Electrical Systems Stocks Q4 Teardown: Vertiv (NYSE:VRT) Vs The Rest
As the Q4 earnings season wraps, let's dig into this quarter's best and worst performers in the electrical systems industry, including Vertiv (NYSE:VRT) and its peers.
Like many equipment and component manufacturers, electrical systems companies are buoyed by secular trends such as connectivity and industrial automation. More specific pockets of strong demand include Internet of Things (IoT) connectivity and the 5G telecom upgrade cycle, which can benefit companies whose cables and conduits fit those needs. But like the broader industrials sector, these companies are also at the whim of economic cycles. Interest rates, for example, can greatly impact projects that drive demand for these products.
The 13 electrical systems stocks we track reported a slower Q4. As a group, revenues were in line with analysts' consensus estimates while next quarter's revenue guidance was 6% below.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 23.9% since the latest earnings results.
Formerly part of Emerson Electric, Vertiv (NYSE:VRT) manufactures and services infrastructure technology products for data centers and communication networks.
Vertiv reported revenues of $2.35 billion, up 25.8% year on year. This print exceeded analysts' expectations by 8.8%. Overall, it was a very strong quarter for the company with an impressive beat of analysts' organic revenue and EBITDA estimates.
'Data centers are crucial for meeting the world's digital demands,' said Giordano Albertazzi, Vertiv's Chief Executive Officer.
The stock is down 42.8% since reporting and currently trades at $70.50.
Read why we think that Vertiv is one of the best electrical systems stocks, our full report is free.
Enhancing commercial environments, LSI (NASDAQ:LYTS) provides lighting and display solutions for businesses and retailers.
LSI reported revenues of $147.7 million, up 35.5% year on year, outperforming analysts' expectations by 14.3%. The business had an incredible quarter with an impressive beat of analysts' EPS estimates and a solid beat of analysts' EBITDA estimates.
LSI delivered the biggest analyst estimates beat and fastest revenue growth among its peers. The stock is down 24.2% since reporting. It currently trades at $15.01.
Is now the time to buy LSI? Access our full analysis of the earnings results here, it's free.
Founded in 1946, Methode Electronics (NYSE:MEI) is a global supplier of custom-engineered solutions for Original Equipment Manufacturers (OEMs).
Methode Electronics reported revenues of $239.9 million, down 7.6% year on year, falling short of analysts' expectations by 8.9%. It was a disappointing quarter as it posted revenue guidance for next quarter missing analysts' expectations.
Methode Electronics delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 48.6% since the results and currently trades at $5.05.
Read our full analysis of Methode Electronics's results here.
Credited with introducing the first automatic washing machine, Whirlpool (NYSE:WHR) is a manufacturer of a variety of home appliances.
Whirlpool reported revenues of $4.14 billion, down 18.7% year on year. This print lagged analysts' expectations by 1.5%. Overall, it was a disappointing quarter as it also produced full-year EPS guidance missing analysts' expectations.
Whirlpool had the slowest revenue growth among its peers. The stock is down 39.3% since reporting and currently trades at $78.55.
Read our full, actionable report on Whirlpool here, it's free.
A respected player in the electrical segment, Hubbell (NYSE:HUBB) manufactures electronic products for the construction, industrial, utility, and telecommunications markets.
Hubbell reported revenues of $1.33 billion, flat year on year. This number missed analysts' expectations by 4.8%. It was a slower quarter as it also recorded a miss of analysts' organic revenue and EBITDA estimates.
The stock is down 16% since reporting and currently trades at $343.10.
Read our full, actionable report on Hubbell here, it's free.
As a result of the Fed's rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed's 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump's victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.
Want to invest in winners with rock-solid fundamentals? Check out our Hidden Gem Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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