Key Takeaways
- Vertiv shares jumped 16% after third-quarter sales rose 61% to $4.31 billion and organic orders more than doubled.
- The report pushes back on fears that AI data center spending has peaked, and management raised full-year sales guidance by $650 million.
- Management’s new 2026 adjusted EPS guidance of $7.10 to $7.20 is above analysts’ $6.73 consensus, so estimates look likely to rise.
- The main risk is delivery: the guidance needs 50% organic sales growth in the fourth quarter.
Vertiv (VRT) stock jumped 16% this morning after its third-quarter report beat Wall Street’s estimates on sales and earnings. Management also raised its full-year outlook on every key metric.
That’s a sharp turnaround for a stock that fell 15% in a week earlier this month, as investors worried about how AI data center spending is being paid for.
Beats across the board
For the quarter ended Sept. 30, the numbers came in well ahead of expectations.
- Sales rose 61% to $4.31 billion (55% organic). Analysts expected $3.76 billion.
- Adjusted EPS grew 78% to $2.21. Analysts expected $1.82.
- Organic orders more than doubled from a year earlier.
- Adjusted operating margin rose 2.9 points to 25.2%.
- Full-year sales guidance rose $650 million, to a range of $14.45 billion to $14.85 billion.
CEO Giordano Albertazzi summed up demand in the earnings release: “We are in the middle of the largest infrastructure buildout and it’s accelerating.”
TIKR tracks 30 analysts on Vertiv. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Vertiv, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Vertiv’s Analyst Ratings
So much for peak AI spending
That goes a long way toward answering October’s worries. The order figures only run through September. But management raised its outlook today, weeks into the selloff, and now expects fourth-quarter sales to grow 50% organically at the midpoint.
It also leaves analysts behind. Their $14.0 billion consensus for 2026 sales is below the low end of Vertiv’s new range. Their $6.73 for adjusted EPS falls short of the new $7.10 to $7.20 guidance. They expect EPS to keep climbing from there, to $9.19 in 2027 and $11.76 in 2028.
This year is already set to beat their number, and the fourth-quarter margin is guided as high as 26.3%. So I’d expect the later years to move up too.
Pricier after the jump
Before today, Vertiv traded at 26x forward earnings, right around its five-year average of 27x.
After the jump, it’s closer to 31x, though nowhere near the 55x it hit in May. And that’s before analysts raise their estimates.
The risk is delivery. A 50% fourth quarter is a lot to ask. Second-quarter sales came in below Vertiv’s own guidance midpoint, which management blamed on timing shifts in large projects.
The next read on demand comes when management speaks at Baird’s conference on Nov. 10. After that comes the year-end backlog in the annual report, due around February.
My take: Vertiv just did exactly what it needed to do. The stock isn’t cheap after today, but with estimates headed higher, I think it’s still worth owning at this price.
So what is Vertiv stock actually worth?
TIKR lets you forecast the future price of any stock in less than a minute. Just enter a few assumptions into TIKR’s valuation model and see what Vertiv could be worth. Start from Wall Street consensus estimates, or adjust the inputs to reflect your own view of the business. It’s free to use.
Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
