By their very nature, these stocks carry above-average risk and volatility. Moreover, if a company's growth story is over or nearing its end, betting on it could lead to significant loss. Vertiv Holdings Co. (VRT) is one such stock that our proprietary system currently recommends. The company not only has a favorable Growth Score, but also carries a top Zacks Rank. Earnings Growth While the historical EPS growth rate for Vertiv is 72.6%, investors should actually focus on the projected growth. The company's ...

Analysts' growing optimism over the company's earnings prospects, as indicated by strong agreement among them in revising EPS estimates higher, could be a legitimate reason for the stock to soar in the near term. 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? Before we discuss the reliability of brok ...

Core Viewpoint - Vertiv Holdings Co. is currently experiencing a decline in stock performance despite positive earnings expectations, with a premium valuation compared to industry averages [1][2][3][4]. Valuation Metrics - The company is trading at a Forward P/E ratio of 35.89, which is higher than the industry's average Forward P/E of 26.59 [1]. - Vertiv Holdings Co. has a PEG ratio of 1.27, significantly lower than the average PEG ratio of 2.92 for the Computers - IT Services industry [7]. Stock Performance - The stock closed at $86.88, reflecting a slight decrease of -0.15% from the previous session, underperforming compared to the S&P 500's gain of 0.09% [2]. - Over the past month, shares have decreased by 15.7%, contrasting with a 6.18% gain in the Computer and Technology sector and a 3.38% gain in the S&P 500 [2]. Earnings Expectations - The upcoming earnings report is expected to show an EPS of $0.59, representing a 28.26% increase year-over-year, with revenue anticipated at $1.94 billion, a 12.1% increase from the previous year [3]. - For the full year, earnings are projected at $2.42 per share and revenue at $7.72 billion, indicating increases of 36.72% and 12.46%, respectively, from the prior year [4]. Analyst Sentiment - Recent changes in analyst estimates are crucial for understanding the company's business outlook, with positive revisions seen as favorable [4]. - Vertiv Holdings Co. currently holds a Zacks Rank of 2 (Buy), indicating a positive outlook based on estimate changes [6]. Industry Context - The Computers - IT Services industry is ranked 98 in the Zacks Industry Rank, placing it in the top 39% of over 250 industries, suggesting strong performance potential [8].

Core Insights - The article discusses the investment landscape and highlights the importance of understanding market dynamics and company fundamentals [1] Group 1 - The article emphasizes the significance of thorough research in identifying potential investment opportunities [1] - It mentions that market trends can significantly impact stock performance, necessitating a keen analysis of economic indicators [1] - The role of financial disclosures and transparency in assessing company health is underscored [1] Group 2 - The article points out that investor sentiment can influence stock prices, making it crucial to gauge market psychology [1] - It highlights the need for diversification in investment portfolios to mitigate risks associated with market volatility [1] - The importance of staying updated with industry news and developments is stressed as a means to make informed investment decisions [1]

Coming into today, shares of the company had lost 10.62% in the past month. In that same time, the Computer and Technology sector gained 6.77%, while the S&P 500 gained 3.15%. For the annual period, the Zacks Consensus Estimates anticipate earnings of $2.42 per share and a revenue of $7.72 billion, signifying shifts of +36.72% and +12.46%, respectively, from the last year. Our research shows that these estimate changes are directly correlated with near-term stock prices. To utilize this, we have created the ...

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Parkev Tatevosian is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool. Parkev Tatevosian, CFA has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. ...

Core Insights - The article discusses the potential financial benefits of subscribing to services promoted by Parkev Tatevosian, highlighting that he may receive compensation for such promotions [1] Group 1 - Parkev Tatevosian is affiliated with The Motley Fool and may earn extra income through subscriptions made via his promotional links [1] - His opinions on stocks remain independent and are not influenced by The Motley Fool [1] - The Motley Fool does not hold positions in any of the stocks mentioned in the article [1]

Core Viewpoint - The strategic partnership between Ballard Power Systems and Vertiv aims to address the increasing power demands of data centers by providing scalable, zero greenhouse gas emission fuel cell backup power solutions, which are essential for achieving net-zero targets in the energy-intensive sector [1][12]. Company Overview - Ballard Power Systems focuses on delivering zero-emission PEM fuel cells for various applications, including mobility and stationary power, contributing to a sustainable planet [10]. - Vertiv provides critical digital infrastructure and continuity solutions, integrating hardware, software, and services to support data centers and commercial facilities globally [5][12]. Product Details - The Vertiv Power Module H2 is designed to meet the rising energy demands of future data centers, offering a prefabricated, factory-tested system that can be rapidly deployed and scaled [2][6]. - The Power Module H2 integrates Ballard's 200kW fuel cell cabinets with Vertiv's energy management systems, providing a complete solution for decarbonized backup power [6][7]. Industry Context - The increasing adoption of artificial intelligence and high-performance computing is driving the demand for eco-friendly power solutions, emphasizing the need for zero-carbon and low-carbon energy alternatives [8]. - The partnership and the Power Module H2 solution align with the industry's shift towards sustainable practices and the "One Vertiv, One World" plan, which aims to foster a more sustainable future [9]. Demonstration and Validation - Vertiv and Ballard will showcase their fuel cell-powered standby power applications at Smarter E Europe 2024, highlighting the technical feasibility and customer benefits of hydrogen-powered solutions [3][8]. - Initial tests have confirmed the successful operation of zero GHG emission backup power integrated into an uninterruptible power architecture, demonstrating the viability of this technology [13].

Core Insights - VRT has shown significant bottom-line improvements attributed to gross margins of 34.5% (+2 points YoY) and adjusted operating margins of 15.1% (+3.6 points YoY) due to better supply chain conditions and higher average selling prices (ASPs) [1][2] - The company has raised its FY2024 guidance, projecting net sales of $7.61B (+11.9% YoY), adjusted operating margin of 17.5% (+2.2 points YoY), and adjusted EPS of $2.32 (+31% YoY) [2] - VRT is well-positioned to fund growth opportunities internally, with free cash flow generation of $10 million (+30% YoY) and FY2024 free cash flow guidance of $825 million (+6% YoY) [3] Financial Performance - VRT's FQ1'24 earnings reported net sales of $1.63B (+7.2% YoY) and adjusted EPS of $0.43 (+79.1% YoY), driven by strong product sales and SaaS revenues [7] - The backlog has grown from $5.52B in FQ423 to $6.3B in FQ1'24, with a book-to-bill ratio of 1.5x, indicating strong demand [9] - The company has raised its FY2024 capex guidance to $200 million (+56.3% YoY) to enhance manufacturing capacity [16] Market Position and Trends - VRT operates in the data center infrastructure sector, focusing on power management and thermal management solutions, which are critical during the ongoing cloud transition and AI boom [6] - The company has strategic partnerships with major tech firms like Nvidia and Intel, which are expected to drive future growth [6][7] - International demand remains strong, particularly in the APAC and EMEA regions, with product sales and SaaS revenues showing positive growth [8] Valuation and Growth Projections - VRT's forward EV/EBIT valuation is 26.83x, significantly higher than the sector median of 15.44x, reflecting market optimism [18] - Consensus estimates suggest VRT will achieve a CAGR of +12% in revenue and +30.3% in adjusted EPS through FY2026 [19] - The company has a relatively higher net-debt-to-EBITDA ratio of 2.44x, which may pose risks despite its strong cash flow generation [13] Investment Considerations - VRT's stock has shown potential for capital appreciation, with a long-term price target of $149.90 based on consensus FY2026 adjusted EPS estimates [21] - The company offers quarterly dividends, providing a decent income stream for investors [21] - Recent insider selling has occurred, with $1.62B of shares sold in the last twelve months, balanced by management's share repurchases [21]