VRT: Investor Mtg Preview: Still in Hyper-Growth; Boosting Price Target

Research evidence excerpt

VRT: Investor Mtg Preview: Still in Hyper-Growth; Boosting Price Target

that consensus is

likely underestimating the growth potential at high-teens organic sales, EPS, Adj Diluted Q1 Q2 Q3 Q4

+30% incrementals, and low-20s EPS CAGR. Hyperscaler capex continues 2025 0.64A 0.95A 1.24A 1.36A

2026 1.17A 1.40E 1.81E 2.02E to be the North Star for datacenter growth, with 2026 growth estimate at 2027 1.51E 1.99E 2.42E 2.67E

80%. In addition to new product platform contributions, services should Revenue

be growing +mid-teens. 2025 2,036.0A 2,638.1A 2,675.8A 2,880.0A

• Showcasing end-to-end power and thermal trains. We expect Vertiv 2026 2,649.5A 3,368.1E 3,710.0E 4,081.1E 2027 3,392.7E 4,403.0E 4,671.8E 5,075.5E to showcase why/how they are winning in more complicated, next-gen

datacenter architecture, attributable to its scale across a broad portfolio All values in USD unless otherwise noted.

in power connection/management and cooling. Recent acquisition of Priced as of prior trading day's market close, EST (unless otherwise noted).

STL (here) enhances its capability to simulate/test and co-engineer

full cooling loops (cold plates, CDUs, secondary fluid networks) in

conjunction with the increasing heat loads from the power side.

• Upside to Vertiv’s revenue per MW. Since initially being outlined at

its 2023 investor day, Vertiv’s revenue estimate per MW at $2.75-$3.5

million could arguably see upside, following the launch of pre-fabricated,

integrated modular eHouses (OneCore).

• Capital allocation priority. We do not expect major changes to the capital

allocation strategy, likely reinforcing its focus on organic growth/ER&D,

~3% of sales in capex, complementary bolt-ons across its power and

thermal trains, and opportunistic buybacks. We expect 95%-100% FCF