VRT Jumps 36% in 6 Months: How Should You Approach the Stock in 2025?

Stock Performance - Vertiv (VRT) shares surged 36.1% over the trailing six months, outperforming the Zacks Computer and Technology sector's 2.8% appreciation and the Zacks Computers – IT Services industry's 19.5% return [1] - VRT outperformed peers like Stem (7%) and DXC Technology (6%) over the same period [1] - The stock is trading above the 50-day and 200-day moving averages, indicating a bullish trend [4][5] Financial Estimates - The Zacks Consensus Estimate for VRT's 2025 earnings is $3.58 per share, unchanged over the past 30 days, indicating 33.2$9.20 billion, reflecting 17.61% YoY growth [7] - VRT beat the Zacks Consensus Estimate in each of the trailing four quarters, with an average earnings surprise of 10.13% [7] Product Portfolio Expansion - VRT's product portfolio includes thermal systems, liquid cooling, UPS, switchgear, busbar, and modular solutions [9] - The launch of the Vertiv PowerUPS 9000, offering up to 97.5% efficiency, expanded its data center power solutions portfolio [9] - VRT introduced the CoolPhase CDU and CoolChip Fluid Network, enabling liquid cooling in data centers not originally configured for it [10] - The acquisition of centrifugal chiller technologies from BiXin Energy Technology enhanced VRT's chiller portfolio for high-performance computing and AI [11] Strategic Partnerships - VRT has partnerships with Ballard Power Systems, Compass Datacenters, NVIDIA, Intel, and ZincFive [12] - Collaboration with NVIDIA involves co-developing power and cooling reference designs for the NVIDIA GB200 NVL72 platform [12] - VRT and Compass Datacenters are developing a flexible cooling solution for AI and high-density computing, set for deployment in early 2025 [13] - VRT added ZincFive BC Series UPS battery cabinets to its data center backup power portfolio [13] Competitive Landscape - VRT faces fierce competition in the liquid cooling market, with established players like Johnson Controls International introducing innovative HVAC products [14][15] - Persistent inflation has driven up VRT's operating and logistical costs, with total cost of sales increasing 18.1% YoY to 1.32 billion in Q3 2024 [15][16] - SG&A expenses increased 2.3% YoY to 334.6 million in Q3 2024 [16] Valuation - VRT's Value Score of D suggests a stretched valuation [16] - The trailing 12-month price/book ratio of 26.01 is higher than its median of 22.17 and the broader sector's 10.73 [16][17]