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Venture Global (VG) shares have been on the move lately, catching the eye of investors curious about what is driving the change. The stock has dropped about 35% over the past month, drawing attention to recent shifts in sentiment.

See our latest analysis for Venture Global.

Looking beyond the past month’s 34.7% slide in share price, Venture Global’s momentum has been fading for most of 2024, with its year-to-date share price return down over 60%. While the latest moves may reflect shifting risk perceptions, it is part of a longer pattern where any short-term rallies have not built into sustained gains.

If you’re looking to widen your investing lens as market sentiment shifts, this could be the perfect moment to discover fast growing stocks with high insider ownership.

With shares trailing well below their analyst price targets and annual revenue still showing solid growth, the question now is whether Venture Global is trading at a steep discount or if future prospects are already reflected in the market.

Venture Global is trading at a price-to-earnings (P/E) ratio of 17.9x. This places it at a premium compared to the industry average and its own fair ratio estimate. With a last close price of $9.49, investors are currently paying more for each dollar of earnings than is typical for similar U.S. oil and gas companies.

The price-to-earnings ratio captures how much the market is willing to pay for a company’s profits. It is a widely used tool for gauging whether a stock is trading at a reasonable level given its current and future earnings. For Venture Global, this elevated multiple suggests high expectations for profit growth, despite modest near-term earnings estimates and industry headwinds.

Compared to the U.S. oil and gas industry average P/E of 12.8x, Venture Global appears significantly more expensive. Its ratio also exceeds the estimated fair price-to-earnings level of 14.3x. This valuation gap signals the market may be overpricing future prospects, especially given the company’s current growth and profit profile.

Explore the SWS fair ratio for Venture Global

Result: Price-to-Earnings of 17.9x (OVERVALUED)

However, rising revenue growth could falter if industry conditions worsen or if profit improvements do not keep pace with expectations.

Find out about the key risks to this Venture Global narrative.

While the price-to-earnings ratio presents Venture Global as expensive compared to its peers, the SWS DCF model offers a different perspective. According to our DCF model, shares are trading approximately 31.6% below their estimated fair value of $13.88. Could the market be missing long-term fundamentals?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Venture Global for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match – so you never miss a potential opportunity.

If you’d rather form your own view or want to dig deeper into Venture Global’s numbers, you can build your own data-driven story in just a few minutes. Use our tools to do it your way with Do it your way.

A great starting point for your Venture Global research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include VG.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com

Vertiv Holdings Co (NYSE:VRT) posted third-quarter earnings that outpaced expectations, prompting management to raise full-year guidance for both sales and earnings. The results highlight strong demand in digital infrastructure and AI-supported data centers.

See our latest analysis for Vertiv Holdings Co.

Vertiv’s momentum has been nothing short of remarkable. After topping expectations and lifting its forecast, shares have catapulted with a 31% gain in the past month alone, driving the 1-year total shareholder return to over 66%. With big data center contracts and fresh executive moves making headlines, investor enthusiasm continues to build as the company cements its leadership in AI-powered infrastructure.

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Yet with shares already soaring and full-year guidance now higher, the big question for investors becomes this: Is Vertiv’s red-hot rally still leaving room for upside, or is the market already pricing in the next leg of growth?

Vertiv’s last close of $186.06 stands noticeably above the narrative’s fair value estimate of $173.11, revealing a premium in current market enthusiasm versus calculated future prospects.

Accelerating global demand for high-density, AI-driven data centers is driving robust growth in Vertiv’s sales pipeline and backlog. This is evidenced by recurring record order levels, backlog growth, and management’s raised organic sales growth guidance, which supports potentially higher future revenue.

Read the complete narrative.

Is this hot streak built to last? The most followed valuation hinges on a future profit windfall and a market-beating sales climb. But what exactly are the bold forecasts behind the scenes? Only the full narrative reveals the winning formula powering this price target.

Result: Fair Value of $173.11 (OVERVALUED)

Have a read of the narrative in full and understand what’s behind the forecasts.

However, persistent supply chain disruptions or a slowdown in AI data center build-outs could quickly test the strength of Vertiv’s growth outlook.

Find out about the key risks to this Vertiv Holdings Co narrative.

If you want to dive deeper or put your own spin on the story, you can build your own narrative from scratch in just a few minutes. Do it your way

A great starting point for your Vertiv Holdings Co research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.

Don’t miss your chance to gain an edge. Simply Wall Street highlights investment opportunities others overlook so you can position your portfolio ahead of the curve.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include VRT.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com