Vertiv VRT shares have surged 36.1% over the trailing six months, outperforming the Zacks Computer and Technology sector’s appreciation of 2.8% and the Zacks Computers – IT Services industry’s return of 19.5%.

VRT has also outperformed industry peers like Stem and DXC Technology DXC, which have returned 7% and 6%, respectively, over the same time frame.

VRT shares are riding on an expanding product portfolio, strong partner base and accretive acquisitions.

Six Month Performance

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The stock is currently trading above the 50-day and 200-day moving averages, indicating a bullish trend.

Vertiv’s Shares Trade Above 50-Day & 200-Day

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VRT’s 2025 Earnings Estimates Remain Steady

The Zacks Consensus Estimate for VRT’s 2025 earnings is currently pegged at $3.58 per share, unchanged over the past 30 days and indicating year-over-year growth of 33.2%.

The consensus mark for VRT’s 2025 revenues is pegged at $9.20 billion, indicating year-over-year growth of 17.61%.

VRT beat the Zacks Consensus Estimate in each of the trailing four quarters, the average earnings surprise being 10.13%.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

An Expanding Portfolio Aids VRT’s Prospects

VRT is benefiting from an extensive product portfolio that spans thermal systems, liquid cooling, UPS, switchgear, busbar and modular solutions.

The recent launch of the Vertiv PowerUPS 9000 — a cutting-edge solution tailored for high-performance IT applications — has expanded VRT’s data center power solutions portfolio. Available in UL and CE models ranging from 250 to 1250kW, the compact UPS system offers up to 97.5% efficiency in the double-conversion mode.

In liquid cooling, Vertiv has introduced the CoolPhase CDU liquid-to-refrigerant coolant distribution unit and the CoolChip Fluid Network in-rack manifold. These modular, cost-effective CDUs can be easily deployed in data centers that were not originally configured for liquid cooling. Hence, data centers can support high-density computing for AI alongside traditional air-cooled racks.

VRT is proactive in acquisitions, most recently acquiring centrifugal chiller technologies from BiXin Energy Technology (Suzhou) Co. Ltd., a Chinese company specializing in chillers, heat pumps, and air-handling units. This move has expanded VRT’s chiller portfolio, enhancing its solutions for high-performance computing and AI globally.

A Rich Partner Base Bodes Well for Vertiv

VRT has a growing network of rich partnerships with companies such as Ballard Power Systems, Compass Datacenters, NVIDIA NVDA, Intel and ZincFive.

Its collaboration with NVIDIA involves co-developing power and cooling reference designs for NVIDIA GB200 NVL72 platform, addressing the unique challenges of AI driven workloads. NVIDIA leverages VRT’s expertise in liquid and air cooling to enable seamless integration and scalability.

VRT and Compass Datacenters have collaborated to create an innovative cooling solution that flexes between air cooling and liquid cooling for AI and high-density computing. Set to be deployed in early 2025, the technology is part of a multi-year, multi-billion-dollar partnership to support evolving data center needs.

Vertiv has added the ZincFive BC Series UPS battery cabinets to its portfolio of battery systems that are available for data center backup power.

Competition, Inflation & Valuation Concerns Loom Over VRT

Although VRT is experiencing rapid growth in the liquid cooling market, a critical area for AI and high-density computing, it is also facing fierce competition in the sector.

Established players like Johnson Controls International JCI are fighting for market share by introducing innovative products such as advanced HVAC (Heat, Ventilation and Air Conditioning) equipment, including water-cooled chillers, air handlers and variable refrigerant flow systems.

Persistent inflation is driving up VRT’s operating and logistical costs, directly affecting profitability. This makes it challenging for VRT to maintain competitive pricing and margins.

In the third quarter of 2024, VRT’s total cost of sales increased 18.1% year over year to $1.32 billion. Selling, general and administrative (SG&A) expenses increased 2.3% year over year to $334.6 million.

VRT shares are not so cheap, as its Value Score of D suggests a stretched valuation at this moment.

In terms of the trailing 12-month price/book ratio, VRT is trading at 26.01, higher than its median of 22.17 and the broader sector’s 10.73.

Price/Book Ratio (TTM)

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VRT Stock: Buy, Sell or Hold?

VRT is benefiting from its strategic partnerships, innovative solutions and a strong market presence.

However, an intensely competitive market landscape and inflationary challenges pose headwinds. Its stretched valuation remains a concern.

VRT currently has a Zacks Rank #3 (Hold), suggesting that it may be wise for investors to wait for a more favorable entry point in the stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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