Analysis Brief
Last updated: Sep 04, 2025 13:57:11
Introduction
Veralto Corporation (VLTO) is an industrial company focused on pollution control and treatment technologies, serving a global customer base across multiple sectors.
Quarterly Reports (last four quarters)
| Metric | Q2 2025 | Q1 2025 | Q4 2024 | Q3 2024 |
|---|---|---|---|---|
| Revenue (USD) | 1,371,000,000 | 1,332,000,000 | 1,345,000,000 | 1,314,000,000 |
| Gross Profit (USD) | 822,000,000 | 805,000,000 | 801,000,000 | 783,000,000 |
| Operating Income (USD) | 313,000,000 | 322,000,000 | 308,000,000 | 308,000,000 |
| Net Income (USD) | 222,000,000 | 225,000,000 | 227,000,000 | 219,000,000 |
| EPS (USD) | 0.89 | 0.91 | 0.92 | 0.89 |
| Cash & Equivalents (USD) | 1,559,000,000 | 1,239,000,000 | 1,101,000,000 | 1,267,000,000 |
| Total Debt (USD) | 2,672,000,000 | 2,630,000,000 | 2,767,000,000 | 2,639,000,000 |
Trends & valuation impact
- Revenue has risen modestly each quarter, indicating steady top-line growth.
- Gross profit margins remain near 60 %, supporting pricing power and cost control.
- Operating income fluctuates but stays above 20 % of revenue, reflecting efficient operations.
- Net income and EPS are stable, reinforcing earnings consistency for valuation multiples.
- Cash balances have increased, improving liquidity and reducing reliance on external financing.
- Debt levels are high but have been trimmed slightly, which may lower financial risk over time.
Fundamental Ratios
| Ratio | Value |
|---|---|
| P/E (TTM) | 29.54 |
| Current Ratio (TTM) | 2.32 |
| Debt/Equity Ratio (TTM) | 1.01 |
| Return on Equity (TTM) | 39.92 % |
| Return on Assets (TTM) | 12.45 % |
| Dividend Yield (TTM) | 0.40 % |
| Interest Coverage (TTM) | 23.17 |
Ratio insights
- The P/E of ~30 suggests the market expects solid future growth, but it is above the sector average, implying a premium valuation.
- A current ratio above 2 indicates strong short-term liquidity.
- Debt-to-equity near 1 reflects a balanced capital structure, though leverage remains notable.
- High ROE and ROA demonstrate effective use of capital and assets to generate earnings.
- The modest dividend yield adds a small income component without heavily draining cash.
- Strong interest coverage (>20×) signals ample ability to meet debt obligations, reducing credit risk.
Conclusion
Veralto has shown consistent revenue and profit growth across the latest quarters, with stable margins and improving cash positions. Its liquidity metrics are robust, and leverage is being managed down modestly, supporting a solid balance sheet. Valuation ratios indicate the market prices the company at a growth premium, justified by strong ROE and earnings stability. Investors should monitor the company’s ability to sustain top-line growth and manage debt, while the modest dividend offers a modest income boost. Overall, Veralto appears financially sound with a favorable outlook, though the elevated P/E warrants careful assessment of future growth prospects.