Veralto CorporationVLTONYSE
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Executive Summary
Latest Data: Dec 2025Industrials•Industrial - Pollution & Treatment Controls
$22.9BLarge Cap
A mid-sized company, with solid profitability valued in line with the market.
Key Investment Themes
Mature business (6% growth)
Solid 17% profitability
Strong cash generation (18% FCF margin)
Business Narrative
Veralto 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.
IndustrialsIndustrial - Pollution & Treatment Controls
Mature & Stable
high confidence
Revenue Mix
Single segment business
Bull Case
- +Solid profitability with room for margin expansion
- +Strong cash generation funds reinvestment and shareholder returns
Company at a Glance
Business Performance
Key Highlights
Positive Signals
- Healthy profit margins demonstrating pricing power
- Free cash flow growing strongly, indicating quality earnings
- Excellent return on equity above 20%
Financial Health
Liquidity
Watch
Current Ratio1.67
1.0-2.0 = Adequate
Cash & Equivalents$2.0B
Leverage
Strong
Debt / Equity0.86
<1.0 = Low leverage
Interest Coverage13.30x
≥5x = Comfortable
Efficiency
Strong
Return on Equity30.3%
≥15% = Excellent
Return on Capital16.1%
≥15% = Excellent
Valuation Assessment
Market Cap
$22.9B
Large Cap
P/E (TTM)
24.4x
In-line
vs 5Y avg: 25.5x (-4%)
P/S (TTM)
4.2x
In-line
vs 5Y avg: 4.3x (-4%)
EV/EBITDA
17.5x
In-line
vs 5Y avg: 18.5x
(-5%)
(-5%)
P/E Historical Range (5Y)
Min: 23.0xAvg: 25.5xNow: 24.4xMax: 30.2x
P/S Historical Range (5Y)
Min: 4.0xAvg: 4.3xNow: 4.2xMax: 4.9x
EV/EBITDA Historical Range (5Y)
Min: 16.6xAvg: 18.5xNow: 17.5xMax: 21.0x
Valuation Corridor
FAIR
PEG Ratio
1.96
P/E 24.4x / Growth 12.5% = Reasonable
FCF Yield
4.4%
vs Cost of Capital ~8.0% = Moderate
P/E Corridor (5Y)24.4x
23.0xFair: 23.0x-28.4x30.2x
P/S Corridor (5Y)4.2x
4.0xFair: 4.0x-4.7x4.9x
EV/EBITDA Corridor (5Y)17.5x
16.6xFair: 16.8x-20.1x21.0x
Detailed Financials
Comprehensive financial statement data for deep analysis
| Metric | Dec 21 | Dec 22 | Dec 23 | Dec 24 | Dec 25 |
|---|---|---|---|---|---|
| Return on Equity | - | - | - | - | - |
| Return on Invested Capital | - | - | - | - | - |
| Gross Margin | 57.7% | 56.9%↓1.5% | 57.8%↑1.6% | 59.8%↑3.5% | 59.9%↑0.3% |
| Operating Margin | 22.1% | 22.8%↑3.1% | 22.7%↓0.6% | 23.3%↑2.5% | 23.2%↓0.2% |
| Net Margin | 18.3% | 17.4%↓5.3% | 16.7%↓3.7% | 16.0%↓4.0% | 17.1%↑6.5% |
| Earnings Yield | - | - | - | - | - |
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