QS Research · Michael Burry's Scion Capital analyst template · 2006
Vertiv Holdings Co (VRT)
As of 2026-11-08 · 13/15 boxes filled from SEC filings and market data
Conclusion: WATCH
Conviction low · base case +0% · downside -25% · upside +18%
Q3 2026 shows real operating momentum: net sales rose 61.2% to $4,312.8M, organic orders grew more than 100%, adjusted operating margin was 25.2%, and FY2026 guidance was raised to $14.45-$14.85B sales and $7.10-$7.20 adjusted EPS (S29, S31, S5). But the market already pays 33.6x TTM P/E and 22.8x EV/EBITDA (N30, N27), so at today's multiple the base case is roughly flat: $2.10B TTM net income x 33.6x = $70.56B market cap, only +0.2% versus today's $70.41B (N14, N30, N8). A low-peer 25.0x P/E gives about $136/share, or -25.4%, while a high-peer 39.6x P/E gives about $216/share, or +18.1% (S1). The drawdown is multiple/execution-driven rather than earnings-driven, and at this price there is no deep-value margin of safety; watch for either a further multiple reset or proof that capacity-ramp and working-capital drags are temporary.
Key numbers
- Share price: $182.86
- Market cap: $70.41B
- Latest financial period: TTM to Sep 30, 2026
- Revenue (TTM): $13.12B
- EV / EBITDA (TTM): 22.8x
- P/E (TTM): 33.6x
- Price / book: 12.80x
The 15 boxes
- ✓ 1. Long-form business notes
Vertiv sells power, thermal, rack and services gear into data centers, communication networks and commercial/industrial sites through three geographic segments (Americas, Asia Pacific, EMEA), mostly on direct sales backed by channel partners. The FY2025 10-K shows the business has roughly doubled since FY2024 and more than doubled since FY2020: net sales were $10,229.9 in FY2025 versus $8,011.8 in FY2024 and $4,370.6 in FY2020, with the Americas share rising from 47% (FY2020) to 62% (FY2025). The visible change agent is backlog and AI-oriented product: estimated combined backlog was $15.0 billion at December 31, 2025 against $7.2 billion a year earlier and $1,844.8 at December 31, 2020, with the ship window lengthening from 'within one year' in the FY2020 filing to 'the next 12 to 18 months' in the FY2025 filing. XBRL shows operating income of $1.83B and operating cash flow of $2.11B in FY2025, versus $213.5M and $208.9M in FY2020.
- ✓ 2. Competitive advantage
The record supports scale, portfolio breadth and a global service network more than it supports a clean pricing moat. Vertiv competes with both niche and large global rivals on reliability, quality, price, service and customer relationships, and its own risk factors cite large-customer pricing pressure. FY2020-FY2025 operating income grew from $213.5M to $1.83B on revenue of $4.37B to $10.23B, with FY2025 operating cash flow of $2.11B; the sources give no ROIC, gross margin or market share.
- ✓ 3. 10-Q takeaways
Q3 2026 (quarter ended 2026-09-30) was an acceleration, not a deceleration: net sales $4,312.8 million, +61.2% year over year, of which 55% organic and ~6% from acquisitions, with organic orders up more than 100% year over year. Gross margin edged to 38.1% of sales from 37.8%, adjusted operating margin to 25.2% (+290 bps), and GAAP operating profit nearly doubled to $983.8 million; net income of $764.5 million carries small non-operating help from an $18.1 million mark-up of non-marketable securities. Nine-month sales were $10,236.6 million (+39.3%) with operating cash flow of $2,660.6 million versus $1,108.9 million, funding capex that the 10-Q puts at $575.0-$600.0 million for FY2026. Management raised FY2026 guidance across all key metrics in the same-day release (net sales midpoint $14,650 million, adjusted diluted EPS $7.10-$7.20, adjusted free cash flow $2,600-$2,800 million).
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ✓ 11. Impression of the shareholder letter
Filled; members read this box.
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
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