Vertiv Holdings (VRT) Reports Q4
Shares of Vertiv (VRT) have been flat (at best) to down around 10% today after the company reported Q4 results prior to market open. While the stock’s action today isn’t confidence-inspiring, it’s likely a reflection of super high expectations heading into the event and some turbulence in growth-oriented areas of the market.
The bottom line is that Vertiv’s (a play on AI/tech infrastructure) revenue ($1.87 billion, +12.7%) missed expectations by a hair while earnings per share ($0.56, +100%) surpassed expectations by nearly 5%. Orders grew by 24%, well above expectations for around 10% and solidly above the necessary threshold of 18%+-.
Turning to the all-important 2024 guidance, management bumped up previous ranges and gave initial revenue guidance of $7.52 - $7.66 billion, effectively straddling consensus, and implied EPS is right around consensus at $2.24, probably a little lighter than the market would have preferred (some moving parts such as taxes dampening this). On the conference call, there was some talk about conservatism in Q1 due to seasonal factors.
Stepping back, I think management tried to strike a conservative tone so that market expectations didn’t fly out of control, especially given the strong run in VRT stock leading into the event. As for what happens next, in the short term, VRT’s character will likely depend on NVDA’s earnings (after the close today) and action, and the general direction of other AI/infrastructure stocks.
The growth story is alive and well, but that doesn’t mean that investor risk appetite is unlimited. As for us, I’m moving VRT to hold today (we’re up about 17%) so we can give the stock a few sessions to digest this earnings report and NVDA tonight. HOLD
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