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Reasons Why Investors Can Consider Buying Veralto Stock Now
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Key Takeaways
Veralto shares gained 20.9% in a month, outpacing the industry's 10.9% growth amid strong growth prospects.
Water treatment demand drove 11.6% y/y growth in chemical treatment and 10.8% in UV treatment in Q3'26.
Veralto raised its 2026 adjusted EPS guidance to $4.49-$4.52, backed by recurring revenues & margin gains.
Veralto (VLTO - Free Report) has delivered impressive performance over the past month and shows potential to sustain its near-term momentum. Therefore, if you have not yet taken advantage of the share price appreciation of this leading provider of water analytics, water treatment, marking and coding, and packaging and color solutions, you should add the stock to your portfolio.
What Makes VLTO an Attractive Pick?
An Outperformer: A glimpse at the company’s price trend reveals that the stock has had a decent run over the past month. Shares of Veralto have risen 20.9% compared with the 10.9% growth of the industry it belongs to.
Image Source: Zacks Investment Research
Solid Rank: VLTO currently carries a Zacks Rank #2 (Buy). Our research shows that stocks with a Zacks Rank #1 (Strong Buy) or #2 offer attractive investment opportunities for investors.
Northward Estimate Revisions: Over the past 60 days, three earnings estimates for fiscal 2026 have moved northward, reflecting analysts’ confidence in the company. The Zacks Consensus Estimate for 2026 earnings has increased 1.8% during this period.
Positive Earnings Surprise: VLTO has an impressive earnings surprise history. The company outpaced the Zacks Consensus Estimate in each of the trailing four quarters, delivering an earnings surprise of 7.3% on average.
Strong Growth Prospects: The Zacks Consensus Estimate for VLTO’sfourth-quarter 2026 revenues is pegged at $1.552 billion, indicating a 9.1% increase from the year-ago quarter. For 2026, the consensus estimate is $5.93 billion, suggesting 7.8% year-over-year growth.
The consensus estimate for fourth-quarter earnings is pegged at $1.14 per share, indicating 9.6% year-over-year growth. For the full year, the consensus mark is pegged at $4.46 per share, implying 14.1% growth from the prior year.
Growth Factors:
Rising Water Treatment Demand: Growing demand for water efficiency, reuse and treatment continues to support VLTO’s Water Quality (WQ) segment, particularly across data centers, chemical processing, power and mining. In the third quarter of 2026, chemical water treatment core sales rose 11.6%, while UV treatment grew 10.8%, reflecting broad-based industrial demand and increased water infrastructure investments. These structural growth drivers are expected to be supported by recurring demand and industrial investments to sustain WQ’s growth momentum.
Digital Workflow Expansion: Growing adoption of digital packaging, compliance and traceability solutions supports the company’s Product Quality & Innovations segment. In the third quarter of 2026, packaging and color core sales rose 3.5%, driven by increased demand for digital workflows and color measurement equipment. Digital workflow growth is expected to accelerate in the upcoming quarters, supported by product innovation, strategic acquisitions and rising demand for efficient packaging and compliance solutions.
Strategic Acquisitions Support Growth: VLTO continues to strengthen its portfolio through targeted acquisitions in water analytics, treatment and digital workflows. The additions of In-Situ, GlobalVision, Alfaa UV and Cleanwater1 expand its presence in higher-growth markets, enhance technological capabilities and create opportunities for recurring revenue growth. Management expects acquisitions to contribute approximately 2.5% to total sales growth in 2026, reinforcing its long-term growth strategy.
Recurring Revenues & Efficiency Drive Earnings Growth: VLTO’s recurring revenue model, disciplined pricing and cost optimization initiatives continue to support profitability and cash generation. Recurring sales accounted for 62% of total revenues in the third quarter of 2026, while adjusted operating margin expanded 170 basis points, reflecting operating leverage and efficiency gains. Supported by these trends, management raised its full-year 2026 adjusted EPS guidance to $4.49-$4.52, representing 15-16% year-over-year growth.
Other Stocks to Consider
A couple of other top-ranked stocks in the broader Business Services sector are Climb Global Solutions, Inc. (CLMB - Free Report) and The GEO Group, Inc. (GEO - Free Report) .
GigaCloud Technology sports a Zacks Rank #1 at present. It has a long-term earnings growth expectation of 18%. CLMB earnings beat estimates in three of the trailing four quarters and missed once, with the surprise being 4.4%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The GEO Group also flaunts a Zacks Rank of 1 at present. It has a long-term earnings growth expectation of 14%. GEO beat estimates in three of the trailing four quarters and matched once, delivering an earnings surprise of 24.1%, on average.
View the Zacks #1 Rank List
Image: Bigstock
Reasons Why Investors Can Consider Buying Veralto Stock Now
Key Takeaways
Veralto (VLTO - Free Report) has delivered impressive performance over the past month and shows potential to sustain its near-term momentum. Therefore, if you have not yet taken advantage of the share price appreciation of this leading provider of water analytics, water treatment, marking and coding, and packaging and color solutions, you should add the stock to your portfolio.
What Makes VLTO an Attractive Pick?
An Outperformer: A glimpse at the company’s price trend reveals that the stock has had a decent run over the past month. Shares of Veralto have risen 20.9% compared with the 10.9% growth of the industry it belongs to.
Image Source: Zacks Investment Research
Solid Rank: VLTO currently carries a Zacks Rank #2 (Buy). Our research shows that stocks with a Zacks Rank #1 (Strong Buy) or #2 offer attractive investment opportunities for investors.
Northward Estimate Revisions: Over the past 60 days, three earnings estimates for fiscal 2026 have moved northward, reflecting analysts’ confidence in the company. The Zacks Consensus Estimate for 2026 earnings has increased 1.8% during this period.
Positive Earnings Surprise: VLTO has an impressive earnings surprise history. The company outpaced the Zacks Consensus Estimate in each of the trailing four quarters, delivering an earnings surprise of 7.3% on average.
Strong Growth Prospects: The Zacks Consensus Estimate for VLTO’sfourth-quarter 2026 revenues is pegged at $1.552 billion, indicating a 9.1% increase from the year-ago quarter. For 2026, the consensus estimate is $5.93 billion, suggesting 7.8% year-over-year growth.
The consensus estimate for fourth-quarter earnings is pegged at $1.14 per share, indicating 9.6% year-over-year growth. For the full year, the consensus mark is pegged at $4.46 per share, implying 14.1% growth from the prior year.
Growth Factors:
Rising Water Treatment Demand: Growing demand for water efficiency, reuse and treatment continues to support VLTO’s Water Quality (WQ) segment, particularly across data centers, chemical processing, power and mining. In the third quarter of 2026, chemical water treatment core sales rose 11.6%, while UV treatment grew 10.8%, reflecting broad-based industrial demand and increased water infrastructure investments. These structural growth drivers are expected to be supported by recurring demand and industrial investments to sustain WQ’s growth momentum.
Digital Workflow Expansion: Growing adoption of digital packaging, compliance and traceability solutions supports the company’s Product Quality & Innovations segment. In the third quarter of 2026, packaging and color core sales rose 3.5%, driven by increased demand for digital workflows and color measurement equipment. Digital workflow growth is expected to accelerate in the upcoming quarters, supported by product innovation, strategic acquisitions and rising demand for efficient packaging and compliance solutions.
Veralto Corporation Revenue (TTM)
Veralto Corporation revenue-ttm | Veralto Corporation Quote
Strategic Acquisitions Support Growth: VLTO continues to strengthen its portfolio through targeted acquisitions in water analytics, treatment and digital workflows. The additions of In-Situ, GlobalVision, Alfaa UV and Cleanwater1 expand its presence in higher-growth markets, enhance technological capabilities and create opportunities for recurring revenue growth. Management expects acquisitions to contribute approximately 2.5% to total sales growth in 2026, reinforcing its long-term growth strategy.
Recurring Revenues & Efficiency Drive Earnings Growth: VLTO’s recurring revenue model, disciplined pricing and cost optimization initiatives continue to support profitability and cash generation. Recurring sales accounted for 62% of total revenues in the third quarter of 2026, while adjusted operating margin expanded 170 basis points, reflecting operating leverage and efficiency gains. Supported by these trends, management raised its full-year 2026 adjusted EPS guidance to $4.49-$4.52, representing 15-16% year-over-year growth.
Other Stocks to Consider
A couple of other top-ranked stocks in the broader Business Services sector are Climb Global Solutions, Inc. (CLMB - Free Report) and The GEO Group, Inc. (GEO - Free Report) .
GigaCloud Technology sports a Zacks Rank #1 at present. It has a long-term earnings growth expectation of 18%. CLMB earnings beat estimates in three of the trailing four quarters and missed once, with the surprise being 4.4%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The GEO Group also flaunts a Zacks Rank of 1 at present. It has a long-term earnings growth expectation of 14%. GEO beat estimates in three of the trailing four quarters and matched once, delivering an earnings surprise of 24.1%, on average.