Figured I would take a look at some AI adjacent names that have declined 40%+.
Vertiv would be an interesting name to own, but if I taper growth to reflect normalizing demand in the outer years, on the back of relatively stable OCF margins, it still looks insanely expensive.
Take a look at my forecasts below and let me know what you think. Am I too bearish, or did the market bid these companies up that much prior to the collapse?
||FY2026|FY2027|FY2028|FY2029|FY2030|FY2031|FY2032|
|:-|:-|:-|:-|:-|:-|:-|:-|
|Revenue|$12,480|$14,727|$16,789|$18,300|$19,855|$21,444|$23,052|
|Revenue Growth %|22%|18%|14%|9%|8.50%|8%|7.50%|
|Diluted Shares (M)|395|399|402|407|411|415|419|
|OCF Margin %|21%|21.30%|21.50%|21.50%|21.30%|21%|20.50%|
|CapEx (% of OCF)|10%|10%|9.50%|9%|8%|7%|6.50%|
|Free Cash Flow|$2,359|$2,823|$3,267|$3,581|$3,891|$4,188|$4,419|
|Intrinsic Value / Share|$140|$145|$152|$156|$162|$168|$173|