Have you been paying attention to shares of Vertiv Holdings Co. (VRT)? Shares have been on the move with the stock up 28.7% over the past month. The stock hit a new 52-week high of $162.23 in the previous session. Vertiv has gained 42.2% since the start of the year compared to the 22.9% gain for the Zacks Computer and Technology sector and the -15.6% return for the Zacks Computers - IT Services industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on July 30, 2025, Vertiv reported EPS of $0.95 versus consensus estimate of $0.83.
For the current fiscal year, Vertiv is expected to post earnings of $3.82 per share on $9.97 in revenues. This represents a 34.04% change in EPS on a 24.47% change in revenues. For the next fiscal year, the company is expected to earn $4.85 per share on $11.55 in revenues. This represents a year-over-year change of 26.9% and 15.8%, respectively.
Valuation Metrics
While Vertiv has moved to its 52-week high in the recent past, investors need to be asking, what is next for the company? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
Vertiv has a Value Score of D. The stock's Growth and Momentum Scores are A and D, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 42.3X current fiscal year EPS estimates, which is a premium to the peer industry average of 17.1X. On a trailing cash flow basis, the stock currently trades at 44.4X versus its peer group's average of 14.6X. Additionally, the stock has a PEG ratio of 1.43. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this is even more important than the company's VGM Score. Fortunately, Vertiv currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Vertiv fits the bill. Thus, it seems as though Vertiv shares could still be poised for more gains ahead.
How Does VRT Stack Up to the Competition?
Shares of VRT have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Leidos Holdings, Inc. (LDOS). LDOS has a Zacks Rank of #2 (Buy) and a Value Score of B, a Growth Score of B, and a Momentum Score of C.
Earnings were strong last quarter. Leidos Holdings, Inc. beat our consensus estimate by 22.05%, and for the current fiscal year, LDOS is expected to post earnings of $11.22 per share on revenue of $17.15 billion.
Shares of Leidos Holdings, Inc. have gained 7.8% over the past month, and currently trade at a forward P/E of 17.07X and a P/CF of 15.24X.
The Computers - IT Services industry is in the top 31% of all the industries we have in our universe, so it looks like there are some nice tailwinds for VRT and LDOS, even beyond their own solid fundamental situation.
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Vertiv Holdings Co. (VRT): Free Stock Analysis Report Leidos Holdings, Inc. (LDOS): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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