has a forward P/E ratio of 12.25, significantly lower than DUOL's forward P/E of 138.78, suggesting VNT is more attractively priced [5] - The PEG ratio for VNT is 1.31, while DUOL's PEG ratio stands at 3.09, indicating VNT's expected earnings growth is more favorable [5] - VNT's P/B ratio is 5.01 compared to DUOL's P/B of 20.48, further supporting VNT's stronger valuation metrics [6] - Based on these valuation figures, VNT is rated with a Value grade of A, while DUOL has a Value grade of F, highlighting VNT as the superior value option [6]

Core Viewpoint - The article emphasizes the importance of value investing and highlights Vontier (VNT) as a strong candidate for value investors due to its attractive valuation metrics and earnings outlook [2][4][7] Company Analysis - Vontier (VNT) has a Zacks Rank of 2 (Buy) and an A grade for Value, indicating strong potential for value investors [4] - The Forward P/E ratio of VNT is 10.95, significantly lower than the industry average of 22.79, suggesting it is undervalued [4] - Over the past 12 months, VNT's Forward P/E has fluctuated between 8.65 and 12.96, with a median of 11.28 [4] - VNT's P/B ratio stands at 4.75, compared to the industry's average P/B of 6.65, further indicating its attractiveness [5] - The P/B ratio for VNT has ranged from 3.75 to 6.21 in the past 52 weeks, with a median of 5.12 [5] - VNT has a P/S ratio of 1.78, which is lower than the industry's average P/S of 1.9, reinforcing its undervalued status [6] Industry Context - The article discusses the broader trend of value investing, which focuses on identifying undervalued companies through traditional valuation metrics [2][3] - The Zacks Style Scores system is mentioned as a tool to identify stocks with specific traits, particularly in the Value category [3]

Core Insights - The article compares Vontier Corporation (VNT) and Duolingo, Inc. (DUOL) to determine which stock is more attractive to value investors [1] Valuation Metrics - VNT has a forward P/E ratio of 11.60, while DUOL has a significantly higher forward P/E of 163.72 [5] - VNT's PEG ratio is 1.24, indicating a more favorable valuation in relation to its expected earnings growth, compared to DUOL's PEG ratio of 3.64 [5] - VNT's P/B ratio stands at 4.75, whereas DUOL's P/B ratio is much higher at 24.31 [6] Investment Grades - Both VNT and DUOL have a Zacks Rank of 2 (Buy), indicating a positive earnings outlook due to favorable analyst estimate revisions [3] - VNT has been assigned a Value grade of B, while DUOL has received a Value grade of F, highlighting VNT's superior valuation metrics [6][7]