Waltham, Massachusetts-based Veralto Corporation (VLTO) provides water analytics, water treatment, marking and coding, and packaging and color services worldwide. With a market cap of $25.8 billion, Veralto operates through the Water Quality (WQ) and Product Quality & Innovation (PQI) segments.
Companies worth $10 billion or more are generally described as "large-cap stocks," Veralto fits this bill perfectly. The company operates 13 businesses across more than 300 global locations, employing over 16,000 associates. Given its extensive operations and large workforce, its valuation above this mark is not surprising. As a global leader in essential technology solutions, Veralto has a proven track record of addressing some of the most complex societal challenges.
Veralto recently touched its 52-week high of $115.00 on Oct. 24 and is currently trading 9.4% below that peak. VLTO stock has dipped 5.3% over the past three months, significantly underperforming the Nasdaq Composite’s ($NASX) 12.7% gains over the same time frame.
However, over the longer term, Veralto’s performance looks much more impressive. VLTO has surged 26.7% on a YTD basis and 34.1% over the past 52 weeks compared to NASX’s 32.7% gains in 2024 and 35.2% returns over the past year.
To confirm the overall bullish trend and the recent downturn, VLTO has consistently traded above its 200-day moving average over the past months and below its 50-day moving average since late October with minor fluctuations.
Despite reporting better-than-expected results, Verlato stock plunged 4.6% after the release of its Q3 earnings on Oct. 23. The company reported a notable 4.7% year-over-year growth in sales, reaching $1.3 billion, exceeding analysts’ estimates. Meanwhile, its adjusted EPS soared 18.7% year-over-year to $0.89, which surpassed Wall Street’s expectations by 3.5%. However, Veralto has continued to report a drop in cash flows. While its operating cash flows have dropped 7.8% year-over-year to $224 million, its free cash flows have declined 7.3% compared to the year-ago quarter to $215 million, which has raised concerns about the company’s ability to convert earnings into cash, making investors jittery.
Veralto has also lagged behind its peer Zurn Elkay Water Solutions Corporation’s (ZWS) 35.2% gains on a YTD basis and 35.6% returns over the past year.
Nevertheless, observing Veralto’s disciplined expense management and robust margin expansions, analysts remain optimistic about the stock’s prospects. The stock has a consensus “Moderate Buy” rating among the 14 analysts covering it. The mean price target of $115.46 suggests a 10.8% upside potential from current price levels.
On the date of publication, Aditya Sarawgi 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. More news from Barchart- Is Palantir Stock a Buy Now?
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