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what it is
It makes tools that test water, treat water, and mark products for factories.
how it gets paid
Last year Veralto made $5.5B in revenue. Water analytics was the main engine at $1.7B, or 31% of sales.
why it's growing
Revenue grew ~6.0% last year. ~60.2% gross margin is the number—it shows how much of each sales dollar survives before overhead.
what just happened
Veralto posted $1.04 EPS, a 2.97% beat.
At a glance
B++ balance sheet — above average — nothing keeping you up at night
27.2x trailing p/e — priced about right
0.6% dividend yield — cash in your pocket every quarter
30.0% return on capital — every dollar works hard here
$4.15 fy2026 eps est
xvary composite: 60/100 — average
What they do
It makes tools that test water, treat water, and mark products for factories.
You are buying 16,000 employees around water and factory chores. 60.2% gross margin means 60 cents of every sales dollar stays before overhead. 30.0% return on capital versus 7% debt of capital says the machine earns more than it owes.
How they make money
$5.5B
annual revenue · their business grew +6.0% last year
Water analytics
$1.7B
Water treatment
$1.5B
Marking and coding
$1.1B
Packaging and color services
$1.2B
The products that matter
water testing and treatment systems
Water Quality
$2.8B · 51% of revenue
this is the larger half of the company at $2.8B, and it grew 7% last year. If you are buying the clean-water angle, this is the part you mean.
51% of revenue
marking, coding, and traceability equipment
Product Identification
$2.7B · 49% of revenue
this $2.7B segment grew 5% last year and serves packaging and industrial customers. It is the other half of the cash machine, just with less of the water narrative attached.
49% of revenue
Key numbers
$4.15
fy2026 eps est
$7B
fy2028 rev est
27.2x
trailing p/e
0.6%
dividend yield
Financial health
B++
strength
- balance sheet grade B++ — above average financial health
- risk rank 3 — safer than 50% of stocks
- long-term debt $2.0B (7% of capital)
- net profit margin 19.5% — keeps 20 cents of every dollar in revenue
- return on equity 44% — $0.44 profit for every $1 investors have put in
B++ — functional but not a standout on the balance sheet.
Total return vs. market
Return history isn't available for VLTO right now.
source: institutional data · return history unavailable
What just happened
beat estimates
Veralto posted $1.04 EPS, a 2.97% beat.
Consensus was $1.01. With ~$5.5B FY revenue, a single quarter is ~$1.4B ballpark—not $4.1B as consolidated quarterly sales (that old line looked like a mis-tagged total). Gross margin ~60.2% can still apply to the same Q.
~$1.38B
quarter revenue (FY÷4)
$1.04
eps
60.2%
gross margin
gross margin
60.2% margin is the number. It shows how much of each sales dollar survives before overhead.
-
both figures improved at a high-single-digit clip, from a year ago.
-
for the recently ended year, even after fractionally lowering our full-year projections, the company is expected to log notable sales and earnings advances.
-
in the same breath, we look for solid top- and bottom-line growth vs. prior year for 2026.
-
the board of directors recently increased the quarterly dividend payment 18%, to $0.13 per share.
-
the raise was likely prompted by strong earnings and free cash flow prospects, as well as a cash-rich balance sheet with a manageable long-term debt load.
source: company earnings report, 2026
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What could go wrong
the top risk is multiple compression if growth stays merely steady.
med
Premium multiple, ordinary growth
The stock trades at 27.2x trailing earnings while revenue grew 6% last year. That can work for a high-quality compounder, but it leaves less room for even a small disappointment.
If growth stays around the current pace, the downside can come from the multiple rather than from a collapse in the business.
med
Water Quality carries half the story
Water Quality produced $2.8B of revenue and 51% of the total. If municipal, industrial, or testing demand softens, the larger segment will feel it first.
More than half the business sits in one segment, so steadiness there matters more than any headline beat elsewhere.
med
Product Identification is the other half
Product Identification generated $2.7B, or 49% of revenue. It serves packaging and industrial customers, which means slower customer spending can show up in orders and equipment demand.
This is the part of the company that can remind you Veralto is still an industrial name, not just a clean-water narrative.
med
Still early as a standalone company
Veralto separated from Danaher on Sep 30, 2023. The business is not brand new anymore, but it is still early enough that the market is judging whether standalone execution looks Danaher-like or merely decent.
When investors pay a premium for quality, even normal post-spin growing pains can matter more than they should.
Between Water Quality at $2.8B and Product Identification at $2.7B, all $5.5B of revenue still has to prove it deserves a premium industrial multiple.
source: institutional data · regulatory filings · risk analysis
Pay attention to
valuation
Whether 27.2x still looks justified
A premium multiple is fine when the business keeps printing 19.5% net margins and steady growth. It gets harder to defend if growth stays stuck near 6%.
segment mix
Water Quality staying ahead
Water Quality grew 7% versus 5% for Product Identification. If that gap widens, the water narrative becomes more than branding.
dividend
Next payout after the 18% raise
The quarterly dividend is now $0.13 per share, with the next payment due Mar 4, 2026. Small check, useful signal.
fund flows
Whether institutions stop leaning seller
Three straight quarters of net selling is not dramatic, but it matters more when the stock already sits near the top of its $74–$110 range.
Analyst rankings
xvary composite
60 / 100
Average overall. In human-speak, this looks like a quality company priced close to what the market already knows.
balance sheet grade
B++
Above average balance sheet quality. Good enough to support the thesis, not strong enough to be the thesis.
risk rank
3
Safer than roughly half the market. That is respectable, but it is not the kind of safety cushion that excuses any price.
source: institutional data
Institutional activity
institutions have been net selling for 3 consecutive quarters — 434 buyers vs. 451 sellers in 3q2025. total institutional holdings: 0.2B shares. net selling for 3 quarters.
source: institutional data
Price targets
3-5 year target range
$89
$150
$102
current price
$120
target midpoint · +18% from current · 3-5yr high: $190 (+85% · 17% ann'l return)
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