B2B rental company McGrath Q2 revenue beats estimates

Overview

• McGrath Q2 revenue rises 11% to $235.6 mln, beating analyst expectations

• Net income for Q2 increases to $36 mln, EPS at $1.46

• Co updates full-year revenue outlook to $925-$960 mln

Outlook

• Company expects full-year revenue between $925 mln and $960 mln versus prior guidance range of $920 mln to $960 mln

• McGrath forecasts adjusted EBITDA for 2025 at $347 mln to $356 mln

• Company maintains gross rental equipment capital expenditures at $115 mln to $125 mln

• McGrath sees incrementally positive outlook entering second half of 2025

Result Drivers

• REVENUE GROWTH - 11% increase in total revenues driven by higher rental operations and sales revenues, per CEO Joe Hanna

• MODULAR RENTALS - 5% growth in modular rental revenues across commercial and education sectors despite softer market demand

• TRS-RENTELCO PERFORMANCE - 7% increase in rental revenues due to broad-based demand improvement across customer segments

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "strong buy" and the breakdown of recommendations is 2 "strong buy" or "buy", no "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the business support services peer group is "buy."

• Wall Street's median 12-month price target for McGrath RentCorp is $143.50, about 19.8% above its July 23 closing price of $115.05

• The stock recently traded at 18 times the next 12-month earnings vs. a P/E of 18 three months ago

Press Release: ID:nBw1gLFY7a