In the current market session, McGrath RentCorp Inc. (NASDAQ:MGRC) price is at $96.27, after a 0.40% spike. However, over the past month, the stock fell by 12.14%, and in the past year, by 17.19%. Shareholders might be interested in knowing whether the stock is undervalued, even if the company is performing up to par in the current session. McGrath RentCorp P/E Compared to CompetitorsThe P/E ratio is used by long-term shareholders to assess the company's market performance against aggregate market data, his ...

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Core Viewpoint - McGrath (MGRC) reported quarterly earnings of $1.72 per share, missing the Zacks Consensus Estimate of $1.83 per share, and showing a decline from $1.87 per share a year ago, indicating an earnings surprise of -6.01% [1][2] Financial Performance - The company posted revenues of $256.44 million for the quarter ended September 2025, missing the Zacks Consensus Estimate by 3.42%, and down from $266.76 million year-over-year [2] - Over the last four quarters, McGrath has surpassed consensus EPS estimates three times and topped consensus revenue estimates two times [2] Stock Performance - McGrath shares have increased approximately 9.3% since the beginning of the year, compared to the S&P 500's gain of 13.9% [3] - The current Zacks Rank for McGrath is 3 (Hold), indicating expected performance in line with the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $1.82 on revenues of $257 million, and for the current fiscal year, it is $6.25 on revenues of $953.54 million [7] - The trend of estimate revisions for McGrath was mixed ahead of the earnings release, which could change following the recent report [6] Industry Context - The Financial - Leasing Companies industry, to which McGrath belongs, is currently in the top 40% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [8] - Another company in the same industry, Upbound Group (UPBD), is expected to report quarterly earnings of $0.98 per share, reflecting a year-over-year change of +3.2% [9]

Financial Data and Key Metrics Changes - Total revenues decreased by 4% to $256 million, with rental operations increasing by 4% and sales revenues decreasing by 18% [9][15] - Adjusted EBITDA decreased by 7% to $96.5 million, and net income decreased by 8% to $42.3 million [9][14] - Diluted earnings per share decreased by $0.15 to $1.72 [9] Business Line Data and Key Metrics Changes - Mobile Modular total revenues decreased by 5% to $181.5 million, with rental revenues increasing by 2% and rental-related services revenues increasing by 5%, offset by a 21% decrease in sales revenues [9][11] - Portable Storage rental revenues increased by 1% to $17.3 million, marking the first year-over-year growth since Q1 of the previous year [11] - TRS-RenTelco total revenues increased by 6% to $36.9 million, driven by a 9% increase in rental revenues [12] Market Data and Key Metrics Changes - Utilization rates for Mobile Modular decreased to 72.6% from 77.1% year-over-year, while TRS-RenTelco's utilization improved to 64.8% from 57.3% [10][12] - Average monthly revenue per unit on rent increased by 6% year-over-year to $865 [10] Company Strategy and Development Direction - The company is focused on expanding its modular and portable storage businesses, entering new regions, and increasing coverage through tuck-in acquisitions [7][8] - The company aims to become a national modular solutions provider, offering a range of storage and space solutions [7] Management's Comments on Operating Environment and Future Outlook - Management noted that project activity remained steady despite market uncertainties, and they are encouraged by positive signs suggesting market stabilization [3][5] - The company has upwardly revised its full-year financial outlook, expecting total revenue between $935 and $955 million [15] Other Important Information - The company is managing the impact of tariffs effectively, with minimal effects on results [6] - Cash flow highlights include net cash provided by operating activities of $175 million and a decrease in rental equipment purchases to $92 million [14] Q&A Session Summary Question: Can you address the lumpiness of sales activity and the run rate in the business? - Management confirmed that sales backlog is strong and projects that did not close in Q3 will move into Q4, maintaining a positive sales outlook [17][18] Question: Is the business on an upward trajectory? - Management anticipates continued growth, emphasizing the importance of being positioned to meet customer needs [19] Question: How is funding in the education sector? - Management reported solid funding for education, with significant bonds passed in California and Texas, indicating a positive outlook for the education business [20][21] Question: Can you speak to the rate environment across both modular and portable storage? - Rates are holding steady, with efforts to maintain rental rates despite some transportation cost adjustments [22] Question: How is visibility for TRS-RenTelco heading into next year? - Management expressed optimism about strong bookings and rental order volume, indicating good momentum [25][26] Question: Can you elaborate on technology investments? - Management clarified that technology investments are aimed at updating systems and enhancing customer service [27][37] Question: What is the cash usage prioritization for next year? - Management highlighted a strong free cash flow position, allowing for flexibility in acquisitions and investments [60][61]

Financial Data and Key Metrics Changes - Total revenues decreased by 4% to $256 million, with rental operations increasing by 4% and sales revenues decreasing by 18% [9][15] - Adjusted EBITDA decreased by 7% to $96.5 million, and net income decreased by 8% to $42.3 million [9][14] - Diluted earnings per share decreased by $0.15 to $1.72 [9] Business Line Data and Key Metrics Changes - Mobile Modular total revenues decreased by 5% to $181.5 million, with rental revenues increasing by 2% and rental-related services revenues increasing by 5%, offset by a 21% decrease in sales revenues [9][11] - Portable Storage rental revenues increased by 1% year-over-year to $17.3 million, marking the first year-over-year growth since Q1 of the previous year [11] - TRS-RenTelco total revenues increased by 6% to $36.9 million, driven by a 9% increase in rental revenues [12] Market Data and Key Metrics Changes - The rental demand pipelines remained solid entering Q4, indicating a positive outlook for continued growth [6] - Average fleet utilization for Mobile Modular decreased to 72.6% from 77.1% a year earlier, while TRS-RenTelco's utilization improved to 64.8% from 57.3% [10][12] Company Strategy and Development Direction - The company is focused on expanding its modular and portable storage businesses, entering new regions, and growing Mobile Modular Plus and site-related services [7][8] - The company aims to become a national modular solutions provider, capable of serving diverse customer needs [7] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the sales outlook, citing a strong sales backlog and positive trends in inquiries and booked orders [18][43] - The company is not currently facing immediate headwinds from the federal government shutdown, although potential long-term impacts remain unclear [6] - Management noted that the dynamic tariff environment has been managed with minimal impact on results [7] Other Important Information - The company has revised its full-year financial outlook, expecting total revenue between $935 million and $955 million and adjusted EBITDA between $350 million and $357 million [15] - The company reported net cash provided by operating activities of $175 million and reduced rental equipment purchases to $92 million from $167 million last year [14] Q&A Session Summary Question: Can you address the lumpiness of the sales activity and the run rate in the business? - Management confirmed that sales activity is expected to be more balanced this year, with a strong sales backlog and positive outlook for the year [18] Question: Is the business on an upward trajectory? - Management anticipates continued growth, emphasizing the importance of being well-positioned to meet customer needs [19] Question: How is funding in the education sector? - Management reported solid funding for education projects, with significant bonds passed in California and Texas, indicating a positive outlook for the education business [21] Question: Can you speak to the rate environment across both modular and portable storage? - Management indicated that rates are holding steady, with efforts to maintain rental rates despite some transportation cost adjustments [22] Question: How is visibility for TRS-RenTelco heading into next year? - Management expressed optimism about strong bookings and rental order volume, indicating a positive outlook for the upcoming year [26] Question: Can you elaborate on technology investments? - Management clarified that technology investments are aimed at updating systems and enhancing customer-facing capabilities [37]

Financial Data and Key Metrics Changes - Total revenues decreased by 4% to $256 million, with rental operations increasing by 4% and sales revenues decreasing by 18% [13] - Adjusted EBITDA decreased by 7% to $96.5 million, while net income decreased by 8% to $42.3 million [13][14] - Diluted earnings per share decreased by $0.15 to $1.72 [13] Business Line Data and Key Metrics Changes - Mobile Modular total revenues decreased by 5% to $181.5 million, with rental revenues up by 2% and rental-related services revenues up by 5%, offset by a 21% decrease in sales revenues [13][14] - Portable Storage rental revenues increased by 1% year over year to $17.3 million, marking the first year-over-year growth since Q1 of the previous year [15] - TRS RenTelco total revenues increased by 6% to $36.9 million, driven by a 9% increase in rental revenues [16] Market Data and Key Metrics Changes - Utilization rates for Mobile Modular decreased to 72.6% from 77.1% a year earlier, while Portable Storage utilization was at 61.4% compared to 62.8% a year ago [14][15] - Average monthly revenue per unit on rent increased by 6% year over year to $865 [14] Company Strategy and Development Direction - The company is focused on expanding its modular and portable storage businesses, entering new regions, and increasing coverage through acquisitions [11] - The strategy includes becoming a national modular solutions provider capable of serving diverse customer needs [11] Management's Comments on Operating Environment and Future Outlook - Management noted ongoing market uncertainties but expressed optimism due to increased booked orders and stable pricing [5][10] - The company has upwardly revised its full-year financial outlook, expecting total revenue between $935 million and $955 million [20] Other Important Information - The company is managing the impact of tariffs effectively, with minimal effects on results [10] - Cash flow highlights include net cash provided by operating activities of $175 million and a decrease in rental equipment purchases to $92 million [19] Q&A Session Summary Question: Can you address the lumpiness of sales activity? - Management confirmed that sales backlog is strong and projects that did not close in Q3 will move into Q4, maintaining a positive sales outlook [23][24] Question: Is the business on an upward trajectory? - Management anticipates continued growth, emphasizing the importance of being positioned to meet customer needs [25][26] Question: How is the education sector performing? - Management reported solid funding for education projects, with significant bonds passed in California and Texas, indicating a positive outlook for the education business [29][30] Question: What is the rate environment like? - Rates are holding steady, with efforts to maintain rental rates despite some transportation cost concessions [31][32] Question: How is visibility for TRS heading into next year? - Management noted strong bookings and rental order volume, indicating positive momentum heading into Q4 [38][39] Question: Can you elaborate on technology investments? - Management highlighted ongoing technology investments to keep systems relevant and customer-friendly [44][45] Question: What is the cash usage prioritization for next year? - Management indicated a strong free cash flow position, allowing for flexibility in acquisitions and capital expenditures [70][72] Question: How are the recent acquisitions progressing? - The two small acquisitions are integrated and contributing positively, with no red flags noted [63][65]

McGrath RentCorp (NasdaqGS:MGRC) Q3 2025 Earnings Call October 23, 2025 05:00 PM ET Speaker4Ladies and gentlemen, thank you for standing by. Welcome to the McGrath RentCorp Third Quarter 2025 earnings call. At this time, all conference participants are in a listen-only mode. Later, we will conduct a question and answer session. At that time, if you have a question, you will need to press the star key followed by the one key on your telephone. This conference call is being recorded today, Thursday, October 2 ...

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Company Overview - McGrath RentCorp's total revenue for 2024 was $911 million [9] - Adjusted EBITDA for 2024 was $352 million [9] - The company has a shareholder return CAGR of 16% based on 1984 IPO through 12/31/24 [9] - 99% of total revenues are from North America [9] Business Segment Performance (2024) - Mobile Modular accounted for 67% of total revenues and 75% of total Adjusted EBITDA [11] - Portable Storage accounted for 12% of total revenues and 10% of total Adjusted EBITDA [11] - TRS-RenTelco accounted for 21% of total revenues and 15% of total Adjusted EBITDA [11] Q3 2025 Highlights - Total revenues decreased by 4% to $256.4 million [31] - Adjusted EBITDA decreased by 7% to $96.4 million [31] - Rental Operations revenues increased 4% to $178.1 million [31] - TRS-RenTelco rental revenues increased 9% [30] 2025 Financial Outlook - Total Revenues are projected to be between $935 million and $955 million [47] - Adjusted EBITDA is projected to be between $350 million and $357 million [47] - Gross Rental Equipment Capital Expenditures are projected to be between $120 million and $125 million [47]