Oppenheimer has maintained a positive outlook on Vertiv Holdings Co. (NYSE: NYSE:VRT), increasing its price target to $121 from the previous $115, while keeping an Outperform rating on the stock.
Shares of Vertiv experienced a mid-single-digit percentage drop on Wednesday, despite the company reporting third-quarter earnings that surpassed both top and bottom-line expectations set by consensus.
Vertiv also provided guidance for the fourth quarter of 2024, with EBIT and EPS midpoints above analyst predictions, and revealed expectations for above-consensus organic growth for the fiscal year 2025.
The analyst noted that the decision to stop providing order guidance, which was factored into Wednesday's trading, might lead to less volatility in Vertiv's shares in the future. The company's business prospects remain robust, with an expanding pipeline driven by the ongoing customer shift to high-compute density environments.
Vertiv's management has expressed optimism about the growth potential in liquid cooling technology, supported by the company's comprehensive expertise and swift expansion of capacity.
In other recent news, Vertiv Holdings Co reported a strong Q3 performance, with significant increases in key financial areas. The company experienced a 19% increase in organic sales and a 37% growth in orders, leading to an adjusted operating profit of $417 million. Consequently, Vertiv raised its full-year guidance, now expecting a 14% organic growth and $1 billion in adjusted free cash flow.
In addition to its financial achievements, Vertiv announced a partnership with NVIDIA (NASDAQ:NVDA) to co-develop power and cooling solutions and plans to expand its liquid cooling capacity by 45 times by the end of 2023. Despite a modest slowdown in order growth and increased lead times, the company remains optimistic about its position in the liquid cooling market and its strong order conversions.
InvestingPro Insights
Vertiv Holdings Co. (NYSE:VRT) continues to demonstrate strong financial performance, aligning with Oppenheimer's optimistic outlook. According to InvestingPro data, Vertiv's revenue growth stands at 13.2% for the last twelve months as of Q3 2024, with an impressive quarterly revenue growth of 18.99% in Q3 2024. This robust growth supports the analyst's positive view on the company's business prospects.
InvestingPro Tips highlight that Vertiv is expected to grow its net income this year, which corresponds with the company's strong earnings report and above-consensus guidance. Additionally, the tip indicating a "high return over the last year" is reflected in the remarkable 178.04% price total return over the past year.
The company's financial health appears solid, with InvestingPro noting that Vertiv "operates with a moderate level of debt." This financial stability could be crucial as the company expands its capacity and invests in growth areas like liquid cooling technology.
For investors seeking more comprehensive analysis, InvestingPro offers 14 additional tips for Vertiv, providing a deeper understanding of the company's financial position and market performance.
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