Results: Vertiv Holdings Co Beat Earnings Expectations And Analysts Now Have New Forecasts
The full-year results for Vertiv Holdings Co (NYSE:VRT) were released last week, making it a good time to revisit its performance. It looks like a credible result overall - although revenues of US$6.9b were in line with what the analysts predicted, Vertiv Holdings Co surprised by delivering a statutory profit of US$1.19 per share, a notable 16% above expectations. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
View our latest analysis for Vertiv Holdings Co
After the latest results, the twelve analysts covering Vertiv Holdings Co are now predicting revenues of US$7.61b in 2024. If met, this would reflect a solid 11% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to shoot up 57% to US$1.89. Before this earnings report, the analysts had been forecasting revenues of US$7.53b and earnings per share (EPS) of US$1.80 in 2024. So the consensus seems to have become somewhat more optimistic on Vertiv Holdings Co's earnings potential following these results.
The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 18% to US$66.38. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Vertiv Holdings Co, with the most bullish analyst valuing it at US$75.00 and the most bearish at US$45.50 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Vertiv Holdings Co shareholders.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We can infer from the latest estimates that forecasts expect a continuation of Vertiv Holdings Co'shistorical trends, as the 11% annualised revenue growth to the end of 2024 is roughly in line with the 11% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 7.7% per year. So although Vertiv Holdings Co is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Vertiv Holdings Co's earnings potential next year. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Vertiv Holdings Co analysts - going out to 2026, and you can see them free on our platform here.
It is also worth noting that we have found 1 warning sign for Vertiv Holdings Co that you need to take into consideration.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
