Vertiv Holdings: Strong Performance and Positive Outlook Justify Buy Rating

Goldman Sachs analyst Mark Delaney has maintained their bullish stance on VRT stock, giving a Buy rating on April 18.

Mark Delaney’s Buy rating is based on a mix of strong performance indicators and promising forward-looking statements from Vertiv Holdings. The company’s reported revenue and adjusted EPS for the first quarter of 2024 both exceeded Wall Street expectations, and Vertiv has also raised its revenue, EBIT, and adjusted EPS guidance for the full year, signaling confidence in its future performance. Moreover, the significant year-over-year growth in orders, driven by the demand for AI applications, and a record high backlog demonstrate the potential for sustained growth beyond the current year.

Additionally, Delaney’s optimism is further bolstered by Vertiv’s improved operational efficiency, as evidenced by the anticipated incremental EBIT margins, which are significantly high at the midpoint of guidance. This efficiency could lead Vertiv to achieve its ambitious 20% target EBIT margin on a quarterly basis before the year 2026. The company’s free cash flow and proactive capital allocation, including a substantial stock repurchase in the first quarter, are also viewed as positive factors supporting the Buy rating.

In another report released on April 18, Bank of America Securities also assigned a Buy rating to the stock with a $90.00 price target.

Based on the recent corporate insider activity of 53 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of VRT in relation to earlier this year.

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Vertiv Holdings (VRT) Company Description:

Vertiv Holdings Co. engages in the design, manufacturing, and servicing of critical digital infrastructure technology that powers, cools, deploys, secures and maintains electronics that process, store and transmit data. It also offers power management products, thermal management products, integrated rack systems, modular solutions, and management systems for monitoring and controlling digital infrastructure. It carries out its operations in the following geographical segments: Americas, Asia Pacific, and EMEA. The company was founded on February 7, 2020 and is headquartered in Columbus, OH.