Veralto Stock: Is VLTO Underperforming the Industrial Sector?
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With a market cap of $24.2 billion, Veralto Corporation (VLTO) is a global provider of technology solutions focused on water and product quality. It operates through two main segments: Water Quality (WQ) and Product Quality & Innovation (PQI), offering a wide range of instrumentation, treatment technologies, marking and coding systems, and digital asset management tools.
Companies valued at more than $10 billion are generally considered “large-cap” stocks, and Veralto fits this criterion perfectly. Veralto serves industries including municipal utilities, food and beverage, pharmaceuticals, and industrials.
Shares of the Waltham, Massachusetts-based company have decreased 15.3% from its 52-week high of $115. Veralto’s shares have fallen 1% over the past three months, underperforming the Industrial Select Sector SPDR Fund’s (XLI) nearly 8% gain over the same time frame.
In the longer term, VLTO stock is down 4.3% on a YTD basis, lagging behind XLI’s 8.9% increase. In addition, shares of the water and product quality services provider have declined 3.1% over the past 52 weeks, compared to XLI’s 17.2% return over the same time frame.
The stock has been trading below its 200-day moving average since February. But, it climbed above the 50-day average since May.
Shares of Veralto rose over 3% following its Q1 2025 results on Apr. 29, with adjusted EPS of $0.95 surpassing the consensus estimate and rising 13.1% year-over-year. Revenue grew 6.9% year-over-year to $1.3 billion, exceeding expectations, driven by solid 8.3% growth in the Product Quality & Innovation segment. Additionally, a robust free cash flow of $142 million and a significant increase in cash reserves to $1.2 billion boosted investor confidence despite cautious Q2 guidance.
However, VLTO stock has lagged behind its rival, Federal Signal Corporation (FSS). FSS stock has returned 10.1% on a YTD basis and 19.6% over the past 52 weeks.
Despite the stock’s underperformance, analysts remain moderately optimistic about its prospects. The stock has a consensus rating of “Moderate Buy” from 15 analysts' coverage, and as of writing, VLTO is trading below the mean price target of $109.14.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.