Vertiv is the canonical AI-data-center infrastructure pure-play — critical power (Liebert, NetSure, Geist, Powerbar) and thermal/liquid-cooling systems plus a large recurring lifecycle-services arm. We classify it Industrials / Electrical Equipment & Parts, lifecycle stage High-Growth (profitable scale-up): TTM revenue $10.84B is compounding ~30% with operating margins simultaneously expanding — the rare combination that makes the Quality pillar its strongest leg.
| Sub-signal | Value (TTM / latest) | Sector context | Score | Read |
|---|---|---|---|---|
| Revenue trajectory | +30% YoY Q1'26 (23% organic); FY26 guide +30% | Electrical-equip median ~5-8% | 93 | Top-decile growth; Americas organic +44% |
| Profitability & trend | Adj op margin 20.8% (+430bp YoY); GM 36.2% | Peers (ETN ~mid-20s op, SU ~17-18%) | 80 | Margins expanding with volume — operating leverage live |
| Cash generation | FCF ~$2.31B; FCF margin ~21%; FCF/NI 1.48x | Conversion >1.0x = high quality | 80 | Cash exceeds reported earnings — clean |
| Balance-sheet health | Net debt/EBITDA ~0.2x; int. coverage 33x; current 1.49 | Industrials healthy <3.0x | 85 | Effectively net-cash; ample flexibility |
| Backlog visibility | $12.45B backlog +80.8% YoY; project pipeline >$15B | Growing QoQ = healthy demand | 92 | 12-18 months of forward revenue booked |
AI-cooling scarcity + margin expansion, but equipment competes
Minimal; some services/install-base pull-through
Installed base + NVIDIA reference designs; greenfield is contestable
Scale in precision cooling, but Schneider is larger overall
Liebert brand, liquid-cooling IP, NVIDIA co-design
Moat score = average = 62/100 — a real but moderate moat: Vertiv leads a fast-growing niche, but the product is capital equipment that well-funded rivals can and do attack. The switching-cost and cost-advantage sub-scores below are derived directly from the Competitive Environment read, not asserted.
| Direct rival | Threat type | Share trajectory (VRT vs rival) | Moat-erosion vector |
|---|---|---|---|
| Schneider Electric | Largest DCPI player by revenue ($34B); direct in power + cooling | VRT roughly level / modestly gaining in AI cooling | Scale & breadth — bundled grid-to-rack offer |
| Eaton (+ Boyd Thermal, Mar'26) | "Grid-to-chip" power; Boyd buy adds liquid cooling (~$1.7B rev) | VRT leads cooling today; gap narrowing | New direct entrant in VRT's cooling stronghold |
| ABB / Delta Electronics | Power distribution & UPS | VRT stable/gaining in integrated systems | Cost competition on commoditised power |
| nVent, Stulz, Rittal, Boyd/CoolIT (Ecolab) | Niche cooling specialists / cold-plate & CDU | VRT gaining via full-stack & NVIDIA designs | Component-level disruption in direct-to-chip |
Net effect on the moat: Switching Costs trimmed to 68 and Cost Advantage to 56 — Vertiv is winning now, but Eaton's Boyd entry and Schneider's scale mean the lead is defendable, not unassailable. Competitive threat level: moderate. This propagates to the §11 Bear trigger (rival share gain / margin compression) and the §12 thesis-invalidation rule.
| Component (weight) | Read | Score |
|---|---|---|
| ROIC vs peers (40%) | ~25-30%, top-quartile, rising 3yr | 88 |
| Capital allocation (30%) | Deleveraged post-carve-out; initiated dividend + buyback; bolt-on M&A; raised guide | 75 |
| Management skin-in-game (30%) | SBC modest (<5% rev); share count stable (~+2%/yr); insider ownership moderate | 60 |
Quality verdict: 82/100. An exceptional business at this point in its cycle — hypergrowth, expanding margins, a fortress balance sheet and a top-decile backlog — held back from the high-80s only by a moderate moat in a contestable equipment category.
The Quality story is not in question; the price is. Vertiv trades at a large premium to its electrical-equipment peers on every anchor we use, and the universal cash-yield anchor confirms it. The premium is earned by 30% growth — but "earned premium" is not the same as "attractive entry," and the four references below net to Expensive.
| Reference (weight) | Reading | Score |
|---|---|---|
| Sector / industry median (25%) | Fwd P/E ~51x (FY26 EPS $6.47) vs electrical-equip peers ~25-28x | 22 |
| Own historical decile (20%) | Fwd P/E in the upper third of its own 3yr range (~25x-60x) | 30 |
| Growth-adjusted / PEG (15%) | Fwd P/E 51 ÷ ~36-46% EPS CAGR (FY25→27) → PEG ~1.2-1.4 | 48 |
| Reverse-DCF / implied growth (25%) | At $333 the market implies ~mid-20s% revenue CAGR for 5+ yrs — roughly in line with an already-aggressive consensus | 40 |
| Analyst target (10%) | $333 vs $375 consensus (+12.6%), $355 median (+6.6%) | 66 |
| Analyst grades (5%) | 18 Buy / 1 Hold / 0 Sell — 95% bullish (note: a crowded, contrarian-flavoured extreme) | 88 |
Valuation verdict: 38/100 (Expensive). The +6.6% to median and 95% buy ratings keep it off the floor, but sector-relative multiples, the 1.8% FCF yield and the reverse-DCF all say the AI super-cycle is already in the price.
Vertiv's fortunes are tethered above all to the AI / data-center capital-expenditure cycle. Hyperscaler and neocloud build-out — and specifically the shift to power-dense, liquid-cooled AI racks — is the single force with the most leverage over its order book, margins and multiple. Secondary: grid/electrification capacity and enterprise IT spend.
| Horizon (weight) | Reading | Score |
|---|---|---|
| Historical 12-24m (25%) | AI capex exploded; VRT backlog +80.8% YoY; liquid-cooling market ~31% CAGR | 90 |
| Current state (50%) | Hyperscalers guiding 2026 capex higher; NVIDIA Blackwell/Rubin pull liquid cooling; VRT raised FY26 guide; >$15B pipeline | 88 |
| Forward 6-12m (25%) | Consensus sees capex compounding into 2027, but a digestion/air-pocket and the macro report's "AI concentration / capex-cut" tail risk are live | 78 |
Driver score = 0.25×90 + 0.50×88 + 0.25×78 = 86 → Strong Tailwind. This makes VRT eligible to amplify a BUY to STRONG BUY — but the base signal is HOLD on valuation, and HOLD never amplifies, so the tailwind does not lift the signal here. It is the reason a pullback should be bought, not ignored. Thesis-invalidation floor: a hyperscaler capex cut or a sustained order-growth rollover (backlog growth turning negative) would break the case. Driver confidence 66% (−4 AI-cycle reflexivity/forward uncertainty).
VRT is not on the macro watchlist, so we map its GICS sector: the 20 Jun MacroDriver report rates Industrials (XLI) Overweight / Overweight / Strong-Overweight (S/M/L) — a Tailwind, anchored on the Medium horizon. Going long rides an economic trend (data-center electrification sits under the Energy-Transition and AI drivers, both Moderate). Pressure is therefore Tailwind and the stance Trend-Following (conviction 70). BUT: the base signal is HOLD on valuation, and HOLD never amplifies — so this Tailwind does not lift the signal to STRONG BUY; it simply argues for buying the eventual pullback rather than fading the name. Partial offset: the same report's hawkish-Fed/higher-for-longer flip and armed AI-concentration tail risk pressure VRT's high multiple.
Source: sector-map (GICS Industrials → XLI) · Macro report 2026-06-20
Multi-timeframe trend is unambiguously bullish, but the tape is overbought and extended: monthly RSI 78.6, price at ~83% of the 52-week range, and a +18% sprint in eight sessions off the 9 Jun low ($281) back to $333. Great trend, poor entry location — which is what keeps the Timing pillar in the low-60s and the entry ladder at Wait.
| Component (weight) | Reading | Score |
|---|---|---|
| MTF trend (30%) | All five timeframes uptrend/strong-uptrend; confluence "strongly bullish"; price reclaimed SMA50 ($321.5) | 80 |
| Risk-reward / position-risk (20%) | Nearest support $296-300 (~2.1 ATR below); not at support after the bounce — chasing, not buying the dip | 52 |
| Macro overlay (15%) | XLI in favour (O/O/SO), but hawkish-Fed/higher-for-longer pressures high-multiple growth | 62 |
| Sentiment (18%) | All recent analyst actions "maintain" Buy/Overweight; news tone positive (raised guidance, AI demand) | 62 |
| Catalysts (17%) | No company catalyst within 30 days (next earnings est. late Jul); calendar calm | 70 |
Relative strength: VRT is a runaway leader — roughly +106% from the Dec'25 low and far outperforming both SPY and XLI on 1m and 3m (RS ~85), but that strength is the source of the extension, not a reason to chase. Beta 2.04 — a 5% position carries ~10% market-risk weight. Timing verdict: 62/100 (conf 70%) — constructive trend, unattractive entry.
| Date | Event | Impact | Forecast | Previous | Relevant? | Why |
|---|---|---|---|---|---|---|
| 2026-06-25 | Core PCE Price Index MoM (May) | High | +0.3% | +0.2% | ⚠️ Medium | Sticky core would extend higher-for-longer → pressures high-multiple growth like VRT |
| 2026-06-30 | CB Consumer Confidence (Jun) | High | — | 93.1 | · Low | Broad sentiment; minor read-through to enterprise/data-center capex |
| 2026-07-01 | ISM Manufacturing PMI (Jun) | High | 52.5 | 54.0 | ⚠️ Medium | Industrials demand gauge; soft print pressures the sector multiple |
| 2026-07-02 | Non-Farm Payrolls (Jun) | High | 70K | 172K | ⚠️ Medium | Labour cooling shapes the Fed path that drives growth-stock multiples |
| Date | Event | Actual | Forecast | Surprise | Impact |
|---|---|---|---|---|---|
| 2026-06-17 | Fed Interest Rate Decision | 3.75% | 3.75% | In line (hawkish dots) | Negative for high-multiple growth — higher-for-longer |
| 2026-06-17 | Retail Sales MoM (May) | +0.9% | +0.5% | +80% above | Positive — resilient demand |
| 2026-06-16 | Housing Starts (May) | 1.177M | 1.43M | −17.7% below | Neutral for VRT (data-center, not residential) |
Vertiv is a medium macro-sensitivity name (Industrials): no single release is decisive, but the 17 Jun hawkish-hold/dot-plot flip toward a possible 2026 hike is the relevant headwind — higher-for-longer compresses the very high multiple VRT trades on. Core PCE (25 Jun) and ISM/payrolls (1-2 Jul) are the next swing points for the sector multiple. None is inside the 3-day window, so no WAIT-FOR-EVENT override applies.
| Timeframe | Trend | Direction | RSI | MACD | Key S/R | Breakout | Vol |
|---|---|---|---|---|---|---|---|
| Monthly | Uptrend | Bullish | 78.6 | +, rising | S 53.6 · R 202 | Resist b/o | 0.5x |
| Weekly | Uptrend | Bullish | 65.9 | +, flat | S 110 · R 380 | Resist b/o | 0.7x |
| Daily | Strong Up | Bullish | 56.7 | turning + | S 297 · R 343 | Resist b/o | 1.2x |
| Hourly | Strong Up | Bullish | 69.7 | +, flat | S 311 · R 338 | Resist b/o | — |
| 15-min | Strong Up | Bullish | 62.1 | +, rising | S 329 · R 338 | Resist b/o | — |
| Confluence: Strongly Bullish · MTF Score ~80 | |||||||
All five timeframes align bullish (confluence 'strongly bullish', MTF score ~80) — a textbook uptrend. The caution is the monthly RSI at 78.6 (overbought) and price pressing the upper 52-week range after a sharp V-recovery from $281. The constructive pattern is 'higher-timeframe uptrend with a recent pullback already reclaimed' — but the dip was at $281-300, and at $333 the favourable-entry window has closed for now. Watch a pullback to the $296-310 support shelf as the next entry.
6-month daily close (orange = SMA50). The V-recovery from the 9 Jun low ($281) back to $333 reclaimed the SMA50 ($321.5); resistance $343/$359/$380 (52w high), support shelf $296-310 then $281.
AI-capex super-cycle keeps compounding; liquid-cooling mix and services lift margins; backlog converts ahead of schedule and re-accelerates orders. Multiple holds ~45-50x a rising EPS toward the Street high ($500).
FY26 guide ($13.5-14.0B, adj EPS $6.30-6.40) is met; growth stays ~30% then moderates. Stock tracks consensus/median targets ($355-375), i.e. modest upside from $333 — the 'priced-for-plan' path.
A hyperscaler capex cut / AI digestion air-pocket stalls order growth (the macro report's armed tail risk), AND/OR Eaton (Boyd) + Schneider take liquid-cooling share and compress margins. The ~51x multiple de-rates fast on a high-beta (2.04) name → back to the $240-280 fair-value zone.
Probability-weighted centre ~$350 — only ~5% above spot, i.e. the base case already pays you little for entering here. The bear path is a real ~25% on two independent triggers (AI-capex rollover and competitive share loss), both carried into the §12 exit rules. The asymmetry favours waiting for the $296-310 shelf, where the same bull/base upside comes with a materially better risk-reward.
Forecast: Fundamental: Unlikely near-term — would need a ~25% pullback to ~$250 (a full bear leg) or a year of EPS growth to grow into the price. Technical (the reachable path): Moderate, ~1-3 weeks — a pullback to the $296-310 shelf with a higher low, or a >1.5x-volume push through $343/$359, would flip this group to MET; on a high-beta name in an uptrend either is plausible inside a month. Catalyst: catalyst-dependent on the ~late-July Q2 print. Net: at $333 the ladder reads Wait — a strong business with no entry edge today; the watch-level is the $296-310 zone.
Forecast: Stop is Unlikely in the next 4-6 weeks (price is ~17-19% above $278 and above all key MAs) — it would take an earnings miss or an AI-capex scare to reach it. Thesis-invalidation conditions are all clear today; the one to watch is the ~late-July order/backlog print. For holders, no exit trigger is live → Hold.
No risk budget or portfolio role was provided (batch run), so position sizing is illustrative only. The §12 Conviction Ladder reads Wait (0 of 3 entry paths met) — the authority on the size tier — so the sizing guidance is simply: no new entry edge at $333; size = 0 until a path opens.
Volatility context: daily ATR ~$19 (~5.7% of price) — a wide daily range; beta 2.04 means a 5% position behaves like ~10% of market risk. For when a path opens, a staggered entry across the $296-310 shelf (and a deeper $278-281 tranche) would average in while respecting the hard stop just below $278.
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"isin": "US92537N1081",
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"company": "Vertiv Holdings Co",
"date": "2026-06-20",
"version": "v6",
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"user_horizon": null,
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"price_at_rating": 333.05,
"signal_short": "HOLD",
"signal_medium": "HOLD",
"signal_long": "HOLD",
"primary_signal": "HOLD",
"quality_score": 82,
"valuation_score": 38,
"timing_score": 62,
"driver_score": 86,
"lifecycle_stage": "high-growth",
"sector": "Industrials / Electrical Equipment & Parts",
"quality_detail": {
"industry_benchmark_name": "ROIC vs WACC + Backlog Growth (Industrials)",
"industry_benchmark_value": "ROIC ~25-30% vs WACC ~9-10%; backlog +80.8% YoY",
"industry_benchmark_score": 92,
"moat_score": 62,
"roic_percentile_vs_peers": 88,
"capital_allocation": 75,
"management_skin_in_game": 60
},
"valuation_detail": {
"fcf_yield": 1.8,
"forward_pe": 51,
"ttm_pe": 81.8,
"implied_growth_rate": "~mid-20s%",
"consensus_growth_rate": "~22% rev CAGR to 2030",
"historical_valuation_decile": 7
},
"timing_detail": {
"mtf_confluence": 80,
"risk_reward_score": 52,
"relative_strength_vs_spy": "strong outperform",
"relative_strength_vs_sector": "strong outperform",
"catalyst_clustering_score": 70,
"dynamic_macro_weight": 0.15,
"monthly_rsi": 78.6,
"daily_rsi": 56.7,
"beta": 2.04,
"atr_daily": 19.1
},
"nonop_pct_of_net_income": 2,
"clean_pe": 78,
"clean_peg": 1.7,
"competitive_share_trajectory": "gaining",
"competitive_threat_level": "moderate",
"economic_alignment_stance": "Trend-Following",
"economic_alignment_conviction": 70,
"economic_alignment_pressure": "Tailwind",
"economic_alignment_source": "sector-map",
"macro_report_date": "2026-06-20",
"overall_confidence": 65,
"fair_value_est": 250,
"stop_loss": 278,
"target_price": 355,
"analyst_consensus_target": 375.08,
"analyst_target_high": 500,
"analyst_target_low": 277,
"analyst_target_upside_pct": 12.6,
"analyst_grades_consensus": "Buy",
"analyst_bullish_pct": 94.7,
"analyst_coverage_count": 19,
"fmp_rating": "B",
"fmp_overall_score": 3,
"recent_upgrades_30d": 0,
"recent_downgrades_30d": 0,
"hard_gate_state": "caution",
"gates_triggered": [],
"gates_caution": [
"Valuation Ceiling (informational)"
],
"do_not_buy_triggers": [],
"entry_groups_met": 0,
"entry_conviction": "Wait",
"exit_groups_live": 0,
"exit_action": "Hold",
"next_update_date": "2026-07-06",
"next_update_basis": "default +14d (no impactful event in window; next earnings est. ~late Jul, rolled past 4 Jul holiday)",
"next_check_date": "2026-07-06"
}
In one line: a top-decile AI-infrastructure business (Quality 82, Driver 86 Strong Tailwind, Econ Tailwind) trading at an Expensive price (Valuation 38) after an overbought run — so the matrix returns HOLD across all three horizons with the entry ladder at Wait. Not a sell; a watch-and-accumulate name. Re-rate on a pullback to the $296-310 shelf.