VRT · Earnings performance and valuation sensitivity
The company is profitable; the gap between the base valuation scenario and the reference price is limited.
The base scenario needs $17.5bn CY2027 sales and a 23% GAAP-like operating margin: 25% sales growth from 2026 guidance midpoint, plus margin improvement. It is a research assumption, not company guidance.
Dated reference：USD 241.49 ·
Major downside risks：Delivery delays, weaker pricing or reversing customer advances can hurt profit and cash together. Acquiring UIG adds $1.45bn upfront cash plus up to $1.15bn contingent cash.
Follow-up review points：Q3 results expected October/November 2026 (date unconfirmed); UIG closing announced for Q4 2026. Check revenue against $3.65–3.85bn Q3 guidance and actual acquisition funding. Track reported earnings, acquisition progress and financing effects against the stated scenarios. Valuation multiples are research assumptions; the bull scenario alone does not establish investment value.
Assumptions, capital structure and sources
EBIT means operating profit after depreciation, amortization and stock compensation.
EV/EBIT after depreciation, amortization, rent and stock compensation. The dated price and mixed-date capital structure imply about 33.5× 2026 guided GAAP EBIT before UIG adjustments. Research multiples 20/28/35× stress contraction, normalization and a sustained premium. They are not observed peer medians.
Cash scenarios deduct UIG upfront, contingent reserves and $234.6m legacy acquisition consideration once. Debt stays $2,967.2m as an assumption; pension $76.5m is deducted separately. Preferred/NCI assumed absent. Shares rise to 395/398/402m, distinct from weighted EPS shares. The displayed range tests an additional $0–316.4m lease deduction because the reviewed Q2 report does not separately disclose the long-term finance/operating split. Current operating leases of $82.0m are disclosed in Note 8; the sensitivity range is not a verified bound on all lease obligations.
- Actual outstanding Class A common
- 384.988173 million · 2026-07-27 Source ↗
- Cash + short-term investments
- $3,110.6 million · 2026-06-30 Source ↗
- Debt principal
- $2,967.2 million · 2026-06-30 Source ↗
- UIG cash purchase price / maximum contingent cash
- $1,450 / $1,150 million · 2026-09-02 Source ↗
- Net pension liability, carried forward as assumption
- $76.5 million · 2025-12-31 Source ↗
Bear · Research assumptions
Flat sales to the 2026 guidance midpoint despite the acquisition; 18% margin and multiple compression. Cash bridge (USDm): 3110.6 + H2 2026 owner cash 700 + 2027 owner cash 1317.5 - 1450 UIG - 0 earnout reserve - 234.6 legacy consideration -150 dividends -300 allocation = 2993.5. 2027 owner cash = (EBIT-150 interest)×75% + D&A 400 - capex 560.0 - working capital 300. This includes researcher reserves, not a cash forecast.
All amounts below are USD million; shares are million shares.
EBIT = 14,000 × 18% = 2,520
Enterprise value = 2,520 × 20 = 50,400
Common equity = 50,400 + 2,993.5 cash + 0 other assets − 2,967.2 debt − 0 preferred − 0 minority claims − 76.5 other claims = 50,349.8
Per share before additional uncertain claims = 50,349.8 ÷ 395 = $127.47
At this multiple and capital structure, matching the reference price requires the operating metric of 4,771.9 million USD.
Base · Research assumptions
25% sales growth, 23% margin versus 2026 GAAP guidance about21.1%; growth and leverage must both deliver. Cash bridge (USDm): 3110.6 + H2 2026 owner cash 900 + 2027 owner cash 2206.25 - 1450 UIG - 575 earnout reserve - 234.6 legacy consideration -150 dividends -300 allocation = 3507.25. 2027 owner cash = (EBIT-150 interest)×75% + D&A 500 - capex 700.0 - working capital 500. This includes researcher reserves, not a cash forecast.
All amounts below are USD million; shares are million shares.
EBIT = 17,500 × 23% = 4,025
Enterprise value = 4,025 × 28 = 112,700
Common equity = 112,700 + 3,507.3 cash + 0 other assets − 2,967.2 debt − 0 preferred − 0 minority claims − 76.5 other claims = 113,163.6
Per share before additional uncertain claims = 113,163.6 ÷ 398 = $284.33
At this multiple and capital structure, matching the reference price requires the operating metric of 3,416.1 million USD.
Bull · Research assumptions
50% growth and26% margin exceed current guidance; strongest execution plus preserved premium required. Cash bridge (USDm): 3110.6 + H2 2026 owner cash 1100 + 2027 owner cash 2887.5 - 1450 UIG - 1150 earnout reserve - 234.6 legacy consideration -150 dividends -300 allocation = 3813.5. 2027 owner cash = (EBIT-150 interest)×75% + D&A 650 - capex 945.0 - working capital 800. This includes researcher reserves, not a cash forecast.
All amounts below are USD million; shares are million shares.
EBIT = 21,000 × 26% = 5,460
Enterprise value = 5,460 × 35 = 191,100
Common equity = 191,100 + 3,813.5 cash + 0 other assets − 2,967.2 debt − 0 preferred − 0 minority claims − 76.5 other claims = 191,869.8
Per share before additional uncertain claims = 191,869.8 ÷ 402 = $477.29
At this multiple and capital structure, matching the reference price requires the operating metric of 2,751.7 million USD.
Same business outcome, different valuation multiple
Fix revenue, margin, cash, debt and shares at the base assumptions. These are valuation stress choices, not peer medians.
Evidence and model limitations：UIG terms disclose $1.45bn upfront cash at approximately 13× management-expected 2027 target EBITDA; this is not independently verified historical target earnings or a final purchase-price allocation. The model’s valuation multiples are scenario assumptions, not peer comparisons or consensus estimates. The Q2 report discloses $316.4m of long-term lease liabilities and $82.0m of current operating leases, but does not separately identify the long-term finance/operating split. The $76.5m pension deduction carries forward the December 2025 balance as an assumption. Future awards and acquisition outcomes remain scenario inputs.
- Q2 2026 SEC financial report ↗ · 2026-07-29
- Quarterly earnings release and guidance ↗ · 2026-07-29
- Vertiv 2025 annual report ↗ · 2026
- Vertiv UIG acquisition Form 8-K ↗ · 2026-09-02
- Vertiv UIG acquisition announcement ↗ · 2026-09-02