VRT

We rate Vertiv Holdings Co (VRT) as a Hold with a composite score of 62.7/100 at a current price of $254.33. The stock presents a mixed quantitative picture — neither compelling enough to warrant new accumulation nor weak enough to justify selling for existing holders. Our factors are split, and the overall profile suggests patience is warranted.

The rating is primarily driven by strength in momentum (78th percentile) and quality (72th percentile), which together account for the majority of the composite score. Offsetting weakness in investment (29th percentile) and stability (36th percentile) tempers our overall conviction. We assign a Wide Moat rating (72/100), High uncertainty, and Standard capital allocation.

Key items to watch: sustainability of the current growth rate. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.

Vertiv Holdings Co holds a top-quartile position (#0 of 50) within the Manufacturing sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 62.7/100 places it at rank #446 in our full 7,333-stock universe. With a $57.6B market capitalization, Vertiv Holdings Co operates at meaningful scale within the Manufacturing sector, providing competitive advantages in distribution, procurement, and customer reach.

The near-term outlook is constructive, with revenue growing at 37% and momentum in the 78th percentile confirming positive market sentiment and institutional accumulation. The combination of strong top-line growth and favorable price dynamics suggests the company is executing well on its growth strategy. Investment factor at the 29th percentile indicates reinvestment patterns that investors should monitor for sustainability.

The margin cascade tells an important story: gross margins of 35% (-7.0pp vs sector) narrow to operating margins of 17% (+15.8pp vs sector) and net margins of 10.9%, yielding a gross-to-net conversion rate of 31%. This efficient conversion suggests well-controlled operating costs and limited margin leakage between the gross and net levels.

At a current price of $254.33, Vertiv Holdings Co is trading near fair value based on current fundamentals. Our value factor score of 61/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. Valuation metrics are mixed, with no strong signal of mispricing in either direction.

The stock currently trades at a P/E of 87.7x (a 294% premium to the sector median of 22.3x), EV/EBITDA of 59.3x (at a premium), P/B of 23.7x, P/S of 9.9x. The above-sector P/E multiple suggests the market is pricing in superior growth or quality, which our analysis partially supports given strong quality metrics.

We assign a High uncertainty rating to Vertiv Holdings Co. Key risk factors include elevated market sensitivity (beta of 2.15), below-average price stability (36th percentile), elevated valuation multiple (P/E 87.7x) that leaves limited margin for error. The wide range of potential outcomes widens our fair value estimate and increases the possibility of permanent capital impairment. Investors considering this name should size positions accordingly and demand a meaningful margin of safety before initiating.

Specific risk factors that inform our assessment include: elevated market sensitivity (beta of 2.15); below-average price stability (36th percentile); elevated valuation multiple (P/E 87.7x) that leaves limited margin for error. Each of these factors independently widens the distribution of potential outcomes, and in combination they create a risk profile that demands careful position sizing. The stability factor at the 36th percentile and quality factor at the 72th percentile provide a quantitative summary of the overall risk landscape.

Key risk mitigants include: large-cap scale ($57.6B) provides resilience. These factors partially offset the identified risks and provide downside protection in adverse scenarios. On balance, the risk-reward profile warrants caution and disciplined position management.

We rate Vertiv Holdings Co's capital allocation as Standard. Management has shown adequate — though not exceptional — stewardship of shareholder capital. Returns on equity stand at 27.0%, and the balance sheet is managed within acceptable parameters (D/E: 74%). Exemplary allocators typically sustain ROE above 20% and D/E below 50%; Vertiv Holdings Co falls short on at least one dimension.

There is room for improvement in optimizing the capital structure or enhancing shareholder returns. The 0.10% dividend yield provides some income return, but the overall capital allocation framework would benefit from either higher reinvestment returns, improved balance sheet efficiency, or increased shareholder distributions. We will monitor for signs of strategic improvement that could warrant an upgrade.

In summary, Vertiv Holdings Co receives a Hold rating with a composite score of 62.7/100 (rank #446 of 7,333). Our quantitative framework assigns a Wide Moat (72/100, trend: stable), High uncertainty, and Standard capital allocation. The average factor score across quality, value, momentum, stability, and investment is 55/100.

Our analysis supports a neutral stance on Vertiv Holdings Co. While the quantitative profile is not weak enough to warrant selling, it lacks the multi-factor strength required for a buy recommendation. Existing holders should maintain positions and monitor for catalysts — either fundamental improvement or valuation compression — that would shift the risk-reward balance.