Vertiv Holdings Co (VRT) Stock Analysis
Vertiv Holdings Co (VRT) Stock Analysis
Analysis from 10-Q filed 2025-10-22. Data as of Q4 2025.
Overall Grade: F (Concerning)
Vertiv Holdings Co faces challenges in financial performance that warrant careful analysis.
| Metric | Value | Context |
|---|---|---|
| ROIC | 21.7% | Above industry average |
| FCF Margin | 18.5% | Strong cash generation |
| Debt/Equity | 0.7x | Moderate leverage |
Investment Thesis: Strong return on invested capital of 21.7% suggests durable competitive advantages and efficient capital allocation.
Explore Vertiv Holdings Co: Earnings History | Filing Intelligence | ROIC Analysis
Profitability: Vertiv Holdings Co earns 21.7% ROIC, Top 25% in Technology
Vertiv Holdings Co's trailing-twelve-month ROIC of 21.7% ranks Top 25% in Technology companies (sector median: 5.3%), driven by NOPAT margin of 13.7% combined with asset turnover of 1.0x. Source: 10-Q filed 2025-10-22. Gross margin of 36.3% with operating margin at 17.9% reflects a competitive pricing environment.
| Metric | VRT | Rating | Context |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 21.7% | Excellent | Above sector median of 5.3% |
| Return on Equity (ROE) | 42.7% | Excellent | Efficient use of shareholder equity |
| Gross Margin | 36.3% | Good | Competitive pricing environment |
| Operating Margin | 17.9% | Good | Efficient operations |
Cash Flow: Vertiv Holdings Co generates $1.9B FCF at 18.5% margin, positive NaN/8 quarters
Vertiv Holdings Co generated $1.9B in free cash flow (TTM), a 18.5% FCF margin, a margin that ranks Top 50% in Technology. Operating cash flow exceeds net income by 1.6x, indicating high earnings quality. FCF was positive in N/A of the last 8 quarters. Source: 10-Q filed 2025-10-22.
| Metric | VRT | Rating | Context |
|---|---|---|---|
| Free Cash Flow Margin | 18.5% | Good | Excellent cash conversion |
| Free Cash Flow (TTM) | $1.9B | Good | Positive cash generation |
| OCF/Net Income | 1.6x | Excellent | High earnings quality |
| FCF Consistency (8Q) | N/A | Warning | Variable cash flow |
Balance Sheet: Vertiv Holdings Co at 0.7x leverage
Vertiv Holdings Co's debt-to-equity ratio of 0.7x reflects elevated leverage. Total debt of $2.9B offset by $1.8B in cash. Source: 10-Q filed 2025-10-22.
| Metric | VRT | Rating | Context |
|---|---|---|---|
| Debt to Equity | 0.7x | Adequate | Moderate leverage |
| Net Cash Position | $-1.1B | Warning | Net debt position |
Valuation: Vertiv Holdings Co trades at 46.6x earnings
Vertiv Holdings Co trades at a P/E of 46.6x. Free cash flow yield of 3.1% reflects market expectations for growth.
| Metric | VRT | Rating | Context |
|---|---|---|---|
| P/E Ratio | 46.6x | Adequate | Premium valuation |
| EV/Sales | 6.2x | Adequate | Growth premium priced in |
| FCF Yield | 3.1% | Adequate | Lower cash yield |
| Dividend Yield | 0.1% | Adequate | Growth focus over income |
Capital Allocation: Vertiv Holdings Co returns 0.1% shareholder yield
Vertiv Holdings Co's total shareholder yield is 0.1% (dividends 0.1% + buybacks). Source: 10-Q filed 2025-10-22.
| Metric | VRT | Rating | Context |
|---|---|---|---|
| Total Shareholder Yield | 0.1% | Adequate | Dividend + buyback yield combined |
| Buyback Yield | 0.0% | Adequate | Minimal buyback activity |
| Total Capital Returned (TTM) | $66.6M | Good | Dividends + buybacks returned to shareholders |
Sector Rankings
| Metric | Value | Percentile | vs Median |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 21.7% | Top 25% | 4.1x above |
| Free Cash Flow Margin | 18.5% | Top 50% | 2.0x above |
| Gross Margin | 36.3% | Bottom 50% | 0.7x below |
| Operating Margin | 17.9% | Top 25% | 3.8x above |
| Return on Equity (ROE) | 42.7% | Top 10% | 8.2x above |
| P/E Ratio | 46.6x | N/A | - |
Financial Scorecard
| Metric | VRT | Rating | Sector Context |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 21.7% | Excellent | Top 25% of sector (median: 5.3%) |
| Free Cash Flow Margin | 18.5% | Good | Top 50% of sector (median: 9.0%) |
| Gross Margin | 36.3% | Good | Bottom 50% of sector (median: 51.6%) |
| Debt to Equity Ratio | 73.9% | Adequate | Elevated but manageable |
| P/E Ratio (Price-to-Earnings) | 46.6x | Adequate | High expectations priced in |
| Free Cash Flow Yield | 3.1% | Adequate | Moderate yield |
Frequently Asked Questions
Q: What is Vertiv Holdings Co's Return on Invested Capital (ROIC)?
Vertiv Holdings Co (VRT) has a trailing twelve-month Return on Invested Capital (ROIC) of 21.7%. This compares above the sector median of 5.3%. An ROIC above 20% indicates exceptional capital efficiency and strong competitive advantages.
Q: What is Vertiv Holdings Co's Free Cash Flow Margin?
Vertiv Holdings Co (VRT) has a free cash flow margin of 18.5%, generating $1.9 billion in free cash flow over the trailing twelve months. A FCF margin between 10-20% represents healthy cash generation for most industries.
Q: Is Vertiv Holdings Co stock overvalued or undervalued?
Vertiv Holdings Co (VRT) trades at a P/E ratio of 46.6x, which is above the sector median of N/A. The EV/Sales multiple is 6.2x. Free cash flow yield is 3.1%, which is in line with market averages.
Q: Does Vertiv Holdings Co pay a dividend?
Vertiv Holdings Co (VRT) currently pays a dividend yield of 0.1%. Including share buybacks, the total shareholder yield is 0.1%. The relatively low yield suggests the company prioritizes growth reinvestment over income distribution.
Q: How much debt does Vertiv Holdings Co have?
Vertiv Holdings Co (VRT) has a debt-to-equity ratio of 0.7x with total debt of $2.9 billion. Net debt position is $1.1 billion.
Q: What is Vertiv Holdings Co's revenue and earnings growth?
Vertiv Holdings Co (VRT) grew revenue by 27.7% year-over-year. Earnings per share increased by 166.4% compared to the prior year. Double-digit revenue growth indicates strong demand and market share gains.
Q: How does Vertiv Holdings Co compare to competitors in Technology?
Compared to other companies in Technology, Vertiv Holdings Co (VRT) shows: ROIC of 21.7% is above the sector median of 5.3% (Top 17%). FCF margin of 18.5% exceeds the sector median of 9.0% (Top 28% of sector). Gross margin at 36.3% is 15.3 percentage points lower than sector peers. These rankings are based on MetricDuck's analysis of all Technology companies with available SEC filings.
Q: What warning signs should I watch for with Vertiv Holdings Co?
Vertiv Holdings Co (VRT) shows no major financial warning signs based on current metrics. However, investors should always monitor: 1) Margin compression trends, 2) Cash flow consistency, 3) Debt levels relative to cash generation, and 4) Changes in competitive positioning.
Data Source: Data sourced from 10-Q filed 2025-10-22. TTM metrics as of Q4 2025.
Methodology: Financial metrics calculated from SEC 10-K and 10-Q filings using standardized formulas. Sector comparisons use peer group based on SIC code.
Scope: This analysis covers SEC filing fundamentals — profitability, cash flow, balance sheet, and valuation metrics. For analyst estimates and price targets, consult sell-side research.
This analysis is for informational purposes only and does not constitute investment advice.