Pre-Q3 Earnings Report: Is Vertiv Stock a Portfolio Must-Have?

Introduction

Vertiv Holdings LLC is a global provider of critical digital infrastructure and lifecycle services. The company offers hardware, software, analytics, and services to enable its customers to maintain high performance in their IT environments. Vertiv provides datacenter infrastructures, power systems, thermal management, racks and enclosures, access control, fire suppression, video surveillance, and more. Vertiv is seeing growth in multiple verticals, and its stock is up 28.44% over the past year. However, investors may be wondering if the stock is still a good buy ahead of its upcoming third-quarter earnings report.

Key Points

• Vertiv is a leading provider of critical digital infrastructure and lifecycle services.
• The company is seeing growth in multiple verticals, including cloud, colocation, enterprise, and telecom.
• Vertiv's stock has already appreciated this year.
• The company is expected to report strong third-quarter results.
• However, due to macro economic conditions, the company's overall outlook is mixed.

Recent Performance and Outlook

Vertiv's revenue increased 10.4% year-over-year to $1.4 billion in the second quarter of 2022. The company's adjusted earnings per share (EPS) increased 10.6% to $0.49. Vertiv is expecting to report another strong quarter when it announces its third-quarter results on November 2, 2022. The company is expecting revenue to be in the range of $1.43 billion to $1.47 billion, and adjusted EPS to be in the range of $0.50 to $0.53.

Despite the positive outlook, there are some concerns about the company's overall outlook. The global economy is slowing down, and this could impact Vertiv's business. Additionally, the company is facing increasing competition from both large and small players in the market. Due to these macro economic factors, Vertiv's stock price may be volatile in the short term.

Valuation

Vertiv's stock is trading at a forward price-to-earnings (PE) ratio of 16.5. This is in line with the average PE ratio for the electrical equipment industry. However, Vertiv's stock is trading at a premium to its peers. For example, Eaton Corporation (ETN) is trading at a forward PE ratio of 15.6, and Schneider Electric (SU) is trading at a forward PE ratio of 14.9.

Conclusion

Vertiv is a strong company with a solid track record. The company is benefiting from the growth of the digital economy with it's growing verticals and revenue. However, there are some risks to consider, including the slowing global economy and increasing competition. Overall, Vertiv is a good stock for investors who are looking for a long-term investment. However, investors may want to wait for a pullback in the stock price before buying.

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Disclaimer: I am not a financial advisor and this article should not be taken as financial advice. Please consult with a financial advisor before making any investment decisions.