TenQ

The Vertiv story

Vertiv provides power, cooling and services for digital infrastructure, with the central question whether it can turn its expanding data center backlog into deliveries while scaling capacity and preserving margins.

Vertiv stock reportTenQ Score 22/36 · every chart and check from its filings
  • $206.42share price, last close
  • $79.5Bmarket value
  • 22/36TenQ Score checks passed
  • 12.0%growth a year the price assumes

The story in brief

  • Demand meets execution. Sales reached $3,274 million in the quarter to June 2026, up 24%, but temporary supply chain congestion and increasingly complex deployments shifted some revenue timing.
  • Margins and cash expanded. In the quarter to June 2026, adjusted operating margin reached 22.6%, up 410 basis points, while adjusted free cash flow rose 234% to $925 million.
  • Power capabilities broaden. The September 2026 agreement to acquire UtilityInnovation Group would extend Vertiv into microgrid controls, onsite generation coordination and power architecture connecting data centers to the grid.

What drives the business

  • Vertiv designs, manufactures and services power and cooling infrastructure for data centers, communication networks and industrial facilities, including liquid cooling, switchgear, energy storage and modular systems supporting increasingly dense AI computing.
  • Its geographic segments generated 62% of sales in the Americas, 20% in Asia Pacific and 18% in Europe, Middle East and Africa in 2025.
  • Order backlog reached $15.0 billion at December 2025, compared with $7.2 billion at December 2024, with the majority expected at that date to ship within 12 to 18 months.
  • The approximately $1.0 billion PurgeRite acquisition in December 2025 added specialized fluid management services, the ThermoKey acquisition in June 2026 expanded heat rejection capabilities, and the September 2026 King Environmental Services agreement would extend fluid management services into Europe, Middle East and Africa.
  • The UtilityInnovation Group agreement calls for approximately $1.45 billion in cash at closing to add capabilities intended to help data center operators secure power faster as grid constraints limit deployment.

What the price assumes

At $253.14, the reverse DCF implies free cash flow after stock pay growing 15.1% a year for ten years, using a 10.3% discount rate.

That compares with delivered growth of 57.2% a year over the last 2 fiscal years and the TenQ check's 30.6% bar, which slows that record halfway toward 4%.

The implied growth clears that check, but the 3.0% free cash flow yield is below its historical 3.4%, and the 1.8% earnings yield trails the 5.3% Treasury yield.

Value VRT on your own assumptions

What could change the story

  • Backlog can be canceled or rescheduled, and the delivery shifts in the quarter to June 2026 show that strong orders do not necessarily become revenue on the original schedule.
  • Cash generation in the quarter to June 2026 benefited from $451.0 million of working capital inflows, so the strength of cash conversion depends partly on movements in customer payments, inventory and supplier balances.
  • The margin expansion in the quarter to June 2026 relied partly on favorable pricing relative to costs and tariff countermeasures, leaving execution, production costs and trade policy important to sustaining profitability.
  • TenQ's liquidity check records 1.38 against a 1.50 bar, despite Vertiv reporting a net cash position at June 2026.
  • The UtilityInnovation Group agreement adds potential cash consideration of up to $1.15 billion based on earnings performance, alongside the integration demands of Vertiv's expanding acquisition program.

What to watch next

  • For the third quarter of 2026, Vertiv expects sales of $3,650 million to $3,850 million and organic growth of 34% to 36%, making delivery timing and capacity expansion central measures of execution.
  • Its third quarter of 2026 adjusted operating margin guidance of 24.0% to 25.0% sets a further step above the 22.6% achieved in the quarter to June 2026.
  • Full year 2026 guidance calls for sales of $13,800 million to $14,200 million and organic growth of 30% to 32%, while capital expenditures are expected to be approximately 4.0% of revenue.
  • Subsequent releases can show whether working capital continues to support cash generation and how the UtilityInnovation Group and King Environmental Services transactions progress.

Sources

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