Vertiv (VRT) stock has gained 18.4% in the month since its Q2 2026 earnings report, closing most recently at $263.81. That move easily outpaced the S&P 500 over the same period.
The company posted Q2 adjusted earnings of $1.52 per share, a 60% jump year over year, beating the Zacks Consensus Estimate by 6.29%. Net sales came in at $3.27 billion, up 24.1% from the prior year, though that figure missed the consensus estimate by 3.41%.
Organic sales grew 18%, with acquisitions adding 5% and foreign exchange contributing 1% to the top line.
Americas net sales led the way, rising 29% year over year to $2.07 billion, with 21% organic growth. Asia Pacific also posted a 29% gain to $720 million, driven by 26% organic growth.
EMEA was the one soft spot, with net sales up just 2% and organic sales down 2%. Management said it expects EMEA to return to organic growth in the second half of 2026.
Service revenues were a standout, climbing 32.9% year over year to $627.6 million, outpacing the 22.2% growth in product revenues.
Adjusted operating profit surged 51% to $738 million, beating the midpoint of guidance by $28 million. Adjusted operating margin expanded 410 basis points to 22.6%, coming in 140 basis points ahead of guidance.
Vertiv’s cash position strengthened considerably. Adjusted free cash flow jumped 234% to $925 million. Net cash from operations hit $1.10 billion, compared with $322.9 million a year earlier.
As of June 30, the company held $2.81 billion in cash and $300 million in short-term investments, against $2.94 billion in long-term debt. Net leverage was negative 0.1 times, meaning the company is effectively in a net cash position.
Capital expenditure is expected to reach about 4% of 2026 sales. Vertiv is expanding manufacturing capacity and investing in advanced thermal systems and power infrastructure for AI data centers, including both AC and 800-volt DC designs.
For Q3 2026, Vertiv guided for net sales of $3.65 to $3.85 billion and adjusted EPS of $1.77 to $1.83.
Full-year 2026 guidance was raised, with net sales now forecast at $13.8 to $14.2 billion, up $250 million at the midpoint. Adjusted EPS guidance moved to $6.65 to $6.75, and adjusted free cash flow guidance was lifted to $2.4 to $2.6 billion.
Wall Street’s mean price target across 24 analysts stands at $338.79, implying 28.4% upside from the recent close. The range runs from a low of $245.00 to a high of $412.00. The Zacks Consensus Estimate for full-year EPS has risen 5.1% over the past month, with seven upward revisions and no cuts. VRT currently holds a Zacks Rank of 2 (Buy).
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