Key Takeaways VRT's organic orders grew 15% YoY and 11% sequentially in Q2, surpassing $3B for the first time.The backlog hit $8.5B, rising 21% YoY, with a 1.2x book-to-bill ratio showing sustained demand.The Americas led with mid-40% growth, APAC posted mid-30% gains, and EMEA saw high single-digit growth.Vertiv (VRT) is benefiting from strong organic order growth, which signals promising upside potential. In the second quarter of 2025, organic orders grew 15% year over year and 11% sequentially, surpassin ...

Core Insights - Vertiv (VRT) shares have increased by 1.1% following the release of its second-quarter 2025 results, driven by strong organic sales growth and robust performance across regional segments [1][10] - Year-to-date, Vertiv shares have risen by 28.4%, outperforming the broader Zacks Computer and Technology sector, which increased by 11.5% [2] Financial Performance - In the trailing 12 months, organic orders for Vertiv grew approximately 11%, with a book-to-bill ratio of 1.2 for Q2 2025, indicating strong future prospects [4] - The backlog increased by 7% sequentially and 21% year-over-year, reaching $8.5 billion [4] - For 2025, Vertiv expects revenues between $9.925 billion and $10.075 billion, with organic net sales growth projected at 23% to 25% [12] - For Q3 2025, revenues are anticipated to be between $2.510 billion and $2.590 billion, with organic net sales growth expected in the range of 20% to 24% [13] - The Zacks Consensus Estimate for Q3 2025 earnings is currently at 96 cents per share, reflecting a year-over-year increase of 26.32% [14] Strategic Partnerships - Vertiv has partnered with Oklo to co-develop advanced modular power and thermal management solutions for data centers powered by Oklo's nuclear reactors [6][7] - The collaboration aims to enhance energy efficiency and environmental performance in next-generation AI-driven data centers [7] - In May 2025, Vertiv expanded its portfolio with NVIDIA, aligning with NVIDIA's AI roadmap to deploy 800 VDC power architectures [8][11] Competitive Landscape - Despite its growth, Vertiv faces stiff competition from companies like Super Micro Computer and Hewlett-Packard Enterprise, which are enhancing their capabilities for AI data center deployments [16] - Super Micro Computer has seen a significant share price increase of 93.5% year-to-date, indicating strong competition in the market [17] Valuation - Vertiv is currently trading at a trailing 12-month Price/Book ratio of 20.81X, compared to the broader sector's 10.62X, suggesting it may be overvalued [18] Conclusion - Vertiv is experiencing growth driven by its strong product portfolio and strategic partnerships, but faces challenges from competition and valuation concerns [20]

Core Viewpoint - Vertiv (VRT) is expected to report strong second-quarter 2025 results, with revenues projected between $2.325 billion and $2.375 billion, reflecting significant organic sales growth driven by AI demand and strong performance in key regions [2][10]. Financial Expectations - Revenues for Q2 2025 are anticipated to be between $2.325 billion and $2.375 billion, with organic net sales growth expected in the range of 19% to 23% [2][10]. - The Zacks Consensus Estimate for second-quarter revenues is $2.28 billion, indicating a year-over-year growth of 16.60%, while the consensus for earnings is 83 cents per share, reflecting a 23.88% year-over-year growth [3]. Market Position and Performance - Vertiv has outperformed the Zacks Computer & Technology sector, gaining 19.3% year to date compared to the sector's 10.8% rise and the Computer IT Services industry's decline of 9.2% [7]. - The company has consistently beaten earnings estimates, with an average earnings surprise of 10.42% over the last four quarters [3]. Growth Drivers - The company is capitalizing on robust AI-driven order growth, particularly in thermal management solutions for data centers, which aligns with its strengths [4]. - Strong sales growth is expected across key regions, with a projected 5% sequential quarterly growth and 21% year-over-year growth in sales for Q2 2025, driven by performance in the Americas and APAC regions [5]. Product and Partnership Expansion - Vertiv's expanding portfolio includes energy-efficient solutions, such as the 142KW cooling and power reference architecture for NVIDIA's platform, enhancing its market offerings [6]. - The company has a rich partner base, including collaborations with NVIDIA and Oklo, which are key catalysts for growth in advanced power and thermal management solutions [6][18][19]. Valuation and Market Sentiment - Despite strong growth prospects, VRT's valuation appears stretched, with a price/book ratio of 18.71, significantly higher than the sector's average of 10.49 [10][13]. - The stock is currently trading above its 50-day and 200-day moving averages, indicating a bullish trend [11].

Core Insights - Vertiv (VRT) is showing strong upward momentum, trading above its 200-day and 50-day simple moving averages, indicating price stability and a long-term bullish trend [2][5] - The stock has gained 13% year-to-date, outperforming the broader Zacks Computer and Technology sector's increase of 6.1% and its closest peer, Eaton (ETN), which gained 7.6% [6] - Vertiv's extensive product portfolio and strong order growth, with organic orders increasing approximately 20% and a backlog of $7.9 billion, highlight its robust market position [7][9] Financial Performance - For 2025, Vertiv raised its revenue outlook to between $9.325 billion and $9.575 billion, with expected organic net sales growth of 16.5% to 19.5% [15] - The second-quarter 2025 revenue is projected to be between $2.325 billion and $2.375 billion, with organic net sales expected to increase by 19% to 23% [16] - The Zacks Consensus Estimate for Vertiv's 2025 revenues is pegged at $9.51 billion, suggesting an 18.71% year-over-year growth [18] Strategic Partnerships - Vertiv's partnership with NVIDIA is a key catalyst, enhancing its AI-ready cooling and power solutions for next-generation data centers [11][12] - The collaboration with Tecogen to offer advanced natural gas-powered chiller technology further strengthens Vertiv's portfolio [13][14] Valuation Metrics - Vertiv is currently trading at a trailing 12-month Price/Book ratio of 18.35X, significantly higher than the broader sector's 10.12X and Eaton's 7.53X [20] - Despite being overvalued, the company's strong portfolio and partner base justify its premium valuation [21]

Core Viewpoint - Vertiv (VRT) shares are currently considered overvalued with a Value Score of D, trading at a Price/Book ratio of 15.43X compared to the broader sector's 9.33X [1][2]. Financial Performance - Vertiv shares have declined 5% year to date (YTD), underperforming the sector's 1.7% decline, but outperforming the Zacks Computers - IT Services industry, which fell 7.5% YTD [3]. - For 2025, Vertiv expects revenues between $9.325 billion and $9.575 billion, with organic net sales growth projected at 16.5% to 19.5% [12]. - The Zacks Consensus Estimate for second-quarter 2025 revenues is $2.27 billion, indicating a year-over-year growth of 16.48% [14]. Product and Market Position - Vertiv benefits from a diverse product portfolio, including thermal systems, liquid cooling, UPS, and modular solutions, with organic orders growing approximately 20% in the trailing 12 months [4]. - The company has a strong backlog, which grew 10% sequentially and 25% year over year to $7.9 billion [4]. - Vertiv is expanding its portfolio through partnerships, including a collaboration with NVIDIA to support AI power solutions [7][8]. Competitive Landscape - Despite its strengths, Vertiv faces stiff competition from Eaton (ETN), which has invested over $8 billion in portfolio management and is advancing its sustainable energy solutions [16]. - Eaton has introduced new intelligent power management innovations, further intensifying competition in the market [17]. Investment Outlook - Given the macroeconomic uncertainties, competition, and stretched valuation, the recommendation is to hold Vertiv stock for now, awaiting a more favorable entry point [19].