Vertiv Shares Attracting Huge Volume: Should You Join the Rush?

Vertiv VRT has been hogging the limelight with a significant jump in the volume of shares traded over the past week. 13,774,900 VRT shares exchanged hands on March 31 compared with 6,225,200 on March 24. Vertiv has been attracting investor attention thanks to an extensive product portfolio, which spans thermal systems, liquid cooling, UPS, switchgear, busbar and modular solutions. The backlog at the end of 2024 was $7.18 billion, up roughly 30% over 2023. In the trailing 12 months, organic orders grew approximately 30%, with a book-to-bill of 1.2 times for 2024, which suggests a strong prospect.VRT Shares Volume Jumps Past Week Image Source: Yahoo Finance However, VRT shares plunged 23% in the past week on multiple concerns that include concerns about the tariffs levied by U.S. President Donald Trump on leading trade partners, particularly China, in the technology domain, as well as sluggishness in near-term order trends. Year to date (YTD), Vertiv shares dropped 36.4%, underperforming the broader Zacks Computer and Technology sector’s 11.7% decline and the Zacks Computers - IT Services industry’s fall of 13.5%.VRT shares have underperformed its closest peers including Eaton ETN, Schneider Electric SBGSY and ABB Ltd ABBNY. Over the same time frame Eaton, Schneider Electric and ABB Ltd fell 3.2%, 6.1% and 16.5%, respectively.Vertiv is facing significant competition from Eaton, which has been investing aggressively. Eaton has invested more than $8 billion in transformative portfolio management. Robust project activity tied to megatrends continues with reindustrialization, data center markets and infrastructure spending, creating more opportunities for this power management company.Vertiv’s YTD Performance Image Source: Zacks Investment Research VRT shares are currently overvalued, as suggested by its Value Score of C.In terms of the 12-month price/book ratio, VRT is trading at 11.29, higher than the sector’s 8.69, Eaton’s 5.8, Schneider Electric’s 3.91 and ABB Ltd’s 6.44.Price/Book Ratio (TTM) Image Source: Zacks Investment Research Vertiv shares are trading below the 50-day and 200-day moving averages, indicating a bearish trend.VRT Shares Trade Below 50-Day & 200-Day SMAs Image Source: Zacks Investment Research So, should investors continue to jump on the VRT bandwagon? Let us dig deeper to find out.Vertiv Benefits From Expanding PortfolioVRT’s expanding portfolio is a positive. In March, VRT launched four new systems — Vertiv Unify software, Vertiv SmartRun, Vertiv CoolLoop RDHx and Vertiv PowerDirect Rack — which expanded capabilities in infrastructure management, prefabricated modular deployment, advanced thermal management, and DC power distribution.Strong capital expenditure spending plans by hyperscalers on data center capacity expansion bodes well for Vertiv. VRT’s rich partner base, which includes the likes of Ballard Power Systems, Compass Datacenters, NVIDIA, Intel and ZincFive, is a key catalyst.VRT’s 2025 Net Sales & Earnings to Rise Y/YFor 2025, Vertiv expects its data center segment to accelerate globally, supported by the continued strong AI-driven demand. Based on backlog and visibility into a strong pipeline, the company expects the 2025 organic sales growth rate between 15% and 17%, suggesting a slight dip from the 18% growth reported in 2024. Net sales for 2025 are expected to be $9.13-$9.28 billion. The Zacks Consensus Estimate for VRT’s 2025 revenues is pegged at $9.23 billion, indicating year-over-year growth of 15.14%.Adjusted operating profit is expected between $1.91 billion and $1.96 billion, whereas the adjusted operating margin is anticipated to be 20.8-21.2%. Vertiv’s 2024 operating margin expanded 410 basis points on a year-over-year basis to 19.4%.Adjusted earnings are expected between $3.50 and $3.60 per share. The consensus mark for VRT’s 2025 earnings is pegged at $3.59 per share, unchanged over the past 30 days, indicating year-over-year growth of 25.96%.The adjusted free cash flow is expected to be $1.28-$1.33 billion for 2025. VRT reported an adjusted free cash flow of $1.14 billion in 2024.Vertiv’s Q1 Earnings Estimates Show Steady TrendFor first-quarter 2025, adjusted earnings are expected between 57 cents and 63 cents per share. The consensus mark for VRT’s earnings is pegged at 62 cents per share, unchanged over the past 30 days, indicating year-over-year growth of 44.2%.Vertiv expects net sales of $1.9-$1.95 billion. The Zacks Consensus Estimate for revenues is pegged at $1.92 billion, indicating year-over-year growth of 16.84%.Adjusted operating profit for first-quarter 2025 is expected to be between $315 million and $335 million. The adjusted operating margin is anticipated to be 16.7-17.1%.VRT beat the Zacks Consensus Estimate in all the trailing four quarters, the average earnings surprise being 13.67%.Vertiv Holdings Co. Price and Consensus Vertiv Holdings Co. price-consensus-chart | Vertiv Holdings Co. QuoteFind the latest EPS estimates and surprises on Zacks Earnings Calendar.ConclusionVertiv is benefiting from its strong portfolio and rich partner base, which are driving order growth. However, concerns over near-term order growth, traffic headwinds and stretched valuation are headwinds that make VRT stock a risky bet.VRT currently has a Zacks Rank #3 (Hold), which implies that investors should wait for a more favorable entry point to accumulate the stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.3% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Eaton Corporation, PLC (ETN): Free Stock Analysis Report Schneider Electric SE (SBGSY): Free Stock Analysis Report Vertiv Holdings Co. (VRT): Free Stock Analysis Report ABB Ltd (ABBNY): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks