Alta Equipment Group (ALTG) AI Stock Analysis

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Alta Equipment Group

(NYSE:ALTG)

Rating:61Neutral

Price Target:

$6.50

▲(4.17%Upside)

The overall stock score is influenced by strong technical indicators and strategic moves reflected in the earnings call, despite financial challenges such as high leverage and negative profitability. The valuation score is impacted by the current negative earnings, but the focus on share repurchases suggests management's belief in the company's intrinsic value.

Alta Equipment Group (ALTG) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$207.11M

Dividend Yield3.65%

Average Volume (3M)175.45K

Price to Earnings (P/E)―

Beta (1Y)1.94

Revenue Growth-2.09%

EPS Growth-977.36%

CountryUS

Employees2,900

SectorIndustrials

Sector Strength85

IndustryRental & Leasing Services

Share Statistics

EPS (TTM)-0.47

Shares Outstanding33,191,067

10 Day Avg. Volume217,083

30 Day Avg. Volume175,454

Financial Highlights & Ratios

PEG Ratio-6.35

Price to Book (P/B)0.50

Price to Sales (P/S)0.00

P/FCF Ratio-3.21

Enterprise Value/Market Cap2.19

Enterprise Value/Revenue0.06

Enterprise Value/Gross Profit0.93

Enterprise Value/Ebitda0.71

Forecast

1Y Price Target

$8.33

Price Target Upside33.49% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering4

Alta Equipment Group Business Overview & Revenue Model

Company DescriptionAlta Equipment Group (ALTG) is a leading provider of industrial and construction equipment, serving a wide range of sectors including construction, logistics, agriculture, and material handling. The company offers an extensive portfolio of products and services, including new and used equipment sales, rental solutions, and a comprehensive suite of support services. Alta Equipment Group operates across multiple locations in the United States, leveraging a strong network to deliver top-tier products and customer service.

How the Company Makes MoneyAlta Equipment Group generates revenue through several key streams: equipment sales, rentals, and support services. The company sells both new and used industrial and construction equipment, providing customers with a range of options to suit their needs and budgets. Rentals are another significant revenue source, as businesses often prefer leasing equipment for short-term projects. Additionally, Alta offers maintenance and repair services, parts sales, and equipment financing, which contribute to their earnings. Strategic partnerships with leading equipment manufacturers enhance Alta's product offerings and market reach, bolstering their revenue potential.

Alta Equipment Group Earnings Call Summary

Earnings Call Date:May 07, 2025

(Q1-2025)

% Change Since: 38.67%|

Next Earnings Date:Aug 06, 2025

Earnings Call Sentiment Neutral

The earnings call highlighted several positive developments, such as strong performance in product support and strategic divestitures, which were offset by challenges, including a decline in overall revenue and the suspension of the dividend. The company also faces uncertainties related to tariffs. Despite these challenges, Alta Equipment Group demonstrated resilience and strategic focus, as evidenced by the increased share repurchase program.

Q1-2025 Updates

Positive Updates

Solid Performance in Product Support

The product support business held strong and remains a critical pillar of strength. Service gross margin increased by 230 basis points year-over-year, adding $2.7 million in gross margin.

Positive Developments in Construction Equipment

The construction equipment market expanded modestly year-over-year, driven by infrastructure-related projects, despite some regional softening in private nonresidential construction.

Successful Divestiture of Aerial Equipment Rental Business

Alta Equipment Group strategically divested its aerial equipment rental business in the Chicagoland market, generating approximately $20 million in cash proceeds.

Increased Share Repurchase Program

The Board of Directors increased the share repurchase program by $10 million, bringing the total to $30 million, alongside a $10 million allocation to a Rule 10b5-1 plan.

Master Distribution Segment Growth

Ecoverse, part of the Master Distribution segment, outperformed last year's revenue figure by 35.9% due to strong demand for environmental processing equipment.

Negative Updates

Decline in Revenue

The company recorded revenue of $423 million, a reduction of 4.2% compared to last year, due to reduced new equipment sales and lower rental revenues.

Suspension of Quarterly Dividend

The Board of Directors authorized the indefinite suspension of the quarterly dividend, reallocating resources to share buybacks.

Challenges in Material Handling Segment

New equipment sales in the Material Handling segment were down due to elevated delivery volumes in the previous year. However, stronger margins helped offset lower delivery volumes.

Uncertain Impact of Tariffs

The company faces challenges due to tariffs, with potential impacts on demand if surcharges increase beyond the current 0-10% range.

Company Guidance

During the first quarter of 2025, Alta Equipment Group provided several key metrics in their earnings call. The company reported a revenue of $423 million, marking a 4.2% decline year-over-year. Despite this reduction, adjusted EBITDA was $33.6 million, only down by $0.5 million compared to Q1 2024, showcasing strong cost management and operational efficiency. Gross margins improved with a notable 230 basis point year-over-year increase in service gross margin and a 290 basis point gain specifically in the Construction segment. The company also managed a significant $7.9 million reduction in SG&A expenses. On the balance sheet front, Alta ended the quarter with approximately $290 million in cash and available credit, and a strategic divestiture of the aerial equipment rental business in Illinois yielded $20 million in cash proceeds. Alta reaffirmed their fiscal year 2025 adjusted EBITDA guidance, now projected between $171.5 million and $186.5 million, after accounting for the recent divestiture. Additionally, the company announced a shift in capital allocation strategy, suspending their quarterly dividend to focus on a $30 million share repurchase program, reflecting confidence in Alta's intrinsic value and commitment to shareholder returns.

Alta Equipment Group Financial Statement Overview

Summary

Alta Equipment Group shows strong revenue growth but struggles with profitability and high leverage. The significant debt load and negative free cash flow highlight potential risks, particularly in economic downturns or interest rate hikes. Operational efficiency improvements and debt management are key areas for enhancing financial health.

Income Statement

Positive

Alta Equipment Group's revenue has shown strong growth over the past few years, notably increasing from $873.6 million in 2020 to $1.86 billion TTM. However, profitability remains a challenge with a negative net income of $71.1 million TTM, resulting in a negative net profit margin. The gross profit margin is robust at 26.3% TTM, indicating good control over cost of goods sold. EBIT and EBITDA margins are relatively low at 1.09% and 6.21% TTM, respectively, suggesting room for improvement in operational efficiency.

Balance Sheet

Neutral

The balance sheet reflects a high debt burden with a debt-to-equity ratio of 6.38 TTM, which poses a risk if interest rates rise or cash flows are disrupted. Stockholders' equity has declined, leading to a low equity ratio of 3.72%. Although the company maintains a stable asset base, the high leverage could impact financial stability.

Cash Flow

Neutral

Operating cash flow decreased to $47 million TTM from $57 million in the previous year, with free cash flow remaining negative at -$1.8 million TTM. The cash flow to net income ratios are unfavorable due to negative net income, indicating challenges in converting revenue into cash flow. Free cash flow growth is constrained by high capital expenditures, impacting overall liquidity.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
1.86B	1.88B	1.88B	1.57B	1.21B	873.60M
	Gross Profit
488.10M	493.70M	507.20M	419.60M	314.40M	214.50M
	EBIT
20.30M	18.60M	54.40M	40.80M	18.00M	-8.10M
	EBITDA
115.30M	159.50M	192.10M	154.40M	102.60M	68.20M
	Net Income Common Stockholders
-71.10M	-62.10M	8.90M	9.30M	-20.80M	-24.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
11.10M	13.40M	31.00M	2.70M	2.30M	1.20M
	Total Assets
1.50B	1.48B	1.57B	1.29B	982.60M	746.20M
	Total Debt
357.60M	1.20B	1.18B	921.80M	679.40M	461.00M
	Net Debt
346.50M	1.19B	1.15B	919.10M	677.10M	459.80M
	Total Liabilities
1.45B	1.40B	1.42B	1.15B	847.90M	589.30M
	Stockholders Equity
56.00M	77.60M	149.70M	139.80M	134.70M	156.90M
Cash Flow		Free Cash Flow
-1.80M	-13.50M	-10.80M	-50.70M	-19.70M	-84.30M
	Operating Cash Flow
47.00M	57.00M	63.80M	26.00M	30.70M	-38.40M
	Investing Cash Flow
-52.40M	-56.20M	-122.80M	-162.60M	-113.40M	-224.50M
	Financing Cash Flow
7.00M	-17.90M	87.30M	136.90M	83.80M	264.10M

Alta Equipment Group Technical Analysis

Technical Analysis Sentiment

Positive

Last Price6.24

Price Trends

50DMA

4.83

Positive

100DMA

5.39

Positive

200DMA

6.04

Positive

Market Momentum

MACD

0.39

Negative

RSI

68.26

Neutral

STOCH

88.10

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ALTG, the sentiment is Positive. The current price of 6.24 is above the 20-day moving average (MA) of 5.43, above the 50-day MA of 4.83, and above the 200-day MA of 6.04, indicating a bullish trend. The MACD of 0.39 indicates Negative momentum. The RSI at 68.26 is Neutral, neither overbought nor oversold. The STOCH value of 88.10 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ALTG.

Alta Equipment Group Risk Analysis

Alta Equipment Group disclosed 33 risk factors in its most recent earnings report. Alta Equipment Group 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

Alta Equipment Group Peers Comparison

Overall Rating

UnderperformOutperform

Sector (66)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HRI	66 Neutral	$3.78B	25.39	9.60%	2.46%	8.34%	-63.02%
CTOS	66 Neutral	$1.05B	―	-3.76%	―	-0.61%	-248.58%
Sector *	66 Neutral	$4.47B	12.21	5.40%	3.65%	4.14%	-12.00%
ALTG	61 Neutral	$207.11M	―	-73.72%	3.65%	-2.09%	-977.36%
WSC	59 Neutral	$4.87B	296.45	1.28%	1.05%	-0.77%	-94.12%
FPAY	48 Neutral	$27.26M	―	-4.33%	―	19.51%	29.43%

* Industrials Sector Average

Performance Comparison

ALTG

Alta Equipment Group

6.24

-1.91

-23.44%

WSC

WillScot Mobile Mini Holdings

26.71

-11.59

-30.26%

HRI

Herc Holdings

113.90

-14.56

-11.33%

FPAY

FlexShopper

1.27

0.05

4.10%

CTOS

Custom Truck One Source

4.64

0.25

5.69%

Alta Equipment Group Corporate Events

M&A TransactionsStock BuybackDividends

Alta Equipment Group Expands Stock Repurchase Program

Neutral

May 7, 2025

On May 1, 2025, Alta Equipment Group‘s Construction Equipment segment divested its aerial fleet rental business in Chicago for $18 million, aiming to reduce senior indebtedness. The Board increased the stock repurchase program from $20 million to $30 million and suspended the quarterly dividend, reallocating funds to enhance shareholder returns.

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.