VRT · Forward model · Bear case
The Bear case, 20 quarters out
Each segment is projected from its own operating driver, rolled up into consolidated cash flow, and discounted back to a fair value per share. The assumptions below are editable — change them and every number on this page moves with them.
Vertiv reports THREE geographic segments — Americas, Asia Pacific, EMEA — and this model carries exactly those three. Every historical point is copied from the earnings releases; nothing is apportioned. Products vs Services & spares is also disclosed every quarter (Q2: $2,606.4M and $667.9M) but has no segment operating profit, so it lives in the notes rather than as verticals. Liquid cooling, 800 VDC and PurgeRite are collaborations, not lines. Quarter labels are calendar, matching the company: FY ends 31 December, so 2026 Q2 is the June quarter. Two reconciliation nits: the site series stores 2026 Q1 as $2,650M against the 8-K's $2,649.5M, and 2025 Q3 as $2,676M against $2,675.8M; actuals follow the filings. P&L 'net sales - products' $2,646.7M is not the offering-table Products line. Q2 2026 orders, book-to-bill and backlog were not disclosed — the $15.0B figure is Q4 2025 and is not carried forward. Segment EBITDA here is the disclosed adjusted operating margin at the reportable-segment level (no D&A split is published). Capex is not disclosed by segment; 5% current / 4% terminal is the company rate applied uniformly. netCash is cash $2,810.6M plus short-term investments $300.0M less long-term debt $2,939.8M. Each geography now carries a conservatively shrunken, two-year trend-adjusted calendar shape: Q1 trough and Q4 peak. Opening growth was recalibrated so Q3 remains inside guidance rather than treating the seasonal factor as incremental demand.
The Q2 timing miss was demand. Americas sequential growth halves, EMEA's promised H2 recovery slips a year, and the multiple compresses toward a mid-cycle electrical-equipment stock. What this case does NOT assume is a collapse in the installed-base services book, a loss of the net-cash balance sheet, or a return to 2024's margins. It says 2026 was the peak growth year for the AI-factory content cycle.
Latest: $3.68B (2031Q2E)
| Period | Value |
|---|---|
| 2024Q1 | $1.64B |
| 2024Q2 | $1.95B |
| 2024Q3 | $2.07B |
| 2024Q4 | $2.35B |
| 2025Q1 | $2.04B |
| 2025Q2 | $2.64B |
| 2025Q3 | $2.68B |
| 2025Q4 | $2.88B |
| 2026Q1 | $2.65B |
| 2026Q2 | $3.27B |
| 2026Q3E | $3.62B |
| 2026Q4E | $3.99B |
| 2027Q1E | $3.79B |
| 2027Q2E | $4.21B |
| 2027Q3E | $4.31B |
| 2027Q4E | $4.47B |
| 2028Q1E | $4.06B |
| 2028Q2E | $4.36B |
| 2028Q3E | $4.35B |
| 2028Q4E | $4.41B |
| 2029Q1E | $3.95B |
| 2029Q2E | $4.19B |
| 2029Q3E | $4.15B |
| 2029Q4E | $4.18B |
| 2030Q1E | $3.72B |
| 2030Q2E | $3.94B |
| 2030Q3E | $3.89B |
| 2030Q4E | $3.91B |
| 2031Q1E | $3.48B |
| 2031Q2E | $3.68B |
What drives each segment
Americas
Growth pathPower, thermal and services into US and Latin-American data centers — 63% of the basis quarter and the AI-factory engine. What paces it is conversion of already-booked work, not whether the work exists: Q2 missed the company's own midpoint because of supply-chain congestion and multi-phase project execution, and the raise sitting next to that miss is the evidence management gave that the miss was timing. No unit or megawatt series is disclosed, so the projection is sequential growth on the reported geography.
Latest: $2.57B (2031Q2E)
| Period | Value |
|---|---|
| 2024Q1 | $925M |
| 2024Q2 | $1.12B |
| 2024Q3 | $1.20B |
| 2024Q4 | $1.26B |
| 2025Q1 | $1.19B |
| 2025Q2 | $1.60B |
| 2025Q3 | $1.71B |
| 2025Q4 | $1.89B |
| 2026Q1 | $1.81B |
| 2026Q2 | $2.07B |
| 2026Q3E | $2.35B |
| 2026Q4E | $2.58B |
| 2027Q1E | $2.48B |
| 2027Q2E | $2.80B |
| 2027Q3E | $2.90B |
| 2027Q4E | $2.99B |
| 2028Q1E | $2.73B |
| 2028Q2E | $2.96B |
| 2028Q3E | $2.98B |
| 2028Q4E | $3.00B |
| 2029Q1E | $2.69B |
| 2029Q2E | $2.88B |
| 2029Q3E | $2.87B |
| 2029Q4E | $2.87B |
| 2030Q1E | $2.56B |
| 2030Q2E | $2.73B |
| 2030Q3E | $2.72B |
| 2030Q4E | $2.71B |
| 2031Q1E | $2.42B |
| 2031Q2E | $2.57B |
Assumptions & reasoning
- Modelled on sequential growth rather than units or capacity because Vertiv publishes neither a rack/MW shipped figure nor a nameplate. The 16.9% opening rate is the underlying pace before the Q3 factor; together they preserve the prior ~$2.44B Q3 target.
- Americas Q2 was +29.2% reported and +21.1% organic. Acquisition sales were $124.1M of the $468.5M increase — PurgeRite and other 2025/2026 deals sitting in the base, which is why opening growth is applied to $2,070.8M rather than added as a new vertical.
- Adjusted operating margin 27.6% in the basis quarter, 30.1% in Q4 2025. Terminal 30% holds the recent peak rather than walking to the company-level 27% ambition; that ambition is the Framework case. Capex is not disclosed by segment: 5% now and 4% later is the company rate from the Q2 release, applied here because there is nothing else to apply.
- Concentration is the risk no slider expresses. One delayed US hyperscale campus is an Americas miss, which is what Q2 just was. The $15.0B backlog is Q4 2025 and was not updated in Q2, so it is not used as a volume input.
Asia Pacific
Growth pathThe second geography, 22% of the basis quarter, growing fast at half the Americas margin. Q2 jumped from $514M to $720M; that is a step-change, not a run-rate, so opening sequential growth is set well below the trailing quarter. FY2026 organic guide is still low-30s, so the year remains a growth year. No published volume constraint.
Latest: $630M (2031Q2E)
| Period | Value |
|---|---|
| 2024Q1 | $332M |
| 2024Q2 | $409M |
| 2024Q3 | $432M |
| 2024Q4 | $544M |
| 2025Q1 | $447M |
| 2025Q2 | $560M |
| 2025Q3 | $520M |
| 2025Q4 | $492M |
| 2026Q1 | $514M |
| 2026Q2 | $720M |
| 2026Q3E | $746M |
| 2026Q4E | $797M |
| 2027Q1E | $739M |
| 2027Q2E | $805M |
| 2027Q3E | $796M |
| 2027Q4E | $819M |
| 2028Q1E | $739M |
| 2028Q2E | $788M |
| 2028Q3E | $767M |
| 2028Q4E | $780M |
| 2029Q1E | $698M |
| 2029Q2E | $739M |
| 2029Q3E | $716M |
| 2029Q4E | $726M |
| 2030Q1E | $647M |
| 2030Q2E | $684M |
| 2030Q3E | $661M |
| 2030Q4E | $670M |
| 2031Q1E | $597M |
| 2031Q2E | $630M |
Assumptions & reasoning
- A growth driver for the same reason as Americas: no units, no megawatts, a disclosed geography. The 9.5% opening rate is before the lower Q3 seasonal factor and preserves the prior ~$778M target; it does not repeat Q2's 40% jump.
- Margin is structurally lower than the other two geographies — 13.3% in the basis quarter, 9.9-13.2% across 2025. Terminal 16% is a few points of leverage, not a walk to Americas 28%. Closing that gap is a bull-case claim.
- Q2 FX was a $15.8M tailwind and there was no APAC acquisition contribution. Organic +25.7% is the number that actually happened. Taiwan 800 VDC and NVIDIA collaborations are content mix inside this line, not a fourth vertical.
Europe, Middle East & Africa
Growth pathThe recovery geography: 15% of the basis quarter, organic still down 2.4% in Q2, reported up 1.7% only because of FX and a $5.6M acquisition. Q1 at $321M was the trough. Management has pointed at the second half of 2026 for a return to growth since Q3 2025, and the Q3 organic guide is finally mid-teens. Opening sequential growth is that catch-up, not a new European AI-factory cycle.
Latest: $475M (2031Q2E)
| Period | Value |
|---|---|
| 2024Q1 | $382M |
| 2024Q2 | $423M |
| 2024Q3 | $442M |
| 2024Q4 | $546M |
| 2025Q1 | $404M |
| 2025Q2 | $476M |
| 2025Q3 | $444M |
| 2025Q4 | $502M |
| 2026Q1 | $321M |
| 2026Q2 | $484M |
| 2026Q3E | $529M |
| 2026Q4E | $606M |
| 2027Q1E | $566M |
| 2027Q2E | $612M |
| 2027Q3E | $617M |
| 2027Q4E | $664M |
| 2028Q1E | $591M |
| 2028Q2E | $616M |
| 2028Q3E | $605M |
| 2028Q4E | $638M |
| 2029Q1E | $559M |
| 2029Q2E | $576M |
| 2029Q3E | $560M |
| 2029Q4E | $586M |
| 2030Q1E | $511M |
| 2030Q2E | $525M |
| 2030Q3E | $509M |
| 2030Q4E | $532M |
| 2031Q1E | $463M |
| 2031Q2E | $475M |
Assumptions & reasoning
- Q1 2026 $321.4M was the cycle low (organic −29.4%). Q2 $483.6M is a rebound, not a run-rate. The 14.7% underlying opening rate combines with the lower Q3 factor to preserve the prior ~$551M recovery target.
- Adjusted operating margin 25.7% in Q2 against 16.6% in Q1. That is operating leverage on the volume rebound plus the EMEA restructuring announced in Q3 2025. Terminal 26% assumes the mix holds rather than a new step-up.
- ThermoKey closed 12 June 2026 and contributed $5.6M of Q2 acquisition sales. It is not a material line yet and is not split out.
Where each case comes from
Framework case — primary sources
The primary sources this case is built from — filings, calls and posts. Where they are claims by an interested party rather than disclosures, every number in the Framework column is what happens if they are taken at face value.
Vertiv 2026 Investor Conference, 19 May 2026
- May 19, 2026 We now think in terms of a top-line growth in the 5 years on the 20%-22% CAGR. It is above market growth.
- May 19, 2026 All what I have shared with you is really giving us the confidence in delivering on our long-term financial projections with above-market organic growth between 20% and 22%, a margin ambition of 27%+.
- May 19, 2026 Vertiv's 2026 Investor Conference is now available on demand. Access the on-demand replays and presentations.
From cash flow to fair value
| Present value of free cash flow, 20 quarters | $7.92B |
| Terminal-year revenue | $14.95B |
| Terminal-year EBITDA | $3.29B |
| Exit multiple, on revenue | 2.8x |
| Terminal value | $41.86B |
| Discounted at 13.0% a year, terminal value becomes | $22.72B |
| Enterprise value | $30.64B |
| Net cash | $171M |
| Equity value | $30.81B |
| Shares | 0.39B |
| Fair value per share | $78.46 |
| Against the current price of $269.28 | -71% |
4.5x terminal revenue on a mid-20s blended adjusted operating margin — about 18x that margin, which is where a high-quality electrical-equipment franchise belongs once growth has decayed, not where an AI-duration story belongs. At $254.97 the equity trades at about 7.1x FY2026 guided sales and 8.7x trailing sales (EV ~$100B on $14B and $11.5B). Eaton sits nearer 5.3x sales. The exit is a de-rate from today's multiple, and deliberately: the terminal year in this model is a larger, slower business than the one being valued at 7x. Discount rate is 11% rather than 10% for two specific reasons — Q2 just demonstrated conversion risk, and Americas concentration is unquantified below the geography. Move the exit multiple before anything else. Nothing here prices the Q4 2025 $15B backlog as a contracted cash flow; it shows up only as the growth rate the first two projected quarters can sustain.
Read the other way round: at $269.28 the market is paying 12.0x terminal-year revenue, holding every other assumption on this page fixed. That is the number to argue about.
The projected path
| Quarter | Americas | Asia Pacific | Europe, Middle East & Africa | Revenue | YoY | EBITDA | Capex | FCF | R40 | PV of FCF |
|---|---|---|---|---|---|---|---|---|---|---|
| 2026 Q3E | $2.35B | $746M | $529M | $3.62B | +35% | $722M | $177M | $431M | +47 | $418M |
| 2026 Q4E | $2.58B | $797M | $606M | $3.99B | +38% | $804M | $190M | $485M | +51 | $456M |
| 2027 Q1E | $2.48B | $739M | $566M | $3.79B | +43% | $773M | $177M | $470M | +55 | $429M |
| 2027 Q2E | $2.80B | $805M | $612M | $4.21B | +29% | $868M | $194M | $533M | +41 | $472M |
| 2027 Q3E | $2.90B | $796M | $617M | $4.31B | +19% | $899M | $195M | $556M | +32 | $477M |
| 2027 Q4E | $2.99B | $819M | $664M | $4.47B | +12% | $936M | $200M | $582M | +25 | $484M |
| 2028 Q1E | $2.73B | $739M | $591M | $4.06B | +7% | $855M | $179M | $534M | +20 | $431M |
| 2028 Q2E | $2.96B | $788M | $616M | $4.36B | +3% | $924M | $190M | $580M | +17 | $454M |
| 2028 Q3E | $2.98B | $767M | $605M | $4.35B | +1% | $929M | $188M | $585M | +14 | $445M |
| 2028 Q4E | $3.00B | $780M | $638M | $4.41B | -1% | $945M | $189M | $597M | +12 | $440M |
| 2029 Q1E | $2.69B | $698M | $559M | $3.95B | -3% | $849M | $168M | $538M | +11 | $384M |
| 2029 Q2E | $2.88B | $739M | $576M | $4.19B | -4% | $905M | $177M | $576M | +10 | $399M |
| 2029 Q3E | $2.87B | $716M | $560M | $4.15B | -5% | $901M | $174M | $574M | +9 | $386M |
| 2029 Q4E | $2.87B | $726M | $586M | $4.18B | -5% | $909M | $174M | $580M | +9 | $378M |
| 2030 Q1E | $2.56B | $647M | $511M | $3.72B | -6% | $811M | $154M | $519M | +8 | $328M |
| 2030 Q2E | $2.73B | $684M | $525M | $3.94B | -6% | $862M | $163M | $552M | +8 | $339M |
| 2030 Q3E | $2.72B | $661M | $509M | $3.89B | -6% | $854M | $160M | $548M | +8 | $326M |
| 2030 Q4E | $2.71B | $670M | $532M | $3.91B | -6% | $859M | $160M | $552M | +8 | $319M |
| 2031 Q1E | $2.42B | $597M | $463M | $3.48B | -7% | $765M | $142M | $492M | +8 | $276M |
| 2031 Q2E | $2.57B | $630M | $475M | $3.68B | -7% | $811M | $150M | $523M | +7 | $284M |
Every row is projected. A year-over-year change is shown only where the quarter it compares against exists — an em dash means there is no comparable quarter, not a flat year.
Model revisions
Assumptions are marked to reality as each quarter prints. Every change is appended here, with the fair value the model produced at the time, so the model's own history stays visible.
| Date | Changed | Fair value then | Note |
|---|---|---|---|
| 2026-08-27 | verticals.*.seasonality, verticals.*.driver.growthQoQ | $254.65 | Added quarterly seasonality by geography from FY2024-FY2025. Applied 40% of the trend-adjusted historical amplitude to fit management's Q4 guide, then recalibrated opening growth to preserve the existing Q3 regional targets without double-counting growth. |
| 2026-08-25 | all | $261.49 | Initial model. Three geographic verticals copied from the Q2 2026 release, basis the June quarter at $3,274.3M, FY2026 base case calibrated inside the $13.8-14.2B guide. |