Vertiv (VRT) stock is down 6.2% in a day. Already own the stock or planning to buy? You might want to re-consider based on the valuation as the stock still looks expensive. Consider the following data:
- Size: A $54 Bil company with $9.1 Bil in revenue currently trading at $142.61.
- Fundamentals: Last 12 month revenue growth of 26.3% and operating margin of 17.4%.
- Liquidity: Has Debt to Equity ratio of 0.06 and Cash to Assets ratio of 0.17
- Valuation: Currently trading at P/E multiple of 67.0 and P/EBIT multiple of 41.4
- Has returned (median) 110% within a year following sharp dips since 2010. See VRT Dip Buy Analysis.
While we like to buy dips if the fundamentals check out – for VRT, see Buy or Sell VRT Stock – we are wary of falling knives. Specifically, it is worth trying to answer if things get really bad, and VRT drops another 20-30% to $99.83 levels, will we be able to hold on to the stock? What is the worst case scenario? We call it downturn resilience.
Below is a deep dive into Vertiv (VRT) downturn resilience – specifically, its performance vs the market during past crises? Turns out, the stock saw an impact slightly better than the S&P 500 index during various economic downturns. We assess this based on both (a) how much the stock fell and, (b) how quickly it recovered.
Below are the details, but before that, as a quick background: VRT provides critical digital infrastructure technologies, lifecycle management, predictive analytics, and professional services for data centers, communication networks, and industrial environments.
2022 Inflation Shock
- VRT stock fell 71.2% from a high of $28.59 on 2 September 2021 to $8.22 on 30 June 2022 vs. a peak-to-trough decline of 25.4% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 2 August 2023
- Since then, the stock increased to a high of $153.49 on 23 January 2025 , and currently trades at $142.61
| VRT | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -71.2% | -25.4% |
| Time to Full Recovery | 398 days | 464 days |
2020 Covid Pandemic
- VRT stock fell 58.6% from a high of $13.46 on 19 February 2020 to $5.57 on 18 March 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 2 June 2020
| VRT | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -58.6% | -33.9% |
| Time to Full Recovery | 76 days | 148 days |
2018 Correction
- VRT stock fell 3.4% from a high of $10.06 on 27 November 2018 to $9.72 on 14 December 2018 vs. a peak-to-trough decline of 19.8% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 15 April 2019
| VRT | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -3.4% | -19.8% |
| Time to Full Recovery | 122 days | 120 days |
Worried that VRT could fall much more? You could take a look at the Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.
Disclaimer: The story “VRT Fell 6.2% In A Day. What To Do Now?” first appeared on Trefis and is syndicated via Digpu & NewsTex.