Verdict: Justified
Key finding: Organic orders more than doubled (>100% YoY). Sales grew +61% to $4.31B, adjusted EPS was $2.21 vs $1.82 expected, and the full-year guide went up $650M to $14.45-14.85B, with EPS at $7.10-7.20 vs $6.73 consensus. The stock gapped +16.5% on 19.5M shares (~3.6x average). The chip selloff has taken back part of it: 10/30 close $232.50, -8.7% from the $254.73 post-report high, and the 10/30 low of $226.86 dipped under the $228.81 gap-day low.
Scorecard
| Ticker | Rev last Q ($M) | Rev YoY last Q | Rev YoY prior Q | Gross margin (last Q, trend) | Op margin | EPS last Q vs yr ago | P/S | Mkt cap | 1-mo price % |
|---|---|---|---|---|---|---|---|---|---|
| VRT | 4,312.8 | +61.2% | +24.1% | 38.1% (from 37.8%) | 22.8% | 1.95 vs 1.02 | 6.92 | $90.8B | -3.7% |
| ETN | 8,531.0 | +21.4% | +16.8% | 33.5% (from 37.0%) | 16.3% | 2.11 vs 2.51 | 4.80 | $144.1B | -13.9% |
| NVT | 1,514.9 | +43.7% | +52.8% | 35.8% (from 37.5%) | 18.6% | 1.23 vs 0.73 | 3.92 | $20.7B | -21.4% |
| MOD | 874.1 | +28.0% | +47.5% | 20.8% (from 24.2%) | 8.6% | 1.37 vs 0.95 | 2.07 | $7.0B | -24.7% |
EPS = GAAP from our data. ETN / MOD rows are their June quarter.
VRT is the growth and margin leader of the data-center power and cooling group: revenue +61.2% (accelerating from +24.1%) vs NVT +43.7%, MOD +28.0% and ETN +21.4%, plus the best op margin (22.8%).
- GAAP EPS nearly doubled (1.95 vs 1.02).
- It is also the most expensive on sales (6.9x vs 2.1-4.8x).
Move
- 52-week high $379.94 (5/14). It fell to a $187.24 low in the 60 sessions before the report; the 10/30 close is -38.8% from the high.
- 10/27: close $208.56, high $210.92.
- 10/28 (report, before the open): opened $243.00 (gap +16.5%), low $228.81, high $245.31, close $242.94 (+16.5%) on 19.5M shares.
- 10/29: high $254.73, close $245.92.
- 10/30: low $226.86, close $232.50 (-5.5%). SMH fell 7.0% that day.
- Unfilled gap: $210.92-$228.81.
- Below the 50-day ($242.61) and 200-day ($270.53); above the 20-day ($225.09).
Catalyst
Q3 2026, released before the open on 10/28 (company 8-K):
- Net sales $4,313M (+61%); diluted EPS +91%; adjusted EPS $2.21 vs $1.82 consensus.
- Organic orders >100% YoY. Management said it does not disclose orders or backlog quarterly; year-end backlog comes in the annual report (~Feb).
- FY26 guide raised on every metric: sales $14.45-14.85B (+$650M); adjusted EPS $7.10-7.20 vs $6.73 consensus.
- Analysts raised price targets after the print (TipRanks).
Sector
- Power and cooling peers fell in October: ETN -13.9%, NVT -21.4%, MOD -24.7% (9/30 to 10/30). VRT held at -3.7% because of the report.
- Chip selloff: SMH -16.4% and SOXX -19.1% since 10/7, including -7.0% / -8.2% on 10/30 alone. The cause of the 10/30 drop was not found. Earlier October drops were reported as doubts over AI spending plus rates (cryptobriefing, Trustnet).
Risks
- Trend: still -38.8% from the May high and below the 50- and 200-day.
- Sector beta: VRT trades with the AI-capex group; another leg down in semis would pull it regardless of orders.
- Valuation: ~32x the FY26 EPS guide midpoint at $232.50 (my calculation: 232.50 / 7.15).
- No orders number: the >100% is a spoken comment; no backlog figure until ~Feb.
- Insider sales: 8 sales on 9/1 ($3.88M).
- Next binary: Q4 report, about Feb 2027 (inference).
Judgement
Justified.
- Orders doubling is the strongest forward signal in this group, and the raise is large: +$650M on sales and an EPS guide above consensus.
- The gap held for two sessions before the 10/30 sector crash pulled it back to the gap-day low.
The business news points up. The open question is the AI-hardware tape, not Vertiv.