Value
3.4/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 1.2 |
| P/S | 3.0 |
| EV/EBITDA | 0.0 |
| Fwd P/E | 3.2 |
| PEG | 4.9 |
| Analyst target | 6.0 |
- ▸Forward P/E: 33.9x
- ▸PEG: 1.56
VRT · Why this verdict
Why Vertiv Holdings (VRT) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictHOLD
Overall score6.2/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Vertiv carries a wide economic moat rating and generates a 45% return on equity with 126% free cash flow conversion relative to net income — categorized as compounder quality — meaning it earns well above its cost of capital while generating real cash at a rate exceeding accounting earnings. Quality breakdown | Return on equity should remain above 35% over the next 12 months, and free cash flow should remain above 100% of net income, confirming the compounder quality designation is not a one-period anomaly. | →Stable |
| CounterThe wide moat assessment is based on the current data center infrastructure cycle; if hyperscaler capex slows materially, the pricing power and moat assumption will face a stress test. | ||
Vertiv has beaten earnings estimates in all 4 of the last 4 quarters with an average positive surprise of 14.99%, including a 25% beat in Q3 2025, demonstrating consistent ability to execute above analyst expectations in a high-growth infrastructure cycle. Catalyst breakdown | The beat streak should extend to at least 6 consecutive quarters, with quarterly earnings per share remaining above $0.95 and average surprise percentages staying above 5%. | →Stable |
| CounterA 14.99% average beat may reflect a pattern of conservative guidance in a favorable demand environment; if infrastructure spending growth moderates, the beats will narrow and potentially reverse. | ||
Revenue is growing at 30% year-over-year, driven by data center and AI infrastructure demand, placing Vertiv in the top growth tier among industrial companies and supporting the premium valuation at 35.2x forward earnings. Growth breakdown | Revenue growth should remain above 20% over the next 12 months, reflecting continued data center buildout, and the PEG ratio of 1.56 should compress toward 1.0 as earnings growth catches up. | →Stable |
| Counter62% of revenue comes from the Americas, making the growth thesis heavily dependent on a single geographic market and vulnerable if U.S. data center capex pauses or hyperscalers shift construction activity internationally. | ||
Two high-concentration risks are flagged: geographic concentration in the Americas at 62% of revenue, and single-source supplier reliance for critical components — both of which are material tail risks that the market has not fully priced in given the current premium valuation. Bear case | The company should demonstrate geographic revenue diversification over 12 months, with Americas share declining below 60% as international data center demand increases. | →Stable |
| CounterGeographic concentration in the Americas is a feature rather than a bug during the current AI infrastructure supercycle, as U.S. hyperscaler spending dominates global data center capex. | ||
Vertiv carries a wide economic moat rating and generates a 45% return on equity with 126% free cash flow conversion relative to net income — categorized as compounder quality — meaning it earns well above its cost of capital while generating real cash at a rate exceeding accounting earnings.
→StableQuality breakdown
- Expectation
- Return on equity should remain above 35% over the next 12 months, and free cash flow should remain above 100% of net income, confirming the compounder quality designation is not a one-period anomaly.
CounterThe wide moat assessment is based on the current data center infrastructure cycle; if hyperscaler capex slows materially, the pricing power and moat assumption will face a stress test.
Vertiv has beaten earnings estimates in all 4 of the last 4 quarters with an average positive surprise of 14.99%, including a 25% beat in Q3 2025, demonstrating consistent ability to execute above analyst expectations in a high-growth infrastructure cycle.
→StableCatalyst breakdown
- Expectation
- The beat streak should extend to at least 6 consecutive quarters, with quarterly earnings per share remaining above $0.95 and average surprise percentages staying above 5%.
CounterA 14.99% average beat may reflect a pattern of conservative guidance in a favorable demand environment; if infrastructure spending growth moderates, the beats will narrow and potentially reverse.
Revenue is growing at 30% year-over-year, driven by data center and AI infrastructure demand, placing Vertiv in the top growth tier among industrial companies and supporting the premium valuation at 35.2x forward earnings.
→StableGrowth breakdown
- Expectation
- Revenue growth should remain above 20% over the next 12 months, reflecting continued data center buildout, and the PEG ratio of 1.56 should compress toward 1.0 as earnings growth catches up.
Counter62% of revenue comes from the Americas, making the growth thesis heavily dependent on a single geographic market and vulnerable if U.S. data center capex pauses or hyperscalers shift construction activity internationally.
Two high-concentration risks are flagged: geographic concentration in the Americas at 62% of revenue, and single-source supplier reliance for critical components — both of which are material tail risks that the market has not fully priced in given the current premium valuation.
→StableBear case
- Expectation
- The company should demonstrate geographic revenue diversification over 12 months, with Americas share declining below 60% as international data center demand increases.
CounterGeographic concentration in the Americas is a feature rather than a bug during the current AI infrastructure supercycle, as U.S. hyperscaler spending dominates global data center capex.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Vertiv Holdings is a high-quality electrical infrastructure company with 30% revenue growth, 45% return on equity, a perfect 4-quarter earnings beat streak averaging 14.99% positive surprise, and a wide economic moat — but the stock's 9.2% upside to analyst targets and below-threshold asymmetry ratio mean the risk-reward does not yet meet the bar for new entry.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
7.3/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 10.0 |
| ROA | 7.4 |
| Gross margin | 3.4 |
| Op margin | 6.5 |
| Net margin | 7.2 |
| Current ratio | 5.5 |
| FCF quality | 9.2 |
| Moat | 7.5 |
| Piotroski F | 8.9 |
- ▸Excellent ROE: 45%
- ▸Excellent cash conversion: 126% FCF/NI
- ▸Wide economic moat
- ▸Compounder quality: strong returns + growth
Growth
10.0/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 10.0 |
| EPS growth | 10.0 |
- ▸Strong growth: 30% YoY
Momentum
4.3/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 0.0 |
| OBV | 10.0 |
| MA position | 4.0 |
| Volume | 2.0 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
7.8/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 6.0 |
| Analyst rating | 9.0 |
| Price target | 8.2 |
- ▸Analyst upside: 25%
Insider
5.1/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.2 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
4.3/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 1.9 |
| quality rank | 8.6 |
| growth rank | 6.5 |
- ▸Superior ROE vs peers
- ▸Best-in-class margins
Technical
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 6.6 |
| support resistance | 7.0 |
| 52w position | 5.8 |
Risk (lower is worse)
4.3/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.0 |
| days to cover | 8.4 |
| volatility | 0.0 |
| put call | 4.3 |
| implied vol | 0.0 |
| beta | 3.2 |
| debt equity | 6.4 |
- ▸High IV: 87%
- ▸Concentration risks: 2 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
7.5/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 9.9 |
| dividend safety | 7.0 |
| news activity | 8.0 |
- ▸Perfect beat streak: 4Q
- ▸Dividend: 8.0%
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more.
Engine technical detail
verdict_path:
L4:PATH_F_HOLDPassed (5)
- INSIDER:OK
- 8K:CLEAN
- EARNINGS_PROXIMITY:26d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:4.3<4.5
- ASYMMETRY:0.9<1.5@spot
Warning (0)
none
Reward-to-Risk
0.86
Upside
+12.9%
Downside
15.0%
Sizing output
AVOID
SetupRange Bound — RSI 51 mid-range, Bollinger mid-band
EdgeCatalyst-Driven — Earnings in 26d with 4/4 beat streak
SuitabilityAggressive — Beta 2.03>1.3
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: INSIDER:OK. Top dim: Growth at 10.0; weakest: Value at 3.4. No conviction either direction.
The strongest dimensions are Growth at 10.0, Sentiment at 7.8, and Catalyst at 7.5; the weakest are Value at 3.4, Risk (lower is worse) at 4.3, and Peer rank at 4.3. The V9 engine flagged 2 failed gates, producing an asymmetric reward-to-risk of 0.86 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Perfect Beat Streak Growth Execution
Trip ifEPS surprise falls below 0% in at least 3 of the next 4 quarters.
- P2Wide Moat High Roe
Trip ifReturn on equity falls below 30%, more than 15 percentage points below the current 45%, for 2 consecutive quarters.
- P3Revenue Growth 30pct
Trip ifRevenue growth falls below 15% year-over-year for 2 consecutive quarters, indicating the infrastructure cycle is decelerating faster than expected.
- P4Concentration Supply Chain Risk
Trip ifAmericas revenue share rises above 70%, indicating international diversification is not materializing, or supply chain disruption leads to a gross margin decline of more than 3 percentage points.