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Vertiv VRT shares have plunged 19% year to date, underperforming the broader Zacks Computer and Technology sector’s 10.6% decline and the Zacks Computers - IT Services industry’s fall of 11.8%.
Vertiv’s share price has declined due to increasing macroeconomic challenges and U.S. President Donald Trump’s decision to impose tariffs on top trading partners, including China, Mexico and Canada, which has increased the chances of a trade war.
VRT stock has underperformed its closest peer, Eaton ETN, which is making strong efforts to advance its sustainable energy solutions and expand its market presence. Eaton has invested more than $8 billion in transformative portfolio management, but Eaton's shares have plunged 11.3% in the year-to-date period.
However, VRT’s extensive product portfolio, which spans thermal systems, liquid cooling, UPS, switchgear, busbar and modular solutions, is noteworthy. In the trailing 12 months, organic orders grew approximately 20%, with a book-to-bill of 1.4 times for the first quarter of 2025, which suggests a strong prospect. Backlog grew 10% sequentially and 25% year over year to $7.9 billion.
Can Vertiv overcome macroeconomic challenges, benefit from its strong product portfolio, and recover from its share price decline?
Vertiv’s expanding portfolio has been noteworthy. In March, Vertiv launched four new systems designed to meet the growing demands of AI applications. The four new systems include Vertiv Unify software for infrastructure management, SmartRun modular prefabricated solutions, CoolLoop RDHx high-density heat exchangers, and PowerDirect Rack high-density DC power shelves, all aimed at enhancing power efficiency, thermal management, and scalability in AI-driven data centers.
Further expanding its portfolio, Vertiv introduced the Vertiv CoolLoop Trim Cooler, enhancing air and liquid cooling solutions for AI and High-Performance Computing applications. The system offers up to 70% energy savings, 40% space reduction, and seamless integration for high-density cooling environments.
Vertiv’s rich partner base, which includes Ballard Power Systems, Compass Datacenters, NVIDIA NVDA, Intel, ZincFive, and Tecogen TGEN, is a key catalyst.
In March 2025, Vertiv announced a collaboration with Tecogen to offer advanced natural gas-powered chiller technology to data centers worldwide. This technology addresses power constraints and facilitates AI deployment at scale. Tecogen’s proven 40-year expertise in clean energy solutions enhances Vertiv’s portfolio of cooling solutions.
In April 2025, Vertiv announced a partnership with NVIDIA and iGenius to launch Colosseum, a modular, energy-efficient AI supercomputer in Italy by 2025, designed for regulated industries with NVIDIA DGX systems and Omniverse-powered digital twin technology.
For 2025, revenues are now expected to be between $9.325 billion and $9.575 billion. Organic net sales growth is likely to be between 16.5% and 19.5%.
VRT expects 2025 non-GAAP earnings per share between $3.45 and $3.65.
Previously, revenues were projected between $9.125 billion and $9.275 billion for 2025. Organic net sales growth is expected to be between 15% and 17%. VRT projected 2025 non-GAAP earnings per share between $3.50 and $3.60.
For second-quarter 2025, revenues are expected to be between $2.325 billion and $2.375 billion. Organic net sales are expected to increase in the 19% to 23% range.
VRT expects second-quarter 2025 non-GAAP earnings per share between 77 cents and 85 cents.
The Zacks Consensus Estimate for Vertiv's second-quarter 2025 revenues is $2.27 billion, suggesting growth of 16.48% year over year.
The Zacks Consensus Estimate for second-quarter 2025 earnings is pegged at 82 cents per share, which has decreased 9.8% in the past 30 days. The figure calls for a year-over-year increase of 22.39%.
The Zacks Consensus Estimate for Vertiv’s 2025 revenues is pegged at $9.51 billion, suggesting growth of 18.71% year over year.
The Zacks Consensus Estimate for 2025 earnings is pegged at $3.55 per share, which has decreased 1.11% over the past 30 days. This indicates a 24.56% increase from the 2024 reported figure.
Vertiv Holdings Co. price-consensus-chart | Vertiv Holdings Co. Quote
VRT’s earnings beat the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 10.42%. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
Vertiv is currently overvalued, as suggested by a Value Score of C.
In terms of the trailing 12-month Price/Book, Vertiv is currently trading at 12.19X, compared with the broader Computer and Technology sector’s 8.90X.
Vertiv is benefiting from its strong portfolio and rich partner base, which are driving order growth. However, macroeconomic uncertainties, stiff competition and stretched valuation are headwinds that make VRT stock a risky bet.
VRT currently has a Zacks Rank #3 (Hold), which implies that investors should wait for a more favorable entry point to accumulate the stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).
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