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Veralto Corporation (VLTO)
:VLTO
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Veralto Corporation (VLTO) AI Stock Analysis

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VLTO

Veralto Corporation

(NYSE:VLTO)

Rating:81Outperform
Price Target:
$121.00
▲(13.55% Upside)
Veralto Corporation's strong financial performance and positive earnings call sentiment are the major contributors to the high stock score. Technical indicators support the positive outlook, though valuation metrics suggest a moderate valuation. Challenges in specific segments and regions pose some risks but are outweighed by the company's robust financial health and growth prospects.
Positive Factors
Earnings
VLTO posted a significant beat — its 6th out of 6 (since DHR spin), with both Water and PQI segments showing better volumes than expected and operating leverage driving record OI margins.
Financial Performance
Management's growing track record of solid execution, conservative outlook, and defensive portfolio should help this relative Safe Haven, secular growth company's stock push solidly higher in a challenging environment.
Market Performance
VLTO is expected to outperform the market given multiple secular tailwinds in its Water Quality and Product Quality & Innovation segment.
Negative Factors
Tariffs Impact
Tariffs have had an impact particularly on products moving between China and the US, leading to higher costs.
Valuation Concerns
Spending backdrop in PQI combined with current valuation keep us neutral.

Veralto Corporation (VLTO) vs. SPDR S&P 500 ETF (SPY)

Veralto Corporation Business Overview & Revenue Model

Company DescriptionVeralto Corporation provides water analytics, water treatment, marking and coding, and packaging and color solutions worldwide. It operates through two segments, Water Quality (WQ) and Product Quality & Innovation (PQI). The WQ segment offers precision instrumentation and water treatment technologies to measure, analyze, and treat water in residential, commercial, municipal, industrial, research, and natural resource applications under the Hach, Trojan Technologies, ChemTreat and other brands. This segment also provides water solutions, including chemical reagents, services, and digital solutions. The PQI segment offers marking and coding for packaged goods and related consumables; a software solution that provides digital asset management, marketing resource management, and product information management; inline printing solutions for products and packaging with marking and coding systems; design software and imaging systems for the creation of new packaging designs; color management solutions for printed packages and consumer and industrial products; and color standard services for the design industry. This segment sells its products and services through the Videojet, Linx, Esko, X-Rite, and Pantone brands. The company serves industries, such as municipal utilities, food and beverage, pharmaceutical, and industrials. The company was formerly known as DH EAS Holding Corp. and changed its name to Veralto Corporation in February 2023. Veralto Corporation was incorporated in 2022 and is headquartered in Waltham, Massachusetts.
How the Company Makes MoneyVeralto Corporation generates revenue through the sale of its specialized products and services across its diverse sectors. The company earns money by offering cutting-edge technologies and solutions that help other businesses optimize their operations, improve environmental performance, and meet regulatory standards. Key revenue streams include product sales, service contracts, and strategic partnerships that enhance their market reach and technological capabilities. Additionally, the company may engage in research and development initiatives that lead to the creation of proprietary technologies, further strengthening its competitive position and revenue potential.

Veralto Corporation Earnings Call Summary

Earnings Call Date:Jul 28, 2025
(Q2-2025)
|
% Change Since: 3.36%|
Next Earnings Date:Oct 22, 2025
Earnings Call Sentiment Positive
The earnings call reflects a positive sentiment overall, with significant achievements in core sales growth, EPS increases, and strong performances in the Water Quality segment. These highlights outweigh challenges faced by the PQI segment and flat sales in China.
Q2-2025 Updates
Positive Updates
Steady Core Sales Growth
Achieved 4.8% core sales growth for the fourth consecutive quarter, with Water Quality delivering 5% growth and PQI 4.6% growth.
Adjusted Earnings Per Share Increase
Adjusted EPS grew by nearly 13% year-over-year, with a specific Q2 growth of 9.4% to $0.93, exceeding guidance.
Strong Free Cash Flow
Generated $323 million in free cash flow in Q2, an increase of $83 million year-over-year.
Water Quality Segment Performance
The Water Quality segment showed a 6.2% sales increase with a 25.9% adjusted operating profit margin, up 120 basis points year-over-year.
Western Europe Growth in Water Quality
Western Europe Water Quality sales grew 11.4%, supported by improvements in commercial architecture and sales leadership.
Raised Full Year EPS Guidance
Increased full-year adjusted EPS guidance to $3.72 to $3.80 per share from $3.60 to $3.70.
Negative Updates
PQI Segment Margin Pressure
PQI segment experienced margin pressure with flat adjusted operating profit despite 6.8% sales growth, impacted by tariffs and acquisition-related costs.
Challenges in China
Sales in China were flat year-over-year for the first half of 2025, with Water Quality sales specifically lower due to previous year comp effects.
Tariff and Pricing Challenges
Near-term margin pressure at PQI due to timing differences between tariff impacts and pricing adjustments.
Company Guidance
During the second quarter of 2025, Veralto Corporation reported a fourth consecutive quarter of mid-single-digit core sales growth, achieving 4.8% for the quarter. Adjusted earnings per share (EPS) increased by nearly 13% year-over-year, reaching $0.93, and adjusted operating profit margins were maintained at 23.7%. The Water Quality segment delivered 5% core sales growth, while the Product Quality and Innovation (PQI) segment saw a 4.6% increase. Western Europe experienced notable core sales growth in the Water Quality sector, reaching 11.4%, driven by changes in commercial architecture and sales leadership, while North America saw a 5.6% growth across both segments. Veralto raised its full-year adjusted EPS guidance range to $3.72 to $3.80, reflecting steady demand and macroeconomic stability. The company also generated $323 million in free cash flow, enhancing its financial flexibility for future capital allocation opportunities, including acquisitions.

Veralto Corporation Financial Statement Overview

Summary
Veralto Corporation exhibits strong financial performance with consistent revenue growth, healthy profit margins, and effective cash flow management, although there is some reliance on debt.
Income Statement
85
Very Positive
Veralto Corporation demonstrates strong financial performance with consistent revenue growth, as shown by a 5.6% increase in TTM revenue compared to the previous year. The company maintains healthy profit margins: a gross profit margin of 59.7% and a net profit margin of 16.6% for the TTM. The EBIT and EBITDA margins are also robust at 23.4% and 24.6%, respectively. Overall, Veralto shows strong profitability and efficiency in its operations.
Balance Sheet
75
Positive
The balance sheet reflects a stable financial position, with a debt-to-equity ratio of 1.14, indicating moderate leverage. The return on equity is strong at 38.0%, highlighting efficient use of shareholder funds. However, the equity ratio of 34.6% suggests a relatively high reliance on debt financing, posing potential risks if not managed carefully. Nonetheless, the company's equity has strengthened, which is a positive sign for long-term stability.
Cash Flow
80
Positive
Veralto has a solid cash flow profile, with operating cash flow covering net income comfortably, indicated by an operating cash flow to net income ratio of 1.05. The free cash flow to net income ratio is also healthy at 0.98. The free cash flow growth rate is 4.9%, demonstrating effective cash generation and capital expenditure management. Overall, the company's cash flow management supports its operational and strategic needs effectively.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue5.19B5.02B4.88B4.70B4.35B
Gross Profit3.10B2.90B2.77B2.71B2.51B
EBITDA1.28B1.21B1.21B1.15B1.06B
Net Income833.00M839.00M845.00M861.00M724.00M
Balance Sheet
Total Assets6.41B5.69B4.83B4.84B0.00
Cash, Cash Equivalents and Short-Term Investments1.10B762.00M-123.00M-135.00M0.00
Total Debt2.60B2.78B123.00M135.00M0.00
Total Liabilities4.36B4.30B1.58B1.64B0.00
Stockholders Equity2.04B1.38B3.23B3.20B0.00
Cash Flow
Free Cash Flow820.00M909.00M836.00M842.00M965.00M
Operating Cash Flow875.00M963.00M870.00M896.00M1.00B
Investing Cash Flow-434.00M-55.00M-89.00M-97.00M-157.00M
Financing Cash Flow-65.00M-135.00M-781.00M-799.00M-844.00M

Veralto Corporation Technical Analysis

Technical Analysis Sentiment
Positive
Last Price106.56
Price Trends
50DMA
101.37
Positive
100DMA
98.25
Positive
200DMA
100.51
Positive
Market Momentum
MACD
1.38
Negative
RSI
65.47
Neutral
STOCH
82.22
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VLTO, the sentiment is Positive. The current price of 106.56 is above the 20-day moving average (MA) of 103.37, above the 50-day MA of 101.37, and above the 200-day MA of 100.51, indicating a bullish trend. The MACD of 1.38 indicates Negative momentum. The RSI at 65.47 is Neutral, neither overbought nor oversold. The STOCH value of 82.22 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for VLTO.

Veralto Corporation Risk Analysis

Veralto Corporation disclosed 35 risk factors in its most recent earnings report. Veralto Corporation reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Veralto Corporation Peers Comparison

Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
81
Outperform
$26.44B29.8441.35%0.40%5.61%12.26%
78
Outperform
$7.64B34.9418.77%0.41%9.09%9.64%
76
Outperform
$742.82M37.3811.95%10.93%6.99%
75
Outperform
$3.15B17.2095.48%0.53%1.43%12.88%
70
Outperform
$7.46B44.0210.81%0.78%4.74%30.64%
62
Neutral
C$7.33B1.8110.22%2.39%10.45%-5.46%
38
Underperform
$2.38B-67.71%-180.10%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
VLTO
Veralto Corporation
106.56
-0.24
-0.22%
ERII
Energy Recovery
13.63
-2.97
-17.89%
FSS
Federal Signal
125.62
32.02
34.21%
ZWS
Zurn Water Solutions
43.98
13.96
46.50%
PCT
PureCycle Technologies
13.24
6.93
109.83%
ATMU
Atmus Filtration Technologies, Inc.
38.07
5.65
17.43%

Veralto Corporation Corporate Events

Executive/Board ChangesShareholder MeetingsBusiness Operations and Strategy
Veralto Corporation Updates Governance Structure
Neutral
May 15, 2025

Veralto Corporation‘s Board of Directors approved significant amendments to its corporate governance structure, including the transition to annual director elections and the removal of supermajority voting requirements, contingent on shareholder approval at the 2025 annual meeting. These changes, effective May 15, 2025, are designed to enhance shareholder influence and streamline decision-making processes, reflecting a strategic shift in the company’s governance model.

The most recent analyst rating on (VLTO) stock is a Buy with a $125.00 price target. To see the full list of analyst forecasts on Veralto Corporation stock, see the VLTO Stock Forecast page.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jul 30, 2025