Vertiv Holdings Co-A (NYSE:VRT) Fits Key Growth Stock Criteria from 'The Little Book That Makes You Rich'

Investors looking for high-growth chances often use methodical processes for finding firms with good momentum and sound foundational health. One such system comes from Louis Navellier's "The Little Book That Makes You Rich," which describes eight particular standards for choosing leading growth stocks. These guidelines concentrate on earnings estimate changes, earnings report beats, revenue increases, operating margin improvement, cash flow health, profit growth, profit momentum, and return on equity. When used with a strict filtering process, this system can identify firms displaying outstanding operational results and growth path.

Fitting the Little Book Standards

Vertiv Holdings Co-A (NYSE:VRT) displays good agreement with Navellier's growth investment ideas in several areas. The firm's foundational numbers present solid proof of operational quality and speeding up business results.

• Positive Earnings Estimate Changes: Analyst EPS forecasts for the next quarter have been increased by 8.58% during the last three months, showing rising confidence in short-term earnings. This standard is important because higher estimates can indicate analysts have gotten good signals about future results.

• Good Earnings Report Beats: Vertiv has beaten earnings forecasts in each of the previous four quarterly announcements, with an average beat of 14.89%. Steady positive beats make analysts repeatedly re-evaluate their projections, possibly leading to higher share prices.

• Speeding Up Revenue Increases: The firm shows healthy revenue growth with 28.76% year-over-year increase and 29.02% quarter-over-quarter increase. Navellier notes that growth stocks need to show they are truly selling more goods or services as time passes.

• Improving Operating Margins: Operating margins have gotten better by 11.67% over the last year, showing the firm is increasing sales while managing expenses well. This improvement points to pricing strength and operational effectiveness.

• Healthy Cash Flow Production: Free cash flow has jumped by 127.47% year-over-year, giving financial room for new projects, purchases, or investor benefits. Sound cash flow makes sure the firm can pay for its own growth plans.

• Profit Growth Momentum: Vertiv displays notable EPS increase of 57.85% year-over-year and 63.16% quarter-over-quarter. More significantly, current quarterly EPS increase of 63.16% is higher than the last similar quarter's increase of 46.15%, showing speeding up momentum.

• Leading Return on Equity: With a ROE of 29.48%, Vertiv is well above the system's 10% minimum, showing effective use of investor money to create earnings.

Foundational Review

Based on ChartMill's full examination, Vertiv gets a good foundational rating of 7 out of 10. The firm does very well in profitability with a score of 9, led by outstanding return numbers and improving margins. Financial health metrics score 8, showing good solvency and acceptable debt levels. Growth metrics score 8, backed by strong past performance and good future prospects.

The valuation story shows a varied picture. While standard P/E ratios seem high, the firm's special growth rates and profitability could support higher multiples. The PEG ratio, which includes growth forecasts, indicates a more fair valuation when future earnings possibilities are factored in. The complete foundational review offers more detail on these factors.

Investment Points

Vertiv works in the important digital infrastructure sector, supplying technology and services for data centers, communication networks, and commercial settings. This place in increasing end-markets backs the firm's sound foundational performance. The mix of speeding up growth, improving profitability, and healthy cash production matches well with the features Navellier looks for in growth investments.

While the Little Book system helps find interesting options, investors should remember that growth investment holds particular risks, especially about valuation and how long high growth rates can last. The present market situation, with both long-term and short-term S&P 500 trends good, might be supportive for growth plans, though market states can shift quickly.

For investors wanting to find other firms that fit the Little Book standards, the filtering system is open to the public and can be adjusted based on personal risk comfort and market view.

Discover more stocks meeting the Little Book criteria through our customized screening tool

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Disclaimer: This article presents factual information and analysis for educational purposes only and does not constitute investment advice, recommendation, or endorsement of any security. Investors should conduct their own research and consult with financial advisors before making investment decisions. Past performance does not guarantee future results, and all investments carry risk including potential loss of principal.