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Mcgrath Rentcorp (MGRC)
:MGRC
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Mcgrath Rentcorp
(NASDAQ:MGRC)
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Rating:75Outperform
Price Target:
$131.00
▲(13.64% Upside)
McGrath Rentcorp's strong financial performance and positive earnings call sentiment are the primary drivers of its overall score. While technical analysis indicates bearish momentum, the company's solid fundamentals and strategic growth initiatives provide a strong foundation. The valuation is attractive, supporting the stock's potential for long-term growth.
Mcgrath Rentcorp (MGRC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.84B
Dividend Yield1.67%
Average Volume (3M)128.48K
Price to Earnings (P/E)11.2
Beta (1Y)0.79
Revenue Growth8.78%
EPS Growth117.40%
CountryUS
Employees1,219
SectorIndustrials
Sector Strength72
IndustryRental & Leasing Services
Share Statistics
EPS (TTM)1.46
Shares Outstanding24,611,530
10 Day Avg. Volume136,407
30 Day Avg. Volume128,476
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap1.21
Enterprise Value/Revenue3.64
Enterprise Value/Gross Profit7.68
Enterprise Value/Ebitda7.06
Forecast
1Y Price Target
$143.00Price Target Upside24.05% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
Mcgrath Rentcorp Business Overview & Revenue Model
Company DescriptionMcGrath RentCorp (MGRC) is a diversified rental company that provides modular space and portable storage solutions across various sectors, including construction, education, healthcare, and government. The company operates through two primary segments: Modular Space and Mobile Storage, offering a range of products such as portable classrooms, office space, and storage containers. With a focus on providing flexible, cost-effective rental solutions, McGrath RentCorp serves a diverse customer base, ensuring that they meet the unique demands of temporary space and storage needs.
How the Company Makes MoneyMcGrath RentCorp generates revenue primarily through the rental of modular space and mobile storage units. The company operates on a rental model, charging customers on a monthly basis for the use of its products. Key revenue streams include long-term and short-term rentals, as well as ancillary services such as delivery, setup, and maintenance of the rental units. McGrath RentCorp also earns revenue from the sale of used equipment and containers. Significant partnerships with construction firms, educational institutions, and government agencies further contribute to the company's earnings, as these sectors often require reliable and scalable rental solutions for their projects.
Mcgrath Rentcorp Earnings Call Summary
Earnings Call Date:Jul 24, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Oct 23, 2025
Earnings Call Sentiment Positive
The earnings call highlighted solid financial performance in the second quarter and positive growth across several key segments, including significant revenue increases in the Mobile Modular and TRS-RenTelco divisions. The company successfully navigated an uncertain economic environment and made strategic acquisitions to bolster growth. Challenges were noted in the Portable Storage segment, with decreased rental revenues and higher operational expenses. However, the overall positive performance and upwardly adjusted outlook for the remainder of 2025 indicate a generally positive sentiment.Q2-2025 Updates
Positive Updates
Solid Second Quarter Results
Total revenues increased 11% to $235.6 million. Adjusted EBITDA grew by 3% to $86.5 million, and rental operations grew by 5%.
Mobile Modular Division Performance
The Mobile Modular division saw total revenues increase by 8%, with rental revenue growth in both the commercial and education sectors. Modular sales revenues also increased by 13%.
TRS-RenTelco Growth
TRS-RenTelco's rental revenues grew by 7%, with utilization improving to 65%. Adjusted EBITDA for TRS increased by 7% to $19.3 million.
Modular Sales Initiative Success
The new modular sales growth initiative showed positive results, with increased interest in modular solutions for construction projects across many market segments.
Tuck-In Acquisitions
The company closed two tuck-in acquisitions, a modular company in the Midwest and a portable storage company in the Southeast, enhancing fleet and customer relationships.
Positive Outlook for Second Half of 2025
The company has upwardly adjusted its outlook for the remainder of 2025, expecting total revenue between $925 million and $960 million, and adjusted EBITDA between $347 million and $356 million.
Negative Updates
Challenges in Portable Storage
Portable Storage saw rental revenues decrease by 5% year-over-year, though they improved 5% sequentially from the first quarter. Adjusted EBITDA for Portable Storage decreased by 11% compared to the prior year.
Higher Inventory Center and SG&A Expenses
The quarter included higher inventory center expenses and SG&A expenses due to strategic hiring for broader sales coverage and long-term growth.
Softer Demand Conditions
There was a decrease in average fleet utilization to 73.7% compared to 78.4% a year earlier, reflecting softer demand conditions.
Company Guidance
During the McGrath RentCorp Second Quarter 2025 Earnings Call, the company provided guidance for the remainder of the year, indicating a positive outlook with some upward adjustments. They reported total revenues of $235.6 million, an increase of 11% from the previous year, and an adjusted EBITDA of $86.5 million, up 3%. For the Mobile Modular division, total revenues grew 8% to $156 million, with rental revenues increasing by 5%. Despite some market uncertainties, such as fluctuations in the Architecture Billings Index, the company expressed optimism due to improved construction backlogs and strong customer interest. They also noted a 13% rise in modular sales revenues and a 7% increase in TRS-RenTelco rental revenues with improved utilization rates. Portable Storage faced a year-over-year rental revenue decrease of 5%, but sequential improvement of 5% was noted. The company completed two acquisitions and continues to focus on strategic growth through geographic expansion and enhancing modular solutions capabilities. They forecast total revenues for 2025 between $925 million and $960 million, with adjusted EBITDA expected to range from $347 million to $356 million.Mcgrath Rentcorp Financial Statement Overview
Summary
McGrath Rentcorp demonstrates strong financial health with significant revenue growth, robust profitability margins, and efficient cash flow management. The company maintains a balanced leverage with a solid return on equity, indicating effective financial management.Income Statement
The income statement shows strong revenue growth with a steady increase over the years, reaching $941.5M in the TTM period. Gross profit margin is healthy at 47.4% and net profit margin stands robust at 26.8% in TTM. Revenue growth from 2024 to TTM is 3.4%, indicating consistent business expansion. EBIT and EBITDA margins remain solid, reflecting efficient operations.85
Very Positive
Balance Sheet
The balance sheet displays a balanced financial position with a debt-to-equity ratio of 0.49 in TTM, showing manageable leverage. Return on equity is strong at 21.7%, suggesting effective utilization of equity capital. The equity ratio stands at 50.0%, indicating a stable equity base relative to assets. The financial stability is supported by healthy equity and manageable debt levels.78
Positive
Cash Flow
Cash flow analysis reveals robust free cash flow growth, recovering from negative figures in 2023 to $267.8M in TTM. Operating cash flow to net income ratio is 1.37, showing strong cash generation capability. Free cash flow to net income ratio is also healthy at 1.06, reflecting excellent cash flow management and operational efficiency.82
Very Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 941.54M | 910.94M | 831.84M | 635.66M | 534.59M | 572.55M |
| Gross Profit | 445.89M | 435.42M | 393.63M | 336.91M | 281.02M | 263.75M |
| EBITDA | 485.17M | 468.35M | 299.40M | 258.26M | 230.75M | 235.40M |
| Net Income | 252.45M | 231.73M | 174.62M | 115.14M | 89.70M | 101.98M |
Balance Sheet | ||||||
| Total Assets | 2.33B | 2.28B | 2.22B | 1.71B | 1.60B | 1.28B |
| Cash, Cash Equivalents and Short-Term Investments | 1.47M | 807.00K | 877.00K | 957.00K | 1.49M | 1.24M |
| Total Debt | 572.52M | 590.21M | 762.98M | 425.34M | 426.45M | 222.75M |
| Total Liabilities | 1.16B | 1.15B | 1.28B | 903.90M | 863.90M | 593.14M |
| Stockholders Equity | 1.16B | 1.12B | 933.80M | 803.95M | 732.02M | 682.60M |
Cash Flow | ||||||
| Free Cash Flow | 267.83M | 334.15M | -178.32M | -10.87M | 78.92M | 80.45M |
| Operating Cash Flow | 345.44M | 374.38M | 95.34M | 194.43M | 195.74M | 180.50M |
| Investing Cash Flow | -78.47M | -150.75M | -391.87M | -131.43M | -351.70M | -53.00M |
| Financing Cash Flow | -274.90M | -223.69M | 296.44M | -63.53M | 156.20M | -128.45M |
Mcgrath Rentcorp Technical Analysis
Negative
115.28
Price Trends
121.40
Negative
118.36
Negative
115.85
Negative
Market Momentum
-1.56
Positive
35.73
Neutral
10.33
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MGRC, the sentiment is Negative. The current price of 115.28 is below the 20-day moving average (MA) of 120.49, below the 50-day MA of 121.40, and below the 200-day MA of 115.85, indicating a bearish trend. The MACD of -1.56 indicates Positive momentum. The RSI at 35.73 is Neutral, neither overbought nor oversold. The STOCH value of 10.33 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MGRC.
Mcgrath Rentcorp Risk Analysis
Mcgrath Rentcorp disclosed 42 risk factors in its most recent earnings report. Mcgrath Rentcorp reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Mcgrath Rentcorp Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $7.88B | 16.49 | 16.38% | 1.73% | 3.68% | 6.61% | |
75 Outperform | $2.84B | 11.23 | 23.85% | 1.67% | 8.78% | 117.40% | |
66 Neutral | $3.95B | 36.24 | 9.82% | 0.97% | -2.34% | -37.24% | |
66 Neutral | $930.95M | 8.12 | 19.97% | 0.73% | 30.08% | 32.62% | |
66 Neutral | $1.48B | ― | -4.37% | ― | 6.21% | -177.57% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
56 Neutral | $4.26B | 148.59 | 1.41% | 2.16% | 11.41% | -92.67% |
* Industrials Sector Average
MGRC
Mcgrath Rentcorp
115.28
8.42
7.88%
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Mcgrath Rentcorp Corporate Events
Executive/Board ChangesShareholder Meetings
McGrath RentCorp Shareholders Approve Key Proposals at Annual Meeting
Neutral
Jun 5, 2025
On June 4, 2025, McGrath RentCorp held its annual meeting of shareholders where several key proposals were voted on. The shareholders elected directors, ratified the appointment of Grant Thornton LLP as independent auditors for 2025, and approved the compensation of the company’s named executive officers on a non-binding, advisory basis.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.