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What this page is: Delvantic's full research page for Veralto Corporation (VLTO) — AI-driven forensic equity research: mechanical valuation models (DCF, EPV, anchored-PE, scenario) plus three independent AI lenses (Quality / Value / Sentiment). Everything below is rendered server-side; you are not missing content that requires JavaScript. All scores are predictions and research opinions, not financial advice.
Our current read (analysis of 2026-09-07): Designation Watch · Gem Score -6 (−100…+100 Quality+Value blend) · Quality 73 · Value -58 · Sentiment 5 (timing only, not weighted) · Composite fair value $70.99 vs $97.21 at analysis
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profile-header/price-overview— company profile, live quote, market capextended-analysis— the core: three AI lens reads with findings, scores, and the analyst memofuture-predictions— our forward price-band predictionsmarket-narrative/ai-findings/gpt-critique— narrative context, cross-model findings, and an adversarial critique of our own analysis (near the end of the document)- Members-only sections (render as login gates for anonymous readers):
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Veralto Corporation
VLTO NYSEVeralto Corporation is an industrial technology company focused on water quality, water treatment, product marking and coding, and packaging and color solutions. Through its Water Quality and Product Quality & Innovation segments, Veralto serves customers in municipal utilities, industrial operations, laboratories, consumer goods, and pharmaceutical manufacturing. Its technologies help monitor and improve water safety, support treatment and disinfection processes, and enable traceability, quality control, and brand consistency across manufactured products. The company’s portfolio includes instruments, reagents, treatment chemistry, coding and marking systems, inspection tools, software, and color measurement solutions. Veralto Corporation plays an important role in markets where reliability, compliance, and operational efficiency are critical, supporting the quality of essential resources and everyday products worldwide.
Price Overview
Price History (1 Year)
Revenue & Net Income Trend
| Period | Revenue | Net Income | Net Margin | YoY/QoQ |
|---|
Key Metrics
EPS (Diluted): 3.76
Total Equity: $3.11B
Shares: 250,300,000
Total Debt: $2.67B
Cash: $2.03B
EBITDA: $1.36B
Total Debt: $2.67B
Cash: $2.03B
Revenue: $5.50B
Revenue: $5.50B
Revenue: $5.50B
Total Equity: $3.11B
Tax Rate: 19.9%
Equity: $3.11B
Total Debt: $2.67B
Cash: $2.03B
Current Liabilities: $2.06B
Long-Term Debt: $1.97B
Total Debt: $2.67B
Total Equity: $3.11B
Shares: 250,300,000
Shares: 250,300,000
CapEx: -$63.00M
Shares: 250,300,000
Stock Price: $97.21
Net Income: $940.00M
Industry Benchmarks
Income Statement (Annual)
Last updated: Sep 3, 2026 3:11am (3d ago)| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue | $4.7B | $4.9B | $5.0B | $5.2B | $5.5B |
| Cost of Revenue | $2.0B | $2.1B | $2.1B | $2.1B | $2.2B |
| Gross Profit | $2.7B | $2.8B | $2.9B | $3.1B | $3.3B |
| Operating Expenses | $1.7B | $1.6B | $1.8B | $1.9B | $2.0B |
| Operating Income | $1.0B | $1.1B | $1.1B | $1.2B | $1.3B |
| Net Income | $861.0M | $845.0M | $839.0M | $833.0M | $940.0M |
| EBITDA | $1.1B | $1.2B | $1.2B | $1.3B | $1.4B |
| EPS | $3.50 | $3.43 | $3.41 | $3.37 | $3.79 |
| EPS (Diluted) | $3.50 | $3.43 | $3.40 | $3.34 | $3.76 |
Balance Sheet (Annual)
Last updated: Sep 3, 2026 3:00am (3d ago)| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Cash & Equivalents | — | $0 | $762.0M | $1.1B | $2.0B |
| Total Current Assets | — | $1.3B | $2.1B | $2.4B | $3.4B |
| Total Assets | $4.8B | $4.8B | $5.7B | $6.4B | $7.7B |
| Current Liabilities | — | $1.1B | $1.3B | $1.2B | $2.1B |
| Long-Term Debt | — | $0 | $2.6B | $2.6B | $2.0B |
| Total Liabilities | — | $1.6B | $4.3B | $4.4B | $4.6B |
| Total Equity | — | $3.2B | $1.4B | $2.0B | $3.1B |
| Retained Earnings | — | $0 | $178.0M | $917.0M | $1.7B |
Cash Flow (Annual)
Last updated: Sep 3, 2026 3:29am (3d ago)| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Operating Cash Flow | $896.0M | $870.0M | $963.0M | $875.0M | $1.1B |
| Capital Expenditure | -$54.0M | -$34.0M | -$54.0M | -$55.0M | -$63.0M |
| Free Cash Flow | $842.0M | $836.0M | $909.0M | $820.0M | $1.0B |
| Acquisitions (net) | -$60.0M | -$55.0M | $0 | -$363.0M | $0 |
| Net Debt Issued / (Repaid) | $0 | $0 | $2.6B | — | — |
| Dividends Paid | — | $0 | $0 | -$89.0M | -$109.0M |
| Stock Buybacks | — | — | — | — | — |
| Net Change in Cash | $0 | $0 | $762.0M | $339.0M | $930.0M |
Growth Trends (YoY %)
Last updated: Sep 3, 2026 3:11am (3d ago)| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue Growth | +3.6% | +3.1% | +3.4% | +6.0% |
| Gross Profit Growth | +1.7% | +5.1% | +7.0% | +6.2% |
| Operating Income Growth | +6.8% | +2.5% | +6.0% | +5.7% |
| Net Income Growth | -1.9% | -0.7% | -0.7% | +12.8% |
| EBITDA Growth | +4.8% | +2.1% | +4.8% | +5.4% |
Dividend History (Last 20)
Last updated: Aug 31, 2026 12:08pm (6d ago)| Date | Dividend | Declaration | Record | Payment |
|---|---|---|---|---|
| 2026-06-30 | $0.13 | — | — | — |
| 2026-03-31 | $0.13 | — | — | — |
| 2025-12-31 | $0.13 | — | — | — |
| 2025-09-30 | $0.11 | — | — | — |
| 2025-06-30 | $0.11 | — | — | — |
| 2025-03-31 | $0.11 | — | — | — |
| 2024-12-31 | $0.11 | — | — | — |
| 2024-09-27 | $0.09 | — | — | — |
| 2024-06-28 | $0.09 | — | — | — |
| 2024-03-27 | $0.09 | — | — | — |
| 2023-12-28 | $0.09 | — | — | — |
Deep Analysis
Risk : Reward — upside vs downside from this company's own quarters
Computed 2026-09-06 19:32A +1σ run of quarters pays -41%; a −1σ run costs 56%. Ratio -0.7:1 (μ 5.4%, σ 3.8% floored by sector, 10 pairs).
Older method (repeat-worst-quarter): -0.7 : 1
| Case | Growth | Margin | Fair value | vs price ($97.21) |
|---|---|---|---|---|
| Bull — recovery | +8% | 19.9% | $61.82 | -36% |
| Base — stabilizes | +6% | 17.3% | $49.78 | -49% |
| Bear — keeps slipping | +3% | 14.7% | $39.36 | -60% |
| Stress — last quarter repeats | +4% | 17.1% | $46.46 | -52% |
| Upside — a +1σ run of quarters (v2) | +9% | 17.8% | $57.34 | -41% |
| Stress — a −1σ run of quarters (v2) | +2% | 16.8% | $42.48 | -56% |
Narrative Economics
market-narrative step).
Growth Outlook
Analyzed 2026-09-03 03:45The question every valuation on this page silently assumes: is this company likely to grow? Judged forward — the business, its category, the world — against what's already printed.
Claude Reading
Looking at the raw quarterly print first: revenue has climbed from $1.29B (Q2'24) to $1.42B (Q1'26), a clean 10% two-year gain, with net margin expanding from 15.8% to 17.9%. That's not a mature-earner asleep at the wheel — that's ~200bps of margin expansion on mid-single-digit top-line, which is exactly the recipe that earns industrial compounders a premium multiple. FY25 delivered $940M NI on $5.5B revenue (17.1% net margin) versus FY22's $845M on $4.87B (17.4%) — so the multi-year story is flat margins with modest volume growth, but the recent quarterly acceleration is real: Q1'26 NI of $254M annualizes toward ~$1.02B, implying forward P/E closer to 23x, not 26x. FCF conversion is excellent ($1.01B on $940M NI = 107%), capex is trivial at $63M (1.1% of revenue — asset-light for "pollution controls"), and ROIC of 27% is genuinely elite. Net debt is only $640M against $1.08B OCF — leverage is a rounding error.
Where I diverge from the synthesis: the composite fair value of $74.64 (and even the signal-adjusted $81) looks too punitive for a business compounding earnings at 13% YoY with 27% ROIC and 107% FCF conversion. Applying a 22x multiple (fair for this quality tier — think RBC, Roper-lite) to forward ~$4.20 EPS gets you $92, and at 24x you're at $101. The synthesis is anchoring on 4.7% revenue CAGR but ignoring the earnings acceleration (12.9% YoY recent) and the margin trajectory in the quarterly data. The market-forces "hold" call and narrative engine's "+$16 of story premium" read as intellectually tidy but arithmetically stale — if Q1'26 margins hold, this isn't a premium to fundamentals, it's fundamentals catching up to price.
The contrarian bear case worth taking seriously: the quarterly deceleration flag is real if you look at sequential revenue growth — $1.33B → $1.37B → $1.40B → $1.40B → $1.42B shows the Q4→Q1 step was just $20M (1.4% sequential), and Q3→Q4 was zero. If that flattening persists, the 6% YoY comps will roll to 3-4% by mid-2026 and the multiple compresses hard. Also worth flagging: insider activity shows pure sells against option exercises with zero open-market buys — not a red flag for a mature industrial, but no insider is signaling the stock is cheap either. The pre-flight's "traditional industrial" framing understates the recurring reagent/consumable revenue mix which is what actually justifies the premium — this isn't Watts Water, it's closer to a Danaher spinoff (which it literally is) with the associated capital-allocation optionality that the market-forces model dismisses as "unproven." Two years post-spin with clean execution and margin expansion is not "unproven" — it's the base case working.
Data quality note: the 2026-04-03 quarter and 2026-08 insider dates suggest this file is dated into mid-2026, so the "current price $97.21" is likely a mid-2026 print, not stale. The FY25 annuals reconcile with the four 2025 quarters ($5.50B ≈ $1.35+$1.33+$1.37+$1.40+$1.40… wait, that's five quarters — the 2025-12-31 quarterly and annual both show, and quarters sum to $5.50B across Q1-Q4 2025, so this checks out). I'll commit: the synthesis is directionally too bearish. Fair value is $95-105, not $75-81. The stock is roughly fairly valued with a slight lean toward undervalued if you believe the margin expansion sticks — the +200bps of net margin over 18 months is the signal the DCF models are underweighting. I'd disagree with "fully_priced" and call this fairly valued with asymmetric upside if Q2'26 confirms the margin trajectory; downside to $85 if margins mean-revert to 16%, upside to $110 if they hold at 18%+. Not a table-pound but not the "wait for pullback" the synthesis implies.
GPT Reading
What stands out to me is not the theme but the economics: this is a very high-quality industrial asset being valued like a quality compounder already. Revenue has climbed from $4.70B in 2021 to $5.50B in 2025, only about 4% annualized, but margins have quietly improved enough to make that modest top-line growth look better than it is. Gross margin rose from 57.7% to 60.0%, operating margin from 22.1% to 23.2%, and quarterly net margin has stepped up from 15.8% in mid-2024 to 17.9% in the latest quarter. That produces excellent returns: ROIC of 27.3% and ROE above 30%. Cash conversion is also real, not cosmetic. On $940M of 2025 net income, free cash flow was $1.01B, helped by tiny capex of just $63M on a $5.5B revenue base. A business that can turn roughly 18% of sales into free cash flow deserves a premium multiple.
The problem is that the current multiple already assumes the premium is durable and maybe a little richer. At $97.21, the stock trades at 25.9x earnings, 18.3x EBITDA, 4.5x EV/revenue, and about 23.5x FCF. Those are not absurd for an asset-light, recurring, niche industrial franchise, but they are demanding for a company growing revenue 4.7% CAGR and earnings 5.9% CAGR over the multi-year period. Even the recent acceleration is good rather than transformative: latest quarterly revenue was $1.42B versus $1.33B a year earlier, about 6.8% growth, while net income rose from $225M to $254M, about 12.9%. Nice, but not enough for me to underwrite sustained high-20s earnings multiples unless growth can stay high-single-digit with more margin expansion. The market cap of $23.7B against $1.01B of FCF leaves little room for a stumble.
The balance sheet reinforces my view that this is safe, not cheap. Net debt is only about $640M after $2.03B of cash against $2.67B of debt, and the current ratio of 1.67 is healthy. That lowers risk and supports ongoing buybacks, tuck-ins, or dividend growth. But low financial risk is different from valuation upside. Book equity is only $3.11B, so the 7.8x price/book looks eye-popping if taken literally, though in this case it mostly reflects strong intangible economics rather than balance-sheet weakness. Still, when a company has already demonstrated its quality and the market has fully recognized it, upside comes from re-acceleration or M&A value creation, neither of which is visible in this data set. I read this as a classic “great business, just not an obviously attractive stock at this price.”
The best counterargument is straightforward: this company may deserve to stay expensive because the mix is better than the bare growth rate suggests. A nearly 60% gross margin industrial business with 23% operating margins, 17% net margins, and FCF exceeding net income is not a normal industrial. Quarterly progression is also genuinely favorable: revenue went from $1.29B to $1.42B over the last eight quarters, while quarterly net income rose from $203M to $254M. If investors are paying for resilience, recurring consumables/software revenue, and essential water-quality exposure, 25-26x earnings is not crazy. In that framing, comparing it to generic industrial peers misses the point. A smart bull would also note that insider activity here is mostly awards and option-related selling, not a meaningful red flag.
What would change my mind is evidence that the business is shifting from mid-single-digit compounding to something faster or more self-funding than the market already expects. If revenue growth moves into a sustained 8-10% range while net margin holds around 18% or expands, then $97 can be justified and perhaps prove cheap. Likewise, if free cash flow rises materially above $1.1B without leverage creeping up, the current multiple gets easier to defend. On the other side, if quarterly revenue slips back toward 3-4% growth or net income flattens around the $225M-$240M range, I would expect the premium multiple to compress toward something closer to 20-22x earnings, which points to a materially lower stock price than today.
Grok Reading
Veralto’s books read like a textbook mature industrial compounder that has already been discovered. Revenue has marched from $4.70B in 2021 to $5.50B in 2025 at a 4.7% CAGR, while free cash flow of $1.01B on only $63M of capex and a 27.3% ROIC confirm this is a capital-light, high-return franchise—water quality and product identification with genuine stickiness. Quarterly progression is orderly: sales stepped from $1.29B to $1.42B and net margins lifted from 15.8% to roughly 18%, which is why recent earnings grew 12.9% against 6% revenue growth. The operating engine is real. The problem is the ticket price. At $97.21 the stock clears 25.9× earnings, 18.3× EV/EBITDA and 4.4× sales; that is a full industrial-quality multiple for mid-single-digit top-line growth and a sub-1% dividend. Net debt is modest (~$0.64B) and the balance sheet is clean, but none of that invents faster growth.
What stands out against the model stack is the tension between excellent cash conversion and decelerating sequential momentum. The secondary signals already flag “quarterly trend: decelerating” and “macro headwinds,” yet the market still embeds the clean-water/ESG premium that the narrative layer quantifies at roughly $16 above an ~$81 fundamental anchor. I weigh the raw income statement more heavily than the story: five years of 4–6% revenue growth and only recently accelerating margins do not justify paying nearly 26× for a business whose earnings CAGR is 5.9%. Insider activity is noise—option exercises and routine sales—not a tell. The rule-based “mature earner” label is correct; the market is simply paying up as if the earner still has an expansion leg left.
The strongest counter-argument is quality persistence. A skeptic of the cheap side would note 60% gross margins, 23% operating margins, FCF essentially matching net income, and ROE above 30%—metrics that rarely compress in regulated water and coding niches. If mid-single-digit volume growth continues while mix and pricing push net margin toward 19–20%, the earnings power in two years could be $1.1B-plus, making today’s multiple look closer to 20× forward and the $81 fair-value print look stale. Secular regulatory spend on water infrastructure is not imaginary, and Veralto’s low capital intensity means almost every incremental dollar drops to cash available for buybacks or bolt-ons. That is a legitimate reason the stock has held a premium; I simply judge that premium already fully reflected at $97 rather than still incomplete.
I would flip if the next two prints show revenue re-accelerating above 7–8% organic with margins still expanding, or if management deploys the $1B FCF into accretive M&A that visibly lifts the growth algorithm without levering the balance sheet. A sustained multiple compression toward 20–21× on still-rising earnings would also create a clearer entry. Until then the asymmetry is unattractive.
Big-3 Panel — where each AI stands
Advanced Analysis Forensic deep-dive · separate lenses
Veralto shows the profile of a mature industrial compounder: revenue up steadily from $4.70B (2021) to $5.50B (2025), roughly 4% CAGR, with gross margin expanding 220 bps (57.7% to 59.9%) and operating margin holding 22-23%. Net income stepped up to $940M in 2025 after four flattish years, and FCF crossed $1.01B with OCF/NI of 1.08x and accruals of -1.2% of assets - cash conversion is clean and mechanical earnings-quality checks (Beneish -2.47, Altman Z 4.9) show no red flags. Capital structure is solid: $2.03B liquid cash, modest net debt of $642M against $1.01B annual FCF (well under 1x FCF), so leverage is a mild constraint, not a risk. Dilution is essentially absent - diluted shares crept from 246.3M to 250.3M (0.4% CAGR) with SBC only 1.3% of revenue, so per-share economics track economics of the business. Insider tape is neutral: small routine sales tied to option exercises, no open-market buying, nothing alarming.
Verify before trusting this (5)
- Segment mix and organic vs M&A contribution to the 2025 revenue and margin step-up
- Debt maturity schedule and covenants behind the $642M net debt position
- Recurring/consumables revenue share within Water Quality and Product Quality and Innovation segments
- Capital allocation policy - whether buybacks are authorized and pace of M&A
- Customer concentration and end-market exposure (municipal water, CPG, pharma) from the 10-K
The composite fair value of $74.64 and signal-adjusted FV of $80.99 both sit meaningfully below the $97.21 print, implying roughly 17-20% of downside to deserved value. The DCF ($69.99) and EPV floor ($40.92) confirm that on unlevered cash generation this is not a bargain; only the anchored P/E at $117.64 supports the current tape, and that method essentially capitalizes the market's willingness to pay a premium multiple for a clean-water compounder - it is a mirror of sentiment, not an independent check.
Verify before trusting this (4)
- Organic growth cadence in reagents/consumables and software attach - the recurring mix is the whole thesis for the multiple
- Incremental margin trajectory; any stall halts the 'expanding gross margin' story that supports the premium
- M&A pipeline and capital allocation post-spin - deals at fair prices would justify holding the multiple
- Any one-off cost or FX benefit in current EPS that inflates the anchored P/E method
VLTO sits under a genuinely balanced sentiment picture. The tape is mildly constructive (regime score +19, VIX 15.2), and with a 0.75 beta this low-vol industrial compounder barely feels either the risk-on lift or the rate/PE headwind that hits high-beta names harder. The active narrative is a moderate-intensity, moderate-durability 'boring essential infrastructure / clean water' story with low cult factor - it is a supportive floor, not a jet engine, and it is already reflected in a ~20% premium to intrinsic. That means the narrative is neither building nor cracking; it is simply holding. Recent news flow is confirmatory-positive (strategic buyouts, cash profile, Water Quality demand) but not the kind of headline that re-rates a stock. Momentum reads strong-positive on internals (deleveraging, low revenue volatility) which reinforces the compounder frame that sentiment already assigns to this name. Net-net, the pressure is small in both directions: no narrative collapse to fear, no mania to ride. On a stock-specific basis, VLTO is exactly the profile that shrugs off the current macro - defensive industrial, sticky recurring revenue, non-discretionary end market - so the market-wide rates/PE headwind lands soft here.
Verify before trusting this (4)
- Any sell-side target revisions or downgrades citing 'crowded clean-water theme' - would confirm narrative fatigue
- Whether VIX breaks above 20 and rotation goes defensive - would flip this to a tailwind name
- 10y yield direction; a move toward 5% would pressure premium-multiple industrials
- M&A pace and integration commentary on the buyout strategy - key to keeping the compounder story intact
The forces around Veralto are regulatory, not cyclical: PFAS limits, lead-service-line rules, disinfection standards and industrial water reuse mandates convert environmental policy into required testing and treatment spend that utilities and manufacturers cannot defer without compliance exposure. That is a slow, legislated, multi-decade demand ramp — reliable but not explosive, and it arrives as budget increments rather than step-changes. Working against it: a mature installed base, higher financing costs for municipal capex, and a consumer-goods production cycle that governs the Product Quality half. Net read is a defensive grower in a flat category — the world is nudging demand upward at a measured pace while making the market pay for a much faster pace than the plumbing can deliver.
When we made this prediction on Sep 3, 2026, VLTO was $97.24. We expect it to be $91.50 by Mar 2027, and we consider it great value under $78.00. This is an early model (v0.6.0) — the direction is more reliable than the exact price. Made Sep 3, 2026.
Blue is our prediction, starting the day we made it. Grey is a slower route to the same place — the same destination, taking longer. Black is the actual price, so you can see how we are doing.
Post-Report Due Diligence NOTES
Evidence for a closer look, not a verdict — no score or designation on this page has been changed by it. Items marked material are ones where a conclusion above moves to the other side of the price.
trailing_eps
flips down 25%
adjusted_pe
flips down 25%