Core Viewpoint - Brokerage recommendations, particularly for Vertiv Holdings Co. (VRT), show a strong positive bias, with an average brokerage recommendation (ABR) of 1.18, indicating a consensus leaning towards "Strong Buy" [2][4] Group 1: Brokerage Recommendations - Vertiv has an ABR of 1.18, with 10 out of 11 recommendations classified as "Strong Buy," representing 90.9% of all recommendations [2] - Despite the favorable ABR, relying solely on brokerage recommendations may not be prudent, as studies indicate they often fail to guide investors effectively towards stocks with high price appreciation potential [4][9] - Brokerage analysts tend to exhibit a positive bias due to their firms' vested interests, leading to a disproportionate number of "Strong Buy" ratings compared to "Strong Sell" recommendations [5][9] Group 2: Zacks Rank Comparison - The Zacks Rank, a proprietary stock rating tool, categorizes stocks from 1 (Strong Buy) to 5 (Strong Sell) and is based on earnings estimate revisions, which are more reliable indicators of near-term stock price movements [7][10] - The Zacks Rank for Vertiv is 1 (Strong Buy), supported by a 2.7% increase in the Zacks Consensus Estimate for the current year, now at $2.42 [12][13] - The Zacks Rank is updated more frequently than the ABR, making it a timely tool for predicting future stock prices [11]

Erik Isakson Investment thesis Vertiv (NYSE:VRT) is one of the hottest stocks in the U.S. market right now, and its growth was mainly fueled by an AI and data centers mania. When I first saw that the stock rallied by 524% over the last twelve months, I thought that the stock was overhyped. However, when I delved into the company's financial and business analysis, I understood that the massive rally was well-deserved. Moreover, my valuation analysis suggests that the stock is still substantially underval ...

USA News Group Commentary Issued on behalf of Avant Technologies Inc. VANCOUVER, BC, May 7, 2024 /PRNewswire/ -- USA News Group – The rise of generative AI is currently adding considerable potential for accelerating economic growth across a wide array of sectors. In order to fully realize this potential, analysts at ING are highlighting how crucial investment in data and digital infrastructure will be moving forward. Citing estimates from Dell'Oro and Bank of America, ING has pointed out that investments fr ...

Growth stocks are attractive to many investors, as above-average financial growth helps these stocks easily grab the market's attention and produce exceptional returns. But finding a growth stock that can live up to its true potential can be a tough task.That's because, these stocks usually carry above-average risk and volatility. In fact, betting on a stock for which the growth story is actually over or nearing its end could lead to significant loss.However, it's pretty easy to find cutting-edge growth sto ...

Vertiv Holdings Co. (VRT) has been one of the most searched-for stocks on Zacks.com lately. So, you might want to look at some of the facts that could shape the stock's performance in the near term.Shares of this company have returned +14.5% over the past month versus the Zacks S&P 500 composite's -2% change. The Zacks Computers - IT Services industry, to which Vertiv belongs, has lost 4.6% over this period. Now the key question is: Where could the stock be headed in the near term?Although media reports or ...

[Part I - Financial Information](index=2&type=section&id=Part%20I%20-%20Financial%20Information) [Financial Statements (Unaudited)](index=2&type=section&id=Item%201.%20Financial%20Statements%20%28Unaudited%29) Vertiv's Q1 2024 net sales and operating profit grew, but a warrant liability loss led to a net loss, and cash decreased due to share repurchases [Condensed Consolidated Statements of Earnings (Loss)](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Earnings%20%28Loss%29) Q1 2024 net sales and operating profit increased, but a significant loss on warrant liabilities resulted in a net loss for the period Q1 2024 vs Q1 2023 Statement of Earnings Highlights | Metric | Three months ended March 31, 2024 | Three months ended March 31, 2023 | | :--- | :--- | :--- | | **Net sales ($ millions)** | $1,639.1 | $1,521.1 | | **Operating profit ($ millions)** | $202.6 | $130.3 | | **Change in fair value of warrant liabilities ($ millions)** | $176.6 (Loss) | ($4.2) (Gain) | | **Net income (loss) ($ millions)** | ($5.9) | $50.3 | | **Diluted EPS ($)** | ($0.02) | $0.12 | [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20%28Loss%29) The company reported a comprehensive loss in Q1 2024, driven by a net loss and negative foreign currency translation impacts Q1 2024 vs Q1 2023 Comprehensive Income (Loss) | Metric | Three months ended March 31, 2024 | Three months ended March 31, 2023 | | :--- | :--- | :--- | | **Net income (loss) ($ millions)** | ($5.9) | $50.3 | | **Other comprehensive income (loss) ($ millions)** | ($34.3) | $27.3 | | **Comprehensive income (loss) ($ millions)** | ($40.2) | $77.6 | [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets and equity decreased as of March 31, 2024, primarily due to a significant reduction in cash from share repurchases Balance Sheet Highlights (Mar 31, 2024 vs Dec 31, 2023) | Metric | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | **Cash and cash equivalents ($ millions)** | $275.8 | $780.4 | | **Total current assets ($ millions)** | $3,631.8 | $4,001.5 | | **Total assets ($ millions)** | $7,591.4 | $7,998.5 | | **Long-term debt, net ($ millions)** | $2,916.1 | $2,919.1 | | **Total liabilities ($ millions)** | $6,198.0 | $5,983.6 | | **Total equity ($ millions)** | $1,393.4 | $2,014.9 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities improved significantly in Q1 2024, but substantial share repurchases led to an overall decrease in cash Q1 2024 vs Q1 2023 Cash Flow Summary | Cash Flow Activity | Three months ended March 31, 2024 | Three months ended March 31, 2023 | | :--- | :--- | :--- | | **Net cash from operating activities ($ millions)** | $137.5 | $42.0 | | **Net cash used for investing activities ($ millions)** | ($36.5) | ($17.4) | | **Net cash used for financing activities ($ millions)** | ($603.1) | ($18.8) | | **Increase (decrease) in cash ($ millions)** | ($508.1) | $7.6 | - The primary use of cash in financing activities was a **$599.9 million** repurchase of common stock during Q1 2024[19](index=19&type=chunk) [Condensed Consolidated Statements of Changes in Shareholders' Equity (Deficit)](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Shareholders%27%20Equity%20%28Deficit%29) Total equity decreased in Q1 2024 due to common stock repurchases, a net loss, dividend payments, and other comprehensive losses - Key changes in shareholders' equity for Q1 2024 include a net loss of **$5.9 million**, a **$9.3 million** dividend payment, and a **$605.9 million** common stock repurchase[21](index=21&type=chunk) [Notes to Condensed Consolidated Financial Statements (Unaudited)](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20%28Unaudited%29) Notes detail revenue by segment, reduced restructuring costs, warrant liability impacts, and ongoing legal and regulatory inquiries Revenue by Segment (Q1 2024 vs Q1 2023) | Segment | Q1 2024 Net Sales ($ millions) | Q1 2023 Net Sales ($ millions) | | :--- | :--- | :--- | | **Americas** | $925.0 | $862.3 | | **Asia Pacific** | $332.3 | $313.0 | | **Europe, Middle East, & Africa** | $381.8 | $345.8 | | **Total** | $1,639.1 | $1,521.1 | - Restructuring costs decreased dramatically to **$0.3 million** in Q1 2024 from **$13.1 million** in Q1 2023[37](index=37&type=chunk) - The company recognized a loss of **$176.6 million** in Q1 2024 due to the mark-to-market adjustment on outstanding private warrants, driven by the increase in the company's stock price[52](index=52&type=chunk) - In November 2023, the company received a subpoena from the SEC and a document request from the U.S. Attorney's Office for the Southern District of New York related to allegations in a class action lawsuit[75](index=75&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=21&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes Q1 2024 sales growth to higher volumes and improved margins, despite a net loss from warrant liabilities, while investing in capacity and liquid cooling - The company is investing in capacity expansion to meet anticipated customer demand, driven in part by the increased adoption of AI and high-performance computing[86](index=86&type=chunk) - In December 2023, Vertiv acquired CoolTera Ltd. to strengthen its liquid cooling technology portfolio, targeting AI and other high-density compute requirements[86](index=86&type=chunk) Q1 2024 vs Q1 2023 Key Financial Results | Metric | Q1 2024 ($ millions) | Q1 2023 ($ millions) | % Change | | :--- | :--- | :--- | :--- | | **Net sales** | $1,639.1 | $1,521.1 | 7.8% | | **Gross profit** | $566.4 | $495.5 | 14.3% | | **Operating profit** | $202.6 | $130.3 | 55.5% | | **Net income (loss)** | ($5.9) | $50.3 | (111.7)% | [Results of Operations](index=24&type=section&id=Results%20of%20Operations) Q1 2024 net sales and gross profit margin improved, but a significant non-cash loss on warrant liabilities led to a net loss - Gross profit margin increased from **32.6%** to **34.6%** year-over-year, primarily due to higher sales volumes and pricing actions exceeding inflationary costs[90](index=90&type=chunk) - The change in fair value of warrant liabilities resulted in a loss of **$176.6 million** in Q1 2024, compared to a gain of **$4.2 million** in Q1 2023, significantly impacting the bottom line[93](index=93&type=chunk) - Net interest expense decreased by **$7.8 million (16.7%)** due to lower borrowings on the ABL facility and favorable settlements on interest rate swaps[94](index=94&type=chunk) [Business Segments](index=25&type=section&id=Business%20Segments) All three business segments reported strong Q1 2024 sales growth and improved operating margins, driven by higher volumes and pricing Americas Segment Performance (Q1 2024 vs Q1 2023) | Metric | Q1 2024 ($ millions) | Q1 2023 ($ millions) | | :--- | :--- | :--- | | **Net sales** | $925.0 | $862.3 | | **Operating profit** | $187.8 | $145.8 | | **Margin** | 20.3% | 16.9% | Asia Pacific Segment Performance (Q1 2024 vs Q1 2023) | Metric | Q1 2024 ($ millions) | Q1 2023 ($ millions) | | :--- | :--- | :--- | | **Net sales** | $332.3 | $313.0 | | **Operating profit** | $30.4 | $16.6 | | **Margin** | 9.1% | 5.3% | Europe, Middle East & Africa Segment Performance (Q1 2024 vs Q1 2023) | Metric | Q1 2024 ($ millions) | Q1 2023 ($ millions) | | :--- | :--- | :--- | | **Net sales** | $381.8 | $345.8 | | **Operating profit** | $70.3 | $46.1 | | **Margin** | 18.4% | 13.3% | [Capital Resources and Liquidity](index=27&type=section&id=Capital%20Resources%20and%20Liquidity) The company's liquidity is deemed adequate, with improved operating cash flow, but overall cash decreased due to significant share repurchases - The company expects full-year 2024 capital expenditures (including capitalized software) to be between **$175 million** and **$200 million**[106](index=106&type=chunk) - As of March 31, 2024, the company had **$275.8 million** in cash and cash equivalents and **$584.2 million** of availability under its ABL Revolving Credit Facility[109](index=109&type=chunk) Q1 2024 vs Q1 2023 Cash Flow Summary | Cash Flow Activity | 2024 ($ millions) | 2023 ($ millions) | | :--- | :--- | :--- | | **Net cash from operating activities** | $137.5 | $42.0 | | **Net cash used for investing activities** | ($36.5) | ($17.4) | | **Net cash used for financing activities** | ($603.1) | ($18.8) | [Quantitative and Qualitative Disclosures About Market Risk](index=28&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) There were no material changes in the company's market risk disclosures from its 2023 annual report - There were no material changes in market risk disclosures from the company's 2023 Annual Report on Form 10-K[116](index=116&type=chunk) [Controls and Procedures](index=28&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2024, with no material changes to internal controls - The CEO and CFO concluded that as of March 31, 2024, the company's disclosure controls and procedures were effective[118](index=118&type=chunk) - No changes occurred during the quarter ended March 31, 2024, that materially affected or are likely to materially affect the company's internal control over financial reporting[119](index=119&type=chunk) [Part II - Other Information](index=29&type=section&id=Part%20II%20-%20Other%20Information) [Legal Proceedings](index=29&type=section&id=Item%201.%20Legal%20Proceedings) Vertiv faces ongoing securities class action and derivative lawsuits, with related SEC and DOJ inquiries, and resolved a customs tax audit - A securities class action lawsuit (In re Vertiv Holdings Co Securities Litigation, 22-cv-3572) is pending, alleging false and misleading statements regarding inflation and supply chain pressures[121](index=121&type=chunk) - The company received a subpoena from the SEC and a parallel request from the U.S. Attorney's Office for the Southern District of New York in November 2023 related to the class action allegations[124](index=124&type=chunk) - A Mexican subsidiary paid approximately **$10.1 million** to resolve a customs tax audit in Q1 2024, and the company plans to seek reimbursement[125](index=125&type=chunk) [Risk Factors](index=31&type=section&id=Item%201A.%20Risk%20Factors) The company reports no material changes to its risk factors since its 2023 annual report filing - There have been no material changes to the company's risk factors since its 2023 Form 10-K filing[128](index=128&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=31&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company had no unregistered sales of equity securities but repurchased over 9 million shares under its $3.0 billion program in Q1 2024 - On November 29, 2023, the Board approved a stock repurchase program authorizing up to **$3.0 billion** in share repurchases through December 31, 2027[131](index=131&type=chunk) Issuer Purchases of Equity Securities (Q1 2024) | Period | Total Shares Purchased | Average Price Paid per Share ($) | Approx. Dollar Value Remaining ($ millions) | | :--- | :--- | :--- | :--- | | **Jan 1-31, 2024** | — | $— | $3,000.0 | | **Feb 1-29, 2024** | 8,512,587 | $66.06 | $2,437.6 | | **Mar 1-31, 2024** | 563,857 | $66.51 | $2,400.1 | [Defaults Upon Senior Securities](index=31&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reports no defaults upon senior securities - None[133](index=133&type=chunk) [Mine Safety Disclosures](index=31&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's operations - Not applicable[134](index=134&type=chunk) [Other Information](index=31&type=section&id=Item%205.%20Other%20Information) No director or officer adopted or terminated Rule 10b5-1 trading arrangements during Q1 2024 - No director or officer adopted or terminated a Rule 10b5-1 trading arrangement during the fiscal quarter[135](index=135&type=chunk) [Exhibits](index=32&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including certifications and financial data - Lists exhibits filed with the report, including certifications and XBRL data[137](index=137&type=chunk)

Financial Data and Key Metrics Changes - Q1 2024 sales increased by 8%, with adjusted operating profit reaching $249 million, a $73 million increase year-on-year, and adjusted operating margin improved by 370 basis points to 15.2% [11][13][34] - Adjusted free cash flow was $101 million, an improvement of $76 million from Q1 last year, and adjusted diluted EPS was $0.43, up $0.19 year-on-year [14][35] - Net leverage increased slightly to 2.2x due to share repurchases, but is expected to return to the targeted range of 1x to 2x by the end of 2024 [15][36] Business Line Data and Key Metrics Changes - Americas sales grew by 7%, driven by hyperscale and colocation, while APAC sales increased by 9%, with strong demand in India and low single-digit growth in China [37][38] - EMEA sales grew by 10%, with significant contributions from switchgear and bus bar products, and adjusted operating margin in EMEA expanded by 510 basis points to 18.4% [39] Market Data and Key Metrics Changes - The data center market is experiencing strong demand, particularly in North America, with a book-to-bill ratio of 1.5x indicating robust order growth [12][22] - The company anticipates continued strong order growth, although the 60% year-on-year order growth seen in Q1 is not expected to be the new norm [21][22] Company Strategy and Development Direction - The company aims to build a high-performance culture and differentiate itself through technology shifts in the data center industry, focusing on operational excellence and customer service [8][9] - Investments in capacity expansion are planned, with a CapEx estimate of $200 million for 2024 to support future growth [23][51] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the data center market and the company's positioning, particularly regarding AI-related orders and liquid cooling technology [17][25] - The company raised its full-year guidance for organic growth to approximately 12% and adjusted operating margins to 17.7% [48][49] Other Important Information - The company has a strong focus on thermal management and power solutions, with a complete offering to serve the data center market [28][29] - Supply chain resilience is being enhanced to support the deployment of liquid cooling technology [26] Q&A Session Summary Question: What's going on by region, particularly in China and India? - Management noted low single-digit growth in China and strong demand in India, indicating that India is becoming significant for APAC growth [56] Question: Can you discuss the incremental margins and their sustainability? - Management indicated that while incremental margins are expected to be in the high 30% range for 2024, sustaining this level may become more challenging in subsequent years [59][60] Question: How is the backlog aging and what is the outlook for on-prem versus hyperscale? - Management stated that the backlog has longer lead times, with a focus on hyperscale and colocation, while on-prem growth is still being monitored [142] Question: What is the relationship with NVIDIA and how is the company preparing for new technologies? - The relationship with NVIDIA involves engineering collaboration and certification of liquid cooling products, with preparations underway for higher power consumption technologies [139] Question: How is the company managing pricing and cost dynamics? - Management emphasized strengthened pricing strategies and the ability to react to material cost dynamics, maintaining a positive price/cost outlook [75][81]

The company's business is caught up in the AI wave.The rise of artificial intelligence (AI) is creating massive demand for new data centers, and with it demand for the companies serving the data centers.Vertiv (VRT 3.74%), one such company, easily beat quarterly expectations and its stock is up 10% as of noon ET as a result.Strong results, stronger ordersVertiv makes power management and cooling systems for data centers and communications hubs. Heat is a massive issue inside data centers and inadequate cool ...

Financial Performance - Q1 2024 - Net sales increased by approximately $118 million, reaching $16391 million, a 78% increase compared to Q1 2023, with organic growth of 81%[128, 163] - Adjusted operating profit rose by $73 million to $2486 million, a 42% increase from $1755 million in Q1 2023[61, 128] - Adjusted operating margin improved to 152%, up approximately 370 bps from 115% in Q1 2023[61, 128] - Adjusted free cash flow was $101 million, an increase of approximately $76 million from $246 million in Q1 2023[41] - Diluted EPS increased to $043, up from $024 in Q1 2023[76] Guidance and Outlook - Full-year net sales guidance raised by approximately $30 million to a range of $7540 million - $7690 million[24, 97] - Full-year adjusted operating profit guidance increased by approximately $50 million to a range of $1325 million - $1375 million[104] - Full-year adjusted free cash flow is expected to be approximately $825 million[36] - Second quarter 2024 net sales guidance is $1900 million - $1950 million, with adjusted operating profit guidance of $315 million - $335 million[123, 15] - Second quarter 2024 adjusted diluted EPS guidance is $053 - $057[15] Share Repurchase and Share Count - Approximately 9 million shares were repurchased in Q1 2024 at an average price of $66 per share, returning approximately $600 million to shareholders[4, 62] - Full-year diluted share count is forecasted to be approximately 388 million, lower than the prior guidance of approximately 393 million[4] - First quarter 2024 diluted share count was approximately 379 million[175] Customer Demand and Capacity - First quarter orders increased by approximately 60% compared to Q1 2023 and approximately 4% sequentially from Q4 2023, with a book-to-bill ratio of approximately 15x[35, 44] - Backlog at the end of Q1 2024 was $63 billion, up approximately 33% compared to the end of Q1 2023 and up 15% compared to year-end 2023[65] - The company is increasing capacity for switchgear, busway, and modular solutions, with an anticipated doubling of capacity through 2025[52]

Vertiv (NYSE:VRT) stock is in the rise today as investors celebrate the artificial intelligence (AI) boom helping out the data center cooling company’s business.The increase in demand for its data center cooling products resulted in a 60% increase year-over-year in orders during the company’s first quarter of 2024. That resulted in net sales climbing 8% higher to $1.64 billion. This beats out Wall Street’s estimate of $1.62 billion.Giordano Albertazzi, CEO of Vertiv, provided the following insight on the co ...