Vertiv Prepares for Q4 2024 Earnings Release on February 12
Vertiv VRT is preparing to announce its fourth-quarter 2024 results on February 12. Stay informed with the latest EPS estimates and surprises on Zacks Earnings Calendar.
For this period, Vertiv forecasts revenues between $2.115 billion and $2.165 billion, which reflects an organic growth rate of 11-15% compared to last year.
Additionally, the company anticipates non-GAAP earnings ranging from 80 cents to 84 cents per share for the quarter.
Overview of Vertiv Holdings Co.’s Price and EPS Surprise
Vertiv Holdings Co. price-eps-surprise | Vertiv Holdings Co. Quote
The Zacks Consensus Estimate predicts fourth-quarter revenues at $2.15 billion, marking a growth of 15.37% compared to the same period last year. The earnings consensus is set at 84 cents per share, showing a 50% increase year-over-year, and has remained unchanged for the past month.
Vertiv has successfully beaten the Zacks Consensus Estimate in all of the last four quarters, achieving an average earnings surprise of 10.13%.
Key Factors Influencing Vertiv’s Q4 Results
Vertiv, known for its cooling and power management infrastructure, primarily caters to data center operators. The company has capitalized on a strong surge in AI-driven orders. This trend aligns with the rising need for effective thermal management solutions in data centers, positioning Vertiv to satisfy increased demand with innovative offerings.
The expected results for Q4 2024 should reflect the growing need for Vertiv’s cooling and power management infrastructure. Their strong performance in AI-driven orders and the focus on thermal management by data center providers are significant factors supporting Vertiv.
As of the end of Q3 2024, Vertiv’s backlog reached $7.4 billion, with organic orders up 19.2% year-over-year and a book-to-bill ratio of 1.1 times.
VRT Outperforming Its Sector and Industry
Over the last year, Vertiv shares have risen by 98%, significantly outpacing the Zacks Computer & Technology sector’s growth of 20.7% and the Zacks Computer IT Services industry’s returns of 7.8%.
Performance Overview of VRT Stock
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Despite its impressive gains, Vertiv stock does exhibit a stretched valuation, reflected by a Value Score of D. Currently, VRT is trading at a forward 12-month Price/Earnings (P/E) ratio of 32.94X, exceeding its median of 32.81X and the sector’s 26.52X.
Analysis of Price/Earnings (P/E) Ratio
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Vertiv Expands Capacity to Meet Client Needs
To support growth driven by AI demand, Vertiv is enhancing its capacity in areas such as liquid cooling and thermal management solutions. The company operates 23 manufacturing plants worldwide.
Notably, Vertiv has expanded its North American operations with a new facility covering 215,000 square feet (about 20,000 square meters) in Pelzer, SC. This facility will produce integrated modular solutions and power systems tailored for data center infrastructure.
The introduction of new solutions like the CoolPhase CDU liquid-to-refrigerant system and the CoolChip Fluid Network improves Vertiv’s offerings. These systems are flexible and can be integrated into existing data centers, supporting high-density computing essential for AI applications.
Additionally, Vertiv recently collaborated with NVIDIA NVDA to develop a 7MW reference architecture aimed at enhancing AI data center platforms, enabling optimized power and cooling configurations.
Robust Partnerships Enhance Vertiv’s Market Position
A strong network of partnerships with companies such as Ballard Power Systems BLDP, Compass Datacenters, NVIDIA, Intel, and ZincFive further strengthens Vertiv’s standing in the market.
In partnership with Ballard Power, Vertiv is working on backup power solutions for data centers and critical infrastructures. Recently, they successfully demonstrated a proof of concept using integrated Ballard fuel cell modules and Vertiv’s uninterruptible power systems.
The addition of ZincFive’s BC Series UPS battery cabinets to Vertiv’s offerings reflects the company’s commitment to providing comprehensive backup power solutions for data centers.
Challenges Ahead: Competition and Valuation Concerns
While experiencing growth in the competitive liquid cooling sector vital for AI, Vertiv faces intense competition that may affect its future performance.
Considering its current valuation and moderate growth outlook, investing in VRT could be risky. Currently, Vertiv holds a Zacks Rank #3 (Hold), suggesting that investors may benefit from waiting for a better entry point in the stock.
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The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
