Vertiv Holdings Co Reports Strong Q1 2024 Earnings, Analysts Bullish on Stock

Citigroup's Andy Kaplowitz raised their price target on Vertiv Holdings Co (NYSE: VRT) by 7.8% from $102 to $110 on 2024/04/26. The analyst maintained their Strong Buy rating on the stock.

Kaplowitz's assessment came after a review of Vertiv Holdings Co's Q1 2024 earnings, which were reported on April 24, 2024. The analyst described the quarter as "a strong quarter highlighted by order growth of 60%."

Looking ahead, Kaplowitz acknowledged that it is unlikely for Vertiv Holdings Co to report 60% order growth every quarter. However, the analyst believes that Q1's performance "seems like another confirmation of an unusually strong upcycle that's just getting started."

In Q1 2024, Vertiv Holdings Co reported impressive results across various metrics. The company exceeded expectations with earnings per share (EPS) of $0.43, beating the Zacks Consensus Estimate of $0.37 by 79.2%. This also represented a significant increase from the $0.24 EPS reported in Q1 2023.

Revenue for Q1 2024 came in at $1.64 billion, surpassing the Zacks Consensus Estimate by 0.16% and showing a growth of 7.9% compared to Q1 2023's $1.52 billion. Additionally, the company reported an operating profit of $248.6 million, marking a 41.7% increase from the previous year.

Furthermore, Vertiv Holdings Co's operating margin improved to 15.2% in Q1 2024, up from 11.5% in Q1 2023.

Looking ahead, management provided guidance for Q2 2024 and the full fiscal year. For Q2, the company expects EPS of $0.53 to $0.57, revenue of $1.9 billion to $1.95 billion, operating profit of $315 million to $335 million, and an operating margin of 16.7% to 17.1%. For the full fiscal year 2024, management projects EPS of $2.29 to $2.35, revenue of $7.54 billion to $7.69 billion, operating profit of $1.325 billion to $1.375 billion, and an operating margin of 17.5% to 17.9%.

CEO Giordano Albertazzi expressed satisfaction with the company's performance, stating, "Vertiv’s robust momentum in 2023 continued into Q1 2024, led by strength in orders, which grew 60%." Albertazzi also highlighted the increasing demand for AI-driven solutions and the company's readiness to support the development of the AI ecosystem.

Executive Chairman Dave Cote echoed Albertazzi's optimism, emphasizing the potential for further improvement and growth in the data center market. Cote stated, "Vertiv is demonstrating its true potential, driven by the continued strides Gio and his team are making in improving execution and building a high-performance culture."

In addition to Kaplowitz's rating update, other analysts also revised their price targets for Vertiv Holdings Co on April 25, 2024. JP Morgan's Stephen Tusa raised their target from $95 to $100, Evercore ISI Group's Amit Daryanani increased their target from $90 to $95, and Oppenheimer's Noah Kaye raised their target from $96 to $98. All three analysts maintained their Buy ratings on the stock.

Overall, 87.5% of top-rated analysts currently rate VRT as a Strong Buy or Buy, while 12.5% view it as a Hold. No analysts recommend selling the stock.

The consensus forecast among analysts is that VRT's upcoming year will deliver earnings per share (EPS) of $1.2. If the analysts' predictions hold true, VRT's next yearly EPS will be slightly lower, down by 0.8% on a year-over-year basis.

Since Vertiv Holdings Co's latest quarterly report on April 24, 2024, the stock price has risen by 6.8%. Year-over-year, the stock has shown remarkable growth, surging by 638.8%. During the same period, VRT has outpaced the S&P 500, which has risen by 24%.

Citigroup analyst Andy Kaplowitz is highly regarded by WallStreetZen, ranking in the top 1% out of 4,565 Wall Street analysts. Kaplowitz specializes in the Basic Materials and Industrials sectors, among others, and boasts an impressive average return of 27% with a 67.5% win rate.

Vertiv Holdings Co is a provider of mission-critical infrastructure technologies and life cycle services for various industries worldwide. The company offers power management products, thermal management products, integrated rack systems, modular solutions, and management systems for monitoring and controlling digital infrastructure. Vertiv Holdings Co also provides lifecycle management services, predictive analytics, and professional services for deploying, maintaining, and optimizing these products and their related systems.

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