Vertiv Shares Report Overvaluation Amid Macro Challenges

Vertiv (VRT) stock is currently characterized as overvalued, carrying a Value Score of D. The trailing 12-month Price/Book ratio stands at 15.43X, significantly higher than the Zacks Computer and Technology sector’s 9.33X.

Price/Book Ratio Insights

Image Source: Zacks Investment Research

Year-to-date (YTD), Vertiv shares have dropped 5%, underperforming the sector’s overall decline of 1.7%. This decline is driven by challenges in the macroeconomic landscape, including rising tariff uncertainties.

In contrast, Vertiv has outperformed the Zacks Computers – IT Services industry, which shows a YTD decline of 7.5%.

The company benefits from a diverse product portfolio, consisting of thermal systems, liquid cooling, UPS, switchgear, busbars, and modular solutions. Notably, organic orders increased by around 20%, with a book-to-bill ratio of 1.4 times for Q1 2025. The backlog also grew by 10% sequentially and 25% year-over-year to reach $7.9 billion.

YTD Performance Overview

Image Source: Zacks Investment Research

Expansion of Portfolio with NVIDIA

Vertiv is actively expanding its portfolio, recently aligning with NVIDIA (NVDA) to implement 800 VDC power architectures ahead of the NVIDIA Kyber and Rubin Ultra platforms.

This move aims to keep Vertiv one GPU generation ahead, offering scalable and efficient power solutions for future AI data centers.

The partnership underscores Vertiv’s dedication to addressing NVIDIA’s evolving computing needs through enhanced power and cooling infrastructure.

Strategic Collaborations Enhance Value

Vertiv’s extensive partner network, including Ballard Power Systems, Compass Datacenters, NVIDIA, Intel, ZincFive, and Tecogen (TGEN), serves as a significant growth driver.

In March 2025, Vertiv announced a collaboration with Tecogen to introduce advanced natural gas-powered chiller technology for global data centers. This technology aims to alleviate power constraints and support large-scale AI deployment.

Updated Revenue Guidance for 2025

For 2025, Vertiv anticipates revenues between $9.325 billion and $9.575 billion, with organic net sales growth projected at 16.5% to 19.5%.

Non-GAAP earnings per share are estimated between $3.45 and $3.65. Previously, revenue expectations were set between $9.125 billion and $9.275 billion, with organic sales growth between 15% and 17%. Non-GAAP earnings were projected at $3.50 to $3.60 per share.

For the second quarter of 2025, revenue estimates are between $2.325 billion and $2.375 billion, with organic sales growth anticipated between 19% to 23% and non-GAAP earnings per share between 77 cents and 85 cents.

Earnings Estimates Remain Stable

The Zacks Consensus Estimate for Vertiv’s Q2 2025 revenues is $2.27 billion, indicating year-over-year growth of 16.48%. The estimated earnings are 82 cents per share, suggesting a 22.39% increase year-over-year.

For 2025, projected revenues are about $9.51 billion, signifying growth of 18.71% year-over-year. The forecasted non-GAAP earnings per share stand at $3.55, reflecting a 24.56% increase compared to 2024.

Vertiv Holdings Co. Price and Consensus

Vertiv Holdings Co. price-consensus-chart | Vertiv Holdings Co. Quote

Encountering Significant Competition

Despite its growth, Vertiv faces intense competition, particularly from Eaton (ETN), which is advancing in sustainable energy solutions and expanding its market share. Eaton has invested over $8 billion in transformative portfolio strategies, reinforcing its industry standing.

The pressure on Vertiv further escalates as Eaton introduces new intelligent power management solutions designed for enhanced energy efficiency.

Conclusion: Hold Vertiv Stock

Vertiv is supported by a robust product portfolio and strategic partnerships. Yet, macroeconomic uncertainties and heightened competition present notable risks. The current Zacks Rank for VRT is #3 (Hold), suggesting investors should wait for a more favorable entry point.