VERTIV HOLDINGS CO-A (VRT) Stock Fundamental Analysis
NYSE:VRT - New York Stock Exchange, Inc. - US92537N1081 - Common Stock - Currency: USD
We assign a fundamental rating of 7 out of 10 to VRT. VRT was compared to 97 industry peers in the Electrical Equipment industry. While VRT belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. VRT is showing excellent growth while it is valued at reasonable prices. Keep and eye on this one! This makes VRT very considerable for growth investing!
1. Profitability
1.1 Basic Checks
VRT had positive earnings in the past year.
In the past year VRT had a positive cash flow from operations.
Of the past 5 years VRT 4 years were profitable.
Of the past 5 years VRT 4 years had a positive operating cash flow.
1.2 Ratios
VRT has a better Return On Assets (7.05%) than 83.51% of its industry peers.
VRT has a better Return On Equity (24.98%) than 92.78% of its industry peers.
With an excellent Return On Invested Capital value of 17.71%, VRT belongs to the best of the industry, outperforming 95.88% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for VRT is in line with the industry average of 9.56%.
The 3 year average ROIC (10.93%) for VRT is below the current ROIC(17.71%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.05% | ||
| ROE | 24.98% | ||
| ROIC | 17.71% |
ROA(3y)4.09%
ROA(5y)1.51%
ROE(3y)16.17%
ROE(5y)-1.39%
ROIC(3y)10.93%
ROIC(5y)8.89%
1.3 Margins
With an excellent Profit Margin value of 7.92%, VRT belongs to the best of the industry, outperforming 82.47% of the companies in the same industry.
In the last couple of years the Profit Margin of VRT has grown nicely.
VRT has a better Operating Margin (17.49%) than 92.78% of its industry peers.
VRT's Operating Margin has improved in the last couple of years.
VRT has a Gross Margin of 36.32%. This is amongst the best in the industry. VRT outperforms 81.44% of its industry peers.
VRT's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 17.49% | ||
| PM (TTM) | 7.92% | ||
| GM | 36.32% |
OM growth 3Y46.77%
OM growth 5Y27.72%
PM growth 3Y37.26%
PM growth 5YN/A
GM growth 3Y6.33%
GM growth 5Y2.24%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), VRT is creating value.
The number of shares outstanding for VRT has been reduced compared to 1 year ago.
The number of shares outstanding for VRT has been increased compared to 5 years ago.
Compared to 1 year ago, VRT has an improved debt to assets ratio.
2.2 Solvency
VRT has an Altman-Z score of 4.31. This indicates that VRT is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 4.31, VRT belongs to the top of the industry, outperforming 82.47% of the companies in the same industry.
The Debt to FCF ratio of VRT is 2.25, which is a good value as it means it would take VRT, 2.25 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of VRT (2.25) is better than 79.38% of its industry peers.
VRT has a Debt/Equity ratio of 1.09. This is a high value indicating a heavy dependency on external financing.
The Debt to Equity ratio of VRT (1.09) is worse than 70.10% of its industry peers.
Even though the debt/equity ratio score it not favorable for VRT, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.09 | ||
| Debt/FCF | 2.25 | ||
| Altman-Z | 4.31 |
ROIC/WACC1.97
WACC9%
2.3 Liquidity
A Current Ratio of 1.72 indicates that VRT should not have too much problems paying its short term obligations.
The Current ratio of VRT (1.72) is comparable to the rest of the industry.
A Quick Ratio of 1.28 indicates that VRT should not have too much problems paying its short term obligations.
VRT has a Quick ratio (1.28) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.72 | ||
| Quick Ratio | 1.28 |
3. Growth
3.1 Past
VRT shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 55.33%, which is quite impressive.
The Earnings Per Share has been growing by 55.36% on average over the past years. This is a very strong growth
Looking at the last year, VRT shows a very strong growth in Revenue. The Revenue has grown by 20.45%.
VRT shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 12.57% yearly.
EPS 1Y (TTM)55.33%
EPS 3Y55.36%
EPS 5YN/A
EPS Q2Q%48.84%
Revenue 1Y (TTM)20.45%
Revenue growth 3Y17.03%
Revenue growth 5Y12.57%
Sales Q2Q%24.21%
3.2 Future
Based on estimates for the next years, VRT will show a quite strong growth in Earnings Per Share. The EPS will grow by 19.62% on average per year.
The Revenue is expected to grow by 12.85% on average over the next years. This is quite good.
EPS Next Y25.63%
EPS Next 2Y23.52%
EPS Next 3Y23.54%
EPS Next 5Y19.62%
Revenue Next Year17.45%
Revenue Next 2Y15.51%
Revenue Next 3Y14.64%
Revenue Next 5Y12.85%
3.3 Evolution
Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 25.49, which means the current valuation is very expensive for VRT.
Compared to the rest of the industry, the Price/Earnings ratio of VRT indicates a somewhat cheap valuation: VRT is cheaper than 71.13% of the companies listed in the same industry.
VRT is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 28.64, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 17.94, which indicates a rather expensive current valuation of VRT.
VRT's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. VRT is cheaper than 75.26% of the companies in the same industry.
VRT is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 21.44, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.49 | ||
| Fwd PE | 17.94 |
4.2 Price Multiples
75.26% of the companies in the same industry are more expensive than VRT, based on the Enterprise Value to EBITDA ratio.
75.26% of the companies in the same industry are more expensive than VRT, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 22.87 | ||
| EV/EBITDA | 17.8 |
4.3 Compensation for Growth
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
VRT has an outstanding profitability rating, which may justify a higher PE ratio.
VRT's earnings are expected to grow with 23.54% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.99
PEG (5Y)N/A
EPS Next 2Y23.52%
EPS Next 3Y23.54%
5. Dividend
5.1 Amount
VRT has a yearly dividend return of 0.21%, which is pretty low.
In the last 3 months the price of VRT has falen by -46.69%. A price decline artificially increases the dividend yield. It may be a sign investors do not expect the dividend to last.
VRT's Dividend Yield is a higher than the industry average which is at 4.57.
Compared to an average S&P500 Dividend Yield of 2.52, VRT's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.21% |
5.2 History
VRT has been paying a dividend for over 5 years, so it has already some track record.
VRT has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)N/A
Div Incr Years2
Div Non Decr Years4
5.3 Sustainability
VRT pays out 7.07% of its income as dividend. This is a sustainable payout ratio.
DP7.07%
EPS Next 2Y23.52%
EPS Next 3Y23.54%
78
+6.18 (+8.6%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryElectrical Equipment
Earnings (Last)
Earnings (Next)
Inst Owners83.09%
Inst Owner Change0.13%
Ins Owners0.88%
Ins Owner Change-0.34%
Market Cap29.70B
Analysts82.31
Price Target117.78 (51%)
Short Float %2.64%
Short Ratio0.92
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.21% |
Yearly Dividend0.11
Dividend Growth(5Y)N/A
DP7.07%
Div Incr Years2
Div Non Decr Years4
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)11.3%
Min EPS beat(2)3.12%
Max EPS beat(2)19.49%
EPS beat(4)4
Avg EPS beat(4)11.92%
Min EPS beat(4)3.12%
Max EPS beat(4)19.49%
EPS beat(8)8
Avg EPS beat(8)18.04%
EPS beat(12)11
Avg EPS beat(12)15.46%
EPS beat(16)14
Avg EPS beat(16)11.64%
Revenue beat(2)2
Avg Revenue beat(2)5.91%
Min Revenue beat(2)3.93%
Max Revenue beat(2)7.88%
Revenue beat(4)3
Avg Revenue beat(4)3.84%
Min Revenue beat(4)-0.32%
Max Revenue beat(4)7.88%
Revenue beat(8)5
Avg Revenue beat(8)2.27%
Revenue beat(12)7
Avg Revenue beat(12)2.2%
Revenue beat(16)9
Avg Revenue beat(16)1.63%
PT rev (1m)-1.63%
PT rev (3m)-3.19%
EPS NQ rev (1m)0.34%
EPS NQ rev (3m)-4.27%
EPS NY rev (1m)-0.56%
EPS NY rev (3m)-0.35%
Revenue NQ rev (1m)0.26%
Revenue NQ rev (3m)0.72%
Revenue NY rev (1m)-0.14%
Revenue NY rev (3m)0.15%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.49 | ||
| Fwd PE | 17.94 | ||
| P/S | 3.53 | ||
| P/FCF | 22.87 | ||
| P/OCF | 20 | ||
| P/B | 11.14 | ||
| P/tB | N/A | ||
| EV/EBITDA | 17.8 |
EPS(TTM)3.06
EY3.92%
EPS(NY)4.35
Fwd EY5.57%
FCF(TTM)3.41
FCFY4.37%
OCF(TTM)3.9
OCFY5%
SpS22.08
BVpS7
TBVpS-0.36
PEG (NY)0.99
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.05% | ||
| ROE | 24.98% | ||
| ROCE | 23.46% | ||
| ROIC | 17.71% | ||
| ROICexc | 23.13% | ||
| ROICexgc | 55.58% | ||
| OM | 17.49% | ||
| PM (TTM) | 7.92% | ||
| GM | 36.32% | ||
| FCFM | 15.44% |
ROA(3y)4.09%
ROA(5y)1.51%
ROE(3y)16.17%
ROE(5y)-1.39%
ROIC(3y)10.93%
ROIC(5y)8.89%
ROICexc(3y)13.11%
ROICexc(5y)10.56%
ROICexgc(3y)32.65%
ROICexgc(5y)28.78%
ROCE(3y)14.48%
ROCE(5y)11.77%
ROICexcg growth 3Y43.97%
ROICexcg growth 5YN/A
ROICexc growth 3Y69.81%
ROICexc growth 5YN/A
OM growth 3Y46.77%
OM growth 5Y27.72%
PM growth 3Y37.26%
PM growth 5YN/A
GM growth 3Y6.33%
GM growth 5Y2.24%
F-Score7
Asset Turnover0.89
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.09 | ||
| Debt/FCF | 2.25 | ||
| Debt/EBITDA | 1.66 | ||
| Cap/Depr | 66.6% | ||
| Cap/Sales | 2.22% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 84.85% | ||
| Profit Quality | 194.94% | ||
| Current Ratio | 1.72 | ||
| Quick Ratio | 1.28 | ||
| Altman-Z | 4.31 |
F-Score7
WACC9%
ROIC/WACC1.97
Cap/Depr(3y)50.95%
Cap/Depr(5y)43.21%
Cap/Sales(3y)2.07%
Cap/Sales(5y)1.82%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)55.33%
EPS 3Y55.36%
EPS 5YN/A
EPS Q2Q%48.84%
EPS Next Y25.63%
EPS Next 2Y23.52%
EPS Next 3Y23.54%
EPS Next 5Y19.62%
Revenue 1Y (TTM)20.45%
Revenue growth 3Y17.03%
Revenue growth 5Y12.57%
Sales Q2Q%24.21%
Revenue Next Year17.45%
Revenue Next 2Y15.51%
Revenue Next 3Y14.64%
Revenue Next 5Y12.85%
EBIT growth 1Y50.58%
EBIT growth 3Y71.77%
EBIT growth 5Y43.78%
EBIT Next Year39.07%
EBIT Next 3Y24.55%
EBIT Next 5Y19.46%
FCF growth 1Y1383.3%
FCF growth 3Y107.92%
FCF growth 5YN/A
OCF growth 1Y6839.72%
OCF growth 3Y84.26%
OCF growth 5Y87.13%