2Y annualized return is
excellent
at 16.9% per year
VLTO has met or exceeded earnings expectations in
all
recent quarters (6/6)
Strong Return on Equity
Strong Profit Margins
Good Liquidity Position
🏆 Strong Financial Performance
🔧 Effective Capital Allocation
📈 Innovation and R&D Focus
🌍 Positive Market Trends
🚀 Strong Innovation Pipeline
High Valuation Ratios
High Debt Levels
⚠️ Margin Pressure from Acquisitions
📉 Currency Headwinds
📉 China Market Challenges
Veralto Corporation demonstrates a solid business model with strong financial performance and disciplined capital allocation. The company is well-positioned for future growth, driven by innovation and favorable market trends, though it faces challenges from currency fluctuations and regional market stability.
Analysis Date: February 5, 2025
Last Updated: March 12, 2025
Past performance does not guarantee future results. The data presented is indicative and may not be updated in real-time.
Veralto Corporation is a company that helps provide clean water to people and businesses. They focus on treating water to make it safe for use and help put it back into the environment. Additionally, they offer tools and services that help companies in various industries, like food and drinks, keep their products looking good and safe. Veralto was created in 2022 and is based in Waltham, Massachusetts.
Core Products
Business Type
Business to Business
Competitive Advantages
Key Business Risks
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Benjamin Graham's value investing approach focuses on finding stocks with a significant margin of safety between their intrinsic value and market price.
Intrinsic Value
Estimated fair value based on Graham's formula
$41.74
Current Market Price: $88.32
IV/P Ratio: 0.47x (>1.0 indicates undervalued)
Margin of Safety
Gap between intrinsic value and market price
-112.00000000000001%
Graham recommended a minimum of 20-30% margin of safety
Higher values indicate a greater potential discount to fair value
Graham Criteria Checklist
Benjamin Graham's value investing checklist for VLTO
Positive earnings (5+ years)
Dividend history (5+ years)
P/E ratio ≤ 20 (26.60)
P/B ratio ≤ 1.5 (10.83)
Current ratio ≥ 2.0 (1.92x)
Long-term debt < Net current assets (2.28x)
Margin of safety (-112.00000000000001%)
VLTO does not meet all Graham criteria
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Profitability metrics measure a company's ability to generate earnings relative to its revenue, operating costs, and other relevant metrics. Higher values generally indicate better performance.
Return on Equity (ROE)
Measures how efficiently a company uses its equity to generate profits
48.96%
Higher values indicate better returns for shareholders
TTM (as of 2025-04-30)
Gross Profit Margin
Percentage of revenue retained after accounting for cost of goods sold
59.81%
Higher values indicate better efficiency in production
TTM (as of 2025-04-30)
Net Profit Margin
Percentage of revenue retained after accounting for all expenses
16.04%
Higher values indicate better overall profitability
TTM (as of 2025-04-30)
The gross profit margin of 59.81% and net profit margin of 16.04% illustrate the company's ability to maintain substantial profitability at various levels, indicating efficient operational management.
Financial health metrics assess a company's ability to meet its financial obligations and its overall financial stability.
Debt to Equity Ratio
Total debt divided by total equity
1.27x
Lower values indicate less financial leverage and risk
Less than 1.0 is conservative, 1.0-2.0 is moderate, >2.0 indicates high risk
Q4 2024
Current Ratio
Current assets divided by current liabilities
1.92x
Higher values indicate better short-term liquidity
Less than 1.0 is concerning, 1.0-2.0 is adequate, greater than 2.0 is good
Q4 2024
Current ratio of 1.92 and quick ratio of 1.69 indicate that the company has a strong liquidity position, easily able to meet short-term obligations.
A debt-to-equity ratio of 1.27 suggests that the company is using a significant amount of leverage, which could pose risks if not managed properly.
Meeting Expectations
Higher values indicate better execution and credibility
Recent Results
EPS
Veralto Corporation delivered core sales growth, adjusted operating profit margin expansion, and adjusted earnings per share growth above initial guidance, showcasing the durability of its business model. The company reported a total sales growth of 3.4% year-over-year, reaching an all-time high of just under $5.2 billion.
The disciplined approach to capital allocation allowed Veralto to improve its portfolio through strategic acquisitions and divestitures, exemplified by the acquisition of TraceGains and the divestiture of Advanced Vision Technology, enhancing their core growth and margins.
In 2024, Veralto increased its R&D investment to about 5% of sales, leading to several new product launches, such as the 7920 UV Laser Marking System, which has garnered strong customer demand.
The acquisition of TraceGains initially diluted margins in the PQI segment, suggesting that while growth is expected, it comes with short-term margin impacts.
Currency fluctuations presented a 50 basis points headwind to sales, impacting the overall financial performance and profitability.
Veralto is positioned to benefit from strengthening demand in key markets, particularly in industrial water treatment and consumer packaged goods, with a projected low to mid-single-digit core sales growth for 2025.
The company continues to focus on innovation, with a robust pipeline of new products and technologies expected to drive future growth, especially in Water Quality and PQI segments.
Sales in China are expected to remain stable at low levels, with no growth anticipated for 2025, potentially limiting overall growth in that region.