Vertiv Holdings Co-A (NYSE:VRT): An Affordable Growth Candidate in Digital Infrastructure

Investors looking for growth chances at fair prices often use screening methods that find companies showing good expansion potential without high prices. The "Affordable Growth" method focuses on stocks with strong growth features, good profitability, and sound financial bases while steering clear of expensive situations. This system balances the search for expansion with price control, trying to capture companies set for continued success without paying high multiples.

Vertiv Holdings Co-A (NYSE:VRT) appears as an interesting candidate through this screening view. The company plans, makes, and maintains important digital infrastructure technology for data centers, communication networks, and business settings, placing it where several long-term technology trends meet.

Growth Path

Vertiv shows very good growth features that build the base of its investment case. The company's recent results display notable expansion in important financial measures:

• Earnings Per Share rose 57.85% over the last year with a five-year average yearly growth rate of 55.36%
• Revenue grew 28.76% in the last year, keeping a good 12.57% compound yearly growth rate over several years
• Future estimates point to continued growth with EPS predicted to grow 25.17% each year and revenue expected to rise 16.01%

This mix of good past performance and positive future estimates gives belief in the company's ability to keep its growth speed. The quickening in revenue growth expectations implies the company is gaining market share in the growing digital infrastructure field.

Price Thoughts

While Vertiv sells at a higher price based on standard earnings multiples, several points support its current price within the affordable growth structure:

• The forward P/E ratio of 37.77 stacks up well against industry friends, with 67.39% of rivals trading at higher multiples
• Enterprise Value to EBITDA and Price/Free Cash Flow ratios both show Vertiv trades for less than about 70% of industry matches
• The PEG ratio, which changes for growth expectations, hints at fair price given the company's expansion outlook
• Very good profitability measures help support higher multiples, as high-quality earnings often get higher prices

Profitability Level

Vertiv's excellent profitability picture gives important backing for its growth story and price:

• Return on Equity of 29.48% places in the top 4% of industry friends
• Operating Margin of 18.03% beats 92% of rivals, showing efficient operations
• Profit Margin of 10.67% does better than 86% of the industry, with steady betterment in recent years
• Return on Invested Capital of 18.23% tops 97% of similar companies

These measures show the company not only grows fast but does so profitably, a main difference that separates lasting growth tales from speculative expansions.

Financial State

The company keeps a sound financial base that backs its growth plans:

• Altman-Z score of 7.58 shows low bankruptcy danger and beats 90% of industry friends
• Debt to Free Cash Flow ratio of 2.14 shows good solvency, better than 87% of rivals
• Current and quick ratios imply enough cash for daily operations
• The company makes much value with ROIC greatly passing its cost of capital

This financial steadiness gives important strength during economic doubts and lets continued spending in growth projects without heavy need for outside money.

Market Placement

Vertiv's business plan fits with several big long-term trends, including the growth of data centers, rise in cloud computing, and more need for reliable digital infrastructure. The company's full offering across power management, thermal management, and combined solutions makes a varied revenue base while meeting key customer needs in a more digital economy.

The mix of good growth, fair price relative to growth outlook, excellent profitability, and sound financial state makes Vertiv a noteworthy candidate for investors looking for affordable growth chances. The company shows that high-level growth features can sometimes be found at fair prices when studied through a full basic lens.

For investors wanting to look into similar chances, more affordable growth candidates can be found through our dedicated screening tool that uses steady rules across the market space.

Disclaimer: This study is based on basic data and screening rules for information only. It does not make investment advice, and investors should do their own research and think about their personal money situation before making investment choices. Past results do not promise future results, and all investments carry built-in risks.