With a market cap of $24.3 billion, Waltham, Massachusetts-based Veralto Corporation (VLTO) provides technology solutions focused on water and product quality worldwide. Serving industries like municipal utilities, food and beverage, pharmaceuticals, and industrials, Veralto operates under well-known brands such as Hach, Trojan Technologies, ChemTreat, Videojet, Esko, X-Rite, and Pantone.
Companies valued at $10 billion or more are generally classified as “large-cap” stocks, and Veralto fits this criterion perfectly. Operating through its Water Quality (WQ) and Product Quality & Innovation (PQI) segments, the company offers precision instrumentation, water treatment technologies, marking and coding systems, packaging design software, and color management solutions.
Shares of the water and product quality services provider are trading 15.6% below its 52-week high of $115. VLTO has decreased 7.2% over the past three months, lagging behind the broader Dow Jones Industrials Average’s ($DOWI) 3% dip over the same time frame.
In the longer term, Veralto stock is down nearly 5% on a YTD basis, underperforming DOWI’s 2.3% decrease. However, shares of VLTO have increased 7.7% over the past 52 weeks, outperforming DOWI’s 4.5% return over the same time frame.
VLTO has been trading below its 50-day moving average since late October last year. Also, the stock has fallen below its 200-day moving average since February.
Despite Veralto’s better-than-expected Q4 2024 adjusted EPS of $0.95 and revenue of $1.3 billion, shares dipped 5.1% the next day due to cautious 2025 guidance projecting only low- to mid-single-digit core sales growth. Management flagged continued weakness in China, where geopolitical tensions impacted sales. Additionally, Veralto’s long-term debt remained high at $2.6 billion, and R&D spending surged 21% year-over-year to $69 million, signaling potential pressure on margins.
Veralto has outperformed its rival, Zurn Elkay Water Solutions Corporation (ZWS), which has gained 1.1% over the past 52 weeks and saw a 10.9% decline on a YTD basis.
Despite VLTO’s outperformance over the past year, analysts remain cautiously optimistic about its prospects. The stock has a consensus rating of “Moderate Buy” from the 14 analysts covering the stock, and as of writing, it is trading below the mean price target of $112.31.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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