Vertiv Holdings Analysis: Earnings Momentum and Options Strategy

The great Jim Cramer is often found of saying, "It doesn't matter where a stock has been, only where it's going." It's fantastic advice, and worth remembering when looking at shares of Vertiv Holdings .

Vertiv, headquartered in Westerville, Ohio, is an electrical power equipment manufacturer, and many of the DC power systems, heat rejection and data center cooling solutions and other equipment it makes are critical in data centers. Given the enormous capex in that area it is unsurprising that Vertiv CEO Giordano Albertazzi said on the Q2 '26 earnings call, where they raised guidance and reported a 24% growth in net sales and a 410 bps expansion in adjusted operating margins, "We raised our full-year 26 guidance across all key metrics; the momentum is strong, it is broad-based, and it is accelerating." adding "I am more confident in our trajectory today than I have ever been."

However, the stock did experience a bit of a sell-off when they reported, not because of the outlook, but due to concerns about supply-chain related delays which pushed some sales into the second half. The stock has now recovered and sits just below the critical 150 day-moving average. A little perspective here. Vertiv shares are up a Micron-like 1043% over the past five years, so investors might be forgiven for profit taking.

The company will next report earnings on October 22nd. Assuming there are no additional delays and the company remains on track to meet (or exceed) the higher full year guidance of the last reported quarter, it could regain more of the ground it gave up since the mid-May highs.

My recommendation is a longer-dated call spread risk reversal, that captures the October earnings, specifically the January 240/290/340 priced very close to "even" i.e. no net debit or credit in terms of options premium. In the worst case one purchases the stock at $240, more than 14% lower than where the stock is currently trading and not far from the lows post Q4 25 earnings reported in February. The max gain is $50, more than 20% of the $240 short put strike.

Under normal circumstances where I am net short options I prefer 15-60 days. This trade is considerably longer-dated than that. The reason is that it provides a bit more flexibility regarding the timing of realizing gains or losses. If the trade works out, but one does not wish to realize the gain in 2026, the trade can be held past year end. These are not long-term options, the trade will still result in either short term capital gains or losses, but if timing those gains or losses in 2026 or 2027 matters, an early 2027 expiration offers a bit more flexibility.