Vertiv Holdings is all set to announce its fourth-quarter 2023 results on Feb 21, prior to the market open.
The company has projected its fourth-quarter revenues to be in the range of $1.83-$1.85 billion. The Zacks Consensus Estimate puts the top line at $1.89 billion, indicating an impressive 14.1% year-over-year growth.
Vertiv is expecting adjusted earnings per share to fall between 48 cents and 52 cents. The consensus estimate stands at 54 cents per share, reflecting a substantial 92.86% surge from the year-ago quarter.
For Q4 2023, the company foresees adjusted operating income to be in the range of $295 million to $305 million, suggesting a margin of 15.9-16.7%. Notably, Vertiv has surpassed the Zacks Consensus Estimate in three of the last four quarters, with an average surprise of 27.8%.
Factors Influencing the Results
The expected revenue growth in the fourth quarter is likely to be driven by a growing customer base, supported by the heightened demand for Vertiv’s cloud-based solutions in the ongoing digital transformation era. Furthermore, the company’s global expansion outside the Americas is anticipated to have impacted its fourth-quarter revenues positively. In the third quarter, the Americas, EMEA, and APAC accounted for 57.6%, 20.1%, and 22.3% of the total revenues, respectively.
The robust demand for its hardware, software, and analytics solutions is expected to have propelled Vertiv’s performance in Q4. Additionally, sustained benefits from pricing and significant investments across various end markets, including artificial intelligence and data centers, are projected to have further supported the company’s growth in the to-be-reported quarter.
While the company is anticipated to have witnessed an improvement in operational execution and supply-chain flow during the quarter, its bottom-line performance may have been affected by substantial exposure to material, freight, and labor inflation, along with ongoing investments in research and development.
Earnings Projections
Our proven model predicts a positive earnings surprise for Vertiv this season, driven by a favorable combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold).
Earnings ESP: The Earnings ESP, representing the variance between the Most Accurate Estimate and the Zacks Consensus Estimate, currently stands at +1.90%. This suggests a potential earnings beat for the company.
Zacks Rank: Vertiv currently holds a Zacks Rank #2.
Comparative Analysis
Among other companies, Inseego, Cogent Communications, and NVIDIA also exhibit a positive combination of elements for potential earnings surprises in their upcoming releases.
Inseego has an Earnings ESP of +4.17% and holds a Zacks Rank #2 at present. Notably, the company is scheduled to report its fourth-quarter fiscal 2023 results on Feb 21 and has been able to surpass the Zacks Consensus Estimate twice in the last four quarters. However, it missed expectations in the other two occasions, resulting in an average negative surprise of 150.42%.
Conclusion
These forecasts indicate an exciting time for Vertiv and its investors. As the company’s Q4 earnings report approaches, the growing customer base and the increasing demand for its cloud-based and digital solutions mark a promising outlook, potentially leading to another successful earnings beat. Investors who have been watching Vertiv’s performance keenly are in for an eagerly awaited announcement that will likely offer a glimpse into the company’s potential trajectory in the coming year.
