Vertiv VRT is expanding its data center power solutions portfolio with the launch of the Vertiv PowerUPS 9000 — a cutting-edge solution tailored for high-performance IT applications. Available in UL and CE models ranging from 250 to 1250kW, the compact UPS system offers up to 97.5% efficiency in the double-conversion mode.
This latest offering from Vertiv supports seamless installation with flexible cable entry options and built-in features like backfeed protection and ground fault kits, saving time and space.
With this latest addition, VRT’s product portfolio now caters to a broad spectrum of IT needs, from traditional computing to high-density environments. So, is this the right time for investors to start buying VRT shares?
Let’s dig deeper to find out.
VRT Stock Outperforms Sector
VRT shares have appreciated 166.8% in the year-to-date period, outperforming the Zacks Computer & Technology sector’s return of 30.6% and the Zacks IT Services industry’s growth of 16%.
VRT has outperformed industry peers over the same timeframe, including ServiceNow NOW and BigBear.ai BBAI, which have gained 49.6% and 32.2%, respectively.
YTD Performance
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Vertiv’s Strong Order Growth Drives 2024 View
VRT has been benefiting from strong growth and backlog. At the end of the third quarter of 2024, Vertiv hit a backlog of $7.4 billion, which increased 47% year over year and 5% sequentially. The quarterly results reflected continued order momentum. Organic orders (excluding foreign exchange) surged 19.2% year over year in the third quarter.
For the fourth quarter of 2024, Vertiv expects revenues between $2.12 billion and $2.17 billion, indicating an organic growth rate of 11-15% year over year. Non-GAAP earnings are expected to be between 80 cents and 84 cents per share.
The Zacks Consensus Estimate for fourth-quarter revenues is pegged at $2.15 billion, indicating year-over-year growth of 15.1%. The consensus mark for earnings is pegged at 83 cents per share, unchanged over the past 30 days and indicating 48.21% year-over-year growth.
For 2024, Vertiv expects revenues between $7.78 billion and $7.83 billion, indicating an organic growth rate of 13-15% year over year. Non-GAAP earnings are expected to be between $2.66 and $2.70 per share.
The Zacks Consensus Estimate for 2024 revenues is pegged at $7.82 billion, indicating year-over-year growth of 13.95%. The consensus mark for earnings is pegged at $2.69 per share, unchanged over the past 30 days and indicating 52% year-over-year growth.
Vertiv’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 10.13%.
Vertiv Holdings Co. Price and Consensus
Vertiv Holdings Co. price-consensus-chart | Vertiv Holdings Co. Quote
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Vertiv’s Expanding Capacity Supports Clientele Growth
Vertiv is expanding capacity across liquid cooling, thermal, UPS, switchgear, busbar and modular solutions to accommodate AI-driven demand growth. It currently has 23 manufacturing plants globally.
Vertiv has expanded its North American manufacturing operations with a 215,000 square feet (about 20,000 square meters) facility in Pelzer, SC, which supports production of integrated modular solutions, modular power systems and other integrated systems using Vertiv’s portfolio of power cooling and IT infrastructure technologies for data centers.
The company has expanded its liquid cooling portfolio with the CoolPhase CDU liquid-to-refrigerant coolant distribution unit and the CoolChip Fluid Network in-rack manifold.
These solutions expand VRT’s infrastructure offerings for data centers. The modular, cost-effective CDUs can be easily deployed in data centers that were not originally configured for liquid cooling. Hence, data centers can support high-density computing for AI alongside traditional air-cooled racks.
A rich partner base that includes the likes of Ballard Power Systems BLDP and ZincFive is expected to drive top-line growth.
Ballard Power and Vertiv are collaborating on developing backup power applications for data centers and critical infrastructures, scalable from 200kW to multiple MWs. VRT has integrated Ballard fuel cell power modules with Vertiv Liebert EXL S1 uninterruptible power system (UPS) within a successfully demonstrated proof of concept at Vertiv’s facility in Ohio.
Vertiv has added the ZincFive BC Series UPS battery cabinets to its portfolio of battery systems that are available for data center backup power.
VRT Shares Trade at a Premium
VRT stock is not so cheap, as its Value Score of D suggests a stretched valuation at this moment.
In terms of the trailing 12-month Price/Book ratio, VRT is trading at 26.52, higher than its median of 21.17 and the broader Zacks Computer & Technology sector’s 10.27.
Price/Book Ratio (TTM)
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What Should Investors Do With VRT Stock?
We believe Vertiv’s growing dominance in the thermal management space for data centers is a major growth driver.
VRT shares have been trading above the 50-day and 200-day moving averages, indicating a bullish trend.
Vertiv’s Shares Trade Above 50-Day & 200-Day SMA
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Its Growth Score of A makes the stock attractive for growth-oriented investors.
VRT currently carries a Zacks Rank #2 (Buy), suggesting that it may be wise for investors to start accumulating shares now. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Ballard Power Systems, Inc. (BLDP) : Free Stock Analysis Report
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