Vertiv Holdings Co

Where It Passes

Where It Falls Short

• Valuation models0% pass✗ 11▾

  VRT overvalued: all 11 models price fair value below $202.07 (median $29.40)

  Graham fair value$28.11

  ✗Graham-618.9% margin vs $202.07

  Buffett fair value$43.90

  ✗Buffett-360.3% margin vs $202.07

  Lynch fair value$85.25

  ✗Lynch-137.0% margin vs $202.07

  Greenblatt fair value$28.01

  ✗Greenblatt-621.4% margin vs $202.07

  Dreman fair value$29.40

  ✗Dreman-587.3% margin vs $202.07

  Munger fair value$118.07

  ✗Munger-71.1% margin vs $202.07

  Pabrai fair value$65.63

  ✗Pabrai-207.9% margin vs $202.07

  Akre fair value$13.39

  ✗Akre-1409.1% margin vs $202.07

  Marks fair value$2.36

  ✗Marks-8462.3% margin vs $202.07

  Ackman fair value$177.32

  ✗Ackman-14.0% margin vs $202.07

  Templeton fair value$18.51

  ✗Templeton-991.7% margin vs $202.07
• Valuation8% pass✓ 3✗ 25▾

  12 of 13 flag VRT's valuation — Graham, Greenblatt, Dreman +9 more

  Price / 3-yr avg EPS103.1x

  ✗Graham<= 15x

  Price-to-Book Ratio19.6x

  ✗Graham<= 1.5x

  P/E x P/B2,022.3

  ✗Graham<= 22.5

  Basic earnings-growth PEG (dividends excluded)0.75

  ✓Lynch< 1.0 (ideally < 0.5)

  EBIT / Enterprise Value3.4%

  ✗Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=3.4%, ROC=215.2%

  ✗GreenblattBoth EY > 10% and ROC > 25%

  Price / EPS59.3x

  ✗Dreman< 12x✗Templeton< 12x (fixed ceiling; proxy for the market's cheapest 40%)

  Price / (CFO / Shares)36.6x

  ✗Dreman< 8x

  Price / Book Value per Share19.6x

  ✗Dreman< 1.2x✗Templeton< 1.5x✗SchlossP/B <= 0.80x (app cutoff)

  Valuation ReasonablenessP/E=59.3x, OE Yield=1.8%

  ✗MungerP/E < 25 or Owner Earnings Yield > 5%

  P/E or FCF YieldP/E=59.3x, FCF Yield=2.4%

  ✗PabraiP/E < 15 or FCF Yield > 10%

  P/B or P/E vs. Historical AverageP/E=59.3x, P/B=19.6x

  ✗MarksP/E < 15 or P/B < 2.0

  Discount to Intrinsic Value-587.3% (IV=$29.40 vs Price=$202.07)

  ✗Marks>= 20% below intrinsic value

  Price / FCF per Share40.8x

  ✗Ackman<= 25

  Price vs. Trailing Low280% of trailing low ($72.20)

  ✗Templeton<= 120% of trailing low (certified split-adjusted live window)

  Net income / market capitalization+2.70%; #2488/6340 (top 39.2%)

  ✗AsnessTop 30% of eligible cross-section✗OshaughnessyTop 10% of eligible cross-section

  Positive book equity / market capitalization+0.0707; #4897/6449 (top 75.9%)

  ✗AsnessTop 30% of eligible cross-section

  Price / Diluted EPS59.3x

  ✗NeffP/E <= 15x (app proxy for a P/E 40%-60% below the market)

  (EPS CAGR % + Dividend Yield %) / P/E1.34

  ✓Neff> 0.7 (Neff's published traditional edge)

  Price / Tangible Book Value per Share6039.97x

  ✗SchlossP/TBV <= 1.00x (app cutoff)

  Book Value per Share Change+588.0%

  ✓SchlossLatest BVPS >= earliest BVPS over >= 3 years (app rule)

  Revenue / market capitalization+0.1686; #3939/5247 (top 75.1%)

  ✗OshaughnessyTop 10% of eligible cross-section

  (Operating cash flow - capex) / market capitalization+4.01%; #1791/4519 (top 39.6%)

  ✗OshaughnessyTop 10% of eligible cross-section

  Trailing six-month price return through the evaluation date-38.49%; #4745/6202 (top 76.5%)

  ✗OshaughnessyTop 10% of eligible cross-section
• Profitability31% pass✓ 17✗ 18▾

  11 of 16 flag VRT's profitability — Graham, Buffett, Greenblatt +8 more

  Positive EPS (10 years)4/11 years positive

  ✗GrahamPositive EPS every year for 10 years

  EPS Growth (3-yr avg, 10-yr window)

  ✗Graham>= 33% growth

  Net Income Positive (10+ years)5/11 years positive

  ✗BuffettPositive every year for 10+ years

  ROE (up to 5-year arithmetic mean)18.2%

  ✓Buffett> 15% arithmetic mean (app rule)

  Operating Margin (10-yr trend)17.9% (latest)

  ✓BuffettStable or rising over 10 years

  Free Cash Flow Proxy$1.4B

  ✓BuffettPositive and growing

  Earnings Variance (10-yr CoV)7.88

  ✗BuffettCoV < 0.3

  Retained Earnings Effectiveness

  ✗Buffett$1 retained -> > $1 market value created

  Basic earnings-growth PEG (dividends excluded)0.75

  ✓Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR79.3%

  ✓Lynch15-30% (Fast Grower); > 0% to pass

  ROE38.1%

  ✓Lynch> 15%

  EBIT / Enterprise Value3.4%

  ✗Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=3.4%, ROC=215.2%

  ✗GreenblattBoth EY > 10% and ROC > 25%

  Net Income / Total Assets10.91%

  ✓PiotroskiROA > 0

  ROA Change YoY5.43% -> 10.91% (delta: +5.48%)

  ✓PiotroskiCurrent ROA > Prior ROA

  (CFO / Total Assets) vs ROACFO/Assets=17.31%, ROA=10.91%

  ✓PiotroskiCFO/Assets > ROA

  Gross Margin Change YoY36.6% -> 36.3%

  ✗PiotroskiImproved YoY

  Pre-Tax Income / Revenue19.9%

  ✓Dreman>= 8%

  Net Income / Shareholders' Equity38.1%

  ✓Dreman> 12%

  Margin of SafetyP/E=59.3x, P/B=19.6x

  ✗PabraiP/B < 1.5 or P/E < 15

  Return on Equity25.7% (3-yr avg)

  ✓AkreROE > 20% (3-year avg)

  Discount to Intrinsic Value-587.3% (IV=$29.40 vs Price=$202.07)

  ✗Marks>= 20% below intrinsic value

  Positive Net Income Frequency5/10 years positive

  ✗MarksPositive net income in >= 7 of last 10 years

  Operating Income / Revenue20.1%

  ✓Ackman>= 15%

  Net Income / Shareholders Equity38.1%

  ✓Ackman>= 15%

  5-Year EPS CAGR79.3% CAGR over 4 years

  ✓Templeton> 0% (5-year EPS CAGR)

  Operating Margin Trend12.7% (2023) -> 17.9% (2025)

  ✓TempletonNon-negative operating-margin trend over 3 years

  Revenue growth vs. gross and operating margin trendgross margin 35.0% -> 36.3%, operating margin 12.7% -> 17.9%

  ✗SleepRevenue rising; gross margin flat or falling; operating margin holding

  Net income / market capitalization+2.70%; #2488/6340 (top 39.2%)

  ✗AsnessTop 30% of eligible cross-section✗OshaughnessyTop 10% of eligible cross-section

  Gross profit / total assets+30.42%; #1402/3702 (top 37.9%)

  ✗AsnessTop 30% of eligible cross-section

  Net income / positive book equity+38.13%; #317/5226 (top 6.1%)

  ✓AsnessTop 30% of eligible cross-section

  Negative 5-year standard deviation of ROA-0.0352; #2110/5884 (top 35.9%)

  ✗AsnessTop 30% of eligible cross-section

  3-5 Year Diluted EPS CAGR79.3% over 4 years

  ✗Neff7%-20% annualized

  Positive Diluted-EPS Years4/8 years positive

  ✗Schloss>= 70% positive over 5-10 observed years (app rule)
• Growth38% pass✓ 8✗ 5▾

  5 of 8 flag VRT's growth — Graham, Lynch, Marks +2 more

  EPS Growth (3-yr avg, 10-yr window)

  ✗Graham>= 33% growth

  Basic earnings-growth PEG (dividends excluded)0.75

  ✓Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR79.3%

  ✓Lynch15-30% (Fast Grower); > 0% to pass

  Inventory Growth vs Revenue GrowthInv: 128.8% vs Rev: 35.3%

  ✗LynchInventory growth < Revenue growth

  EPS Growth Direction$-2.65 (2018) -> $3.41 (2025)

  ✓DremanPositive over recent years

  EPS CAGR79.3% CAGR over 4 years

  ✓Dreman> 5% annualized

  Positive Net Income Frequency5/10 years positive

  ✗MarksPositive net income in >= 7 of last 10 years

  3yr Median Revenue Growth20.6%

  ✓Ackman>= 5%

  Positive EPS Growth Frequency4/5 years with positive EPS growth

  ✓AckmanPositive EPS growth in >= 3 of last 5 years

  5-Year EPS CAGR79.3% CAGR over 4 years

  ✓Templeton> 0% (5-year EPS CAGR)

  Revenue growth vs. gross and operating margin trendgross margin 35.0% -> 36.3%, operating margin 12.7% -> 17.9%

  ✗SleepRevenue rising; gross margin flat or falling; operating margin holding

  5-year Revenue CAGR18.5%

  ✓SleepCAGR > 7%

  3-5 Year Diluted EPS CAGR79.3% over 4 years

  ✗Neff7%-20% annualized
• Debt & Leverage42% pass✓ 8✗ 7▾

  7 of 12 flag VRT's debt & leverage — Buffett, Lynch, Dreman +4 more

  LT Debt vs Net Current AssetsLT Debt $2.9B vs NCA $3.4B

  ✓GrahamLT Debt <= Net Current Assets

  Debt/Equity & Interest CoverageD/E: 0.53, IC: 73.2x

  ✗BuffettD/E < 0.5 AND Interest Coverage > 5x

  Total Debt / Equity0.53

  ✗Lynch< 0.33

  Cash - Long-term Debt$587.8M

  ✓LynchPositive preferred

  LT Debt / Total Assets Change31.83% -> 23.68%

  ✓PiotroskiDecreased YoY

  Current Assets / Current Liabilities1.39

  ✗Dreman> 1.5✗SchlossCurrent ratio >= 1.50x (app cutoff)

  Total Debt / Shareholders' Equity0.53

  ✓Dreman< 0.8✓Templeton< 1.0 (fixed cap; proxy for below-sector-median leverage)✓SchlossD/E < 1.00x

  Debt Levels0.53

  ✗MungerDebt/Equity < 0.5✗AkreDebt/Equity < 0.3

  Interest Coverage & Debt/EBITDAIC=73.2x, D/EBITDA=1.0x

  ✓MarksInterest Coverage > 3x; Debt/EBITDA < 4x

  Total Debt / Shareholders Equity0.53

  ✓Ackman<= 1.0

  Negative debt-to-equity (higher means less debt)-0.5323; #2535/4210 (top 60.2%)

  ✗AsnessTop 30% of eligible cross-section
• Verdicts46% pass✓ 6✗ 7▾

  Split decision: 6 FAIL · 4 PASS · 4 NEUTRAL · 2 BUY

  Overall verdict

  ✗GrahamFAIL (2/9)✓BuffettPASS (5/9)✓LynchBUY (5/7)✗GreenblattRank #684✓PiotroskiPASS (F-Score 5)✓DremanPASS (6/11)✓MungerPASS (2/4)✗PabraiFAIL (0/3)•AkreNEUTRAL (4/6)✗MarksFAIL (2/5)✓AckmanBUY (8/9)•TempletonNEUTRAL (5/8)•SleepNEUTRAL (4/6)✗AsnessFAIL (Rank #795/2370 (Top 33.5%))•NeffNEUTRAL (4/6)✗SchlossFAIL (3/7)✗OshaughnessyFAIL (Rank #940/963 (Top 97.6%))
• Cash Flow50% pass✓ 7✗ 5▾

  5 of 10 pass — Dreman, Pabrai, Ackman +2 more object

  Free Cash Flow Proxy$1.4B

  ✓BuffettPositive and growing

  FCF Positive and Growing$3.1B

  ✓LynchPositive and growing

  Operating Cash Flow$2.1B

  ✓PiotroskiCFO > 0

  (CFO / Total Assets) vs ROACFO/Assets=17.31%, ROA=10.91%

  ✓PiotroskiCFO/Assets > ROA

  Price / (CFO / Shares)36.6x

  ✗Dreman< 8x

  P/E or FCF YieldP/E=59.3x, FCF Yield=2.4%

  ✗PabraiP/E < 15 or FCF Yield > 10%

  FCF Positive6/8 years FCF positive

  ✓MarksPositive FCF in majority of recent years

  (OCF - CapEx) / Market Cap4.0%

  ✓Ackman>= 4%

  Price / FCF per Share40.8x

  ✗Ackman<= 25

  Positive Operating Cash Flow frequency6/9 years positive

  ✗SleepPositive OCF in >= 70% of available years

  Operating Cash Flow - Capital Expenditures$3.1B

  ✓Neff> $0 (app proxy for a strong fundamental case)

  (Operating cash flow - capex) / market capitalization+4.01%; #1791/4519 (top 39.6%)

  ✗OshaughnessyTop 10% of eligible cross-section
• Efficiency50% pass✓ 6✗ 5▾

  4 of 8 pass — Graham, Piotroski, Dreman +1 more object

  Current Ratio1.39

  ✗Graham>= 2.0

  ROIC (3-5 yr avg)16.0%

  ✓Buffett> 10%

  ROIC - WACC+6.0%

  ✓BuffettPositive (WACC = 10%)

  EBIT / (NWC + Net Fixed Assets)215.2%

  ✓Greenblatt> 25%

  Current Ratio Change YoY1.65 -> 1.55

  ✗PiotroskiIncreased YoY

  Revenue / Total Assets Change YoY0.88x -> 0.84x

  ✗PiotroskiImproved YoY

  Current Assets / Current Liabilities1.39

  ✗Dreman> 1.5

  Return on Invested Capital24.8%

  ✓Munger> 15%

  ROIC (high and growing)FY2023: ROIC=13.9%; FY2024: ROIC=20.1%; FY2025: ROIC=21.1%

  ✗AkreLatest 3 consecutive FYs: ROIC > 15% in each

  Reinvestment Rate x ROIC23.6% (RR=95% x ROIC=24.8%)

  ✓AkreReinvestment Rate * ROIC > 10%

  ROIC (5-year)3/5 years above 12% (latest 21.1%)

  ✓SleepROIC > 12% in a majority of years