Alta Equipment Group (ALTG) AI Stock Analysis

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Alta Equipment Group

(NYSE:ALTG)

Rating:61Neutral

Price Target:

$6.00

▲(3.63%Upside)

Alta Equipment Group's strong revenue growth and positive technical momentum are key strengths, but profitability challenges and high leverage are significant risks. The recent earnings call showed positive strategic actions but also highlighted revenue and dividend concerns. The stock is somewhat attractive for investors focusing on potential operational improvements.

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

Market Cap

$184.21M

Dividend Yield4.19%

Average Volume (3M)158.67K

Price to Earnings (P/E)―

Beta (1Y)1.89

Revenue Growth-2.09%

EPS Growth-977.36%

CountryUS

Employees2,900

SectorIndustrials

Sector Strength93

IndustryRental & Leasing Services

Share Statistics

EPS (TTM)-0.47

Shares Outstanding33,191,067

10 Day Avg. Volume189,326

30 Day Avg. Volume158,670

Financial Highlights & Ratios

PEG Ratio0.15

Price to Book (P/B)1.98

Price to Sales (P/S)0.00

P/FCF Ratio-10.94

Enterprise Value/Market Cap7.26

Enterprise Value/Revenue0.18

Enterprise Value/Gross Profit2.75

Enterprise Value/Ebitda1.90

Forecast

1Y Price Target

$8.33

Price Target Upside43.87% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering4

Alta Equipment Group Business Overview & Revenue Model

Company DescriptionAlta Equipment Group Inc. owns and operates integrated equipment dealership platforms in the United States. It operates in two segments, Material Handling and Construction Equipment. The company operates a branch network that sells, rents, and provides parts and service support for various categories of specialized equipment, including lift trucks and aerial work platforms, earthmoving equipment, cranes, paving and asphalt equipment, and other material handling and construction equipment. It also offers repair and maintenance services for its equipment. In addition, the company designs and builds warehouses; and provides automated equipment installation and system integration solutions. It serves diversified manufacturing, food and beverage, wholesale/retail, construction, automotive, municipal/government, and medical sectors. Alta Equipment Group Inc. was founded in 1984 and is headquartered in Livonia, Michigan.

How the Company Makes MoneyAlta Equipment Group generates revenue through several key streams. The primary source of income is the sale of new and used equipment, which includes forklifts, excavators, loaders, and other industrial machinery. Additionally, the company earns significant revenue from its equipment rental services, providing short-term and long-term rental solutions to customers who prefer not to purchase machinery. Alta Equipment Group also offers a wide range of after-sales services, such as maintenance, repair, and parts distribution, which contribute to its recurring revenue. The company has strategic partnerships with leading equipment manufacturers, enabling it to offer high-quality products and leverage manufacturer support, further enhancing its market position and revenue potential.

Alta Equipment Group Earnings Call Summary

Earnings Call Date:May 07, 2025

(Q1-2025)

% Change Since: 28.67%|

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 exhibits strengths in revenue growth and cash flow generation but faces challenges with profitability and high leverage. The income statement reflects steady revenue but inconsistent profits, while the balance sheet highlights financial risks associated with high debt levels. Cash flow improvements are a positive sign, yet variability remains a concern. Overall, the company shows potential but requires better financial management to enhance stability and profitability.

Income Statement

Neutral

Alta Equipment Group's revenue growth has been quite strong over the years, showcasing a significant increase from 2019 to 2022. However, in 2023 and 2024, revenue growth stalled. The gross profit margin is moderate, but the company has struggled with profitability, as evidenced by negative net income in several recent years. The EBIT and EBITDA margins also reflect challenges in maintaining profitability, contributing to a mixed performance in this area.

Balance Sheet

Negative

The balance sheet shows a high debt-to-equity ratio, indicating significant leverage, which could pose financial risks. The equity ratio is low, and there has been a decrease in stockholders' equity over time. The return on equity (ROE) has been inconsistent, with negative net income impacting potential returns for shareholders. Overall, the balance sheet suggests a need for improved financial stability.

Cash Flow

Positive

The company has shown improvement in operating cash flow, with positive free cash flow in 2024 after negative figures in previous years. The operating cash flow to net income ratio is favorable, indicating good cash generation relative to accounting profits. However, fluctuations in free cash flow over the years suggest variability in cash management.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
1.88B	1.88B	1.57B	1.21B	873.60M
	Gross Profit
493.70M	507.20M	419.60M	314.40M	214.50M
	EBIT
18.60M	54.40M	40.80M	18.00M	800.00K
	EBITDA
159.50M	192.10M	154.40M	102.60M	68.20M
	Net Income Common Stockholders
-62.10M	8.90M	9.30M	-20.80M	-24.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
13.40M	31.00M	2.70M	2.30M	1.20M
	Total Assets
1.48B	1.57B	1.29B	982.60M	746.20M
	Total Debt
1.20B	1.18B	921.80M	679.40M	461.00M
	Net Debt
1.19B	1.15B	919.10M	677.10M	459.80M
	Total Liabilities
1.40B	1.42B	1.15B	847.90M	589.30M
	Stockholders Equity
77.60M	149.70M	139.80M	134.70M	156.90M
Cash Flow		Free Cash Flow
-13.50M	-10.80M	-50.70M	-19.70M	-84.30M
	Operating Cash Flow
57.00M	63.80M	26.00M	30.70M	-38.40M
	Investing Cash Flow
-56.20M	-122.80M	-162.60M	-113.40M	-224.50M
	Financing Cash Flow
-17.90M	87.30M	136.90M	83.80M	264.10M

Alta Equipment Group Technical Analysis

Technical Analysis Sentiment

Positive

Last Price5.79

Price Trends

50DMA

4.66

Positive

100DMA

5.44

Positive

200DMA

6.04

Negative

Market Momentum

MACD

0.18

Negative

RSI

64.72

Neutral

STOCH

84.72

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 5.79 is above the 20-day moving average (MA) of 5.07, above the 50-day MA of 4.66, and below the 200-day MA of 6.04, indicating a neutral trend. The MACD of 0.18 indicates Negative momentum. The RSI at 64.72 is Neutral, neither overbought nor oversold. The STOCH value of 84.72 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 1 New Risks

The Company relies on OEM captive finance companies to provide floor plan financing primarily for new equipment. This OEM captive floor plan financing provides for a large portion of the Company's ongoing working capital requirements. The Company's liquidity position, financial condition, cash flows and results from operations could be adversely affected in the event any of our OEM captive finance company agreements were terminated and/or amended to the detriment of the Company. Q4, 2024

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	$3.97B	26.54	9.60%	2.29%	8.34%	-63.02%
CTOS	66 Neutral	$1.02B	―	-3.76%	―	-0.61%	-248.58%
Sector *	66 Neutral	$4.49B	12.28	5.32%	248.53%	4.08%	-12.00%
WSC	65 Neutral	$5.07B	308.66	1.28%	0.25%	-0.77%	-94.12%
ALTG	61 Neutral	$184.21M	―	-73.72%	4.19%	-2.09%	-977.36%
FPAY	57 Neutral	$30.48M	―	-4.33%	―	19.51%	29.43%
HEES	56 Neutral	$3.47B	38.00	15.74%	1.16%	-3.52%	-46.60%

* Industrials Sector Average

Performance Comparison

ALTG

Alta Equipment Group

5.79

-2.29

-28.34%

WSC

WillScot Mobile Mini Holdings

27.46

-10.65

-27.95%

HEES

H&E Equipment Services

94.64

50.22

113.06%

HRI

Herc Holdings

119.04

-11.33

-8.69%

FPAY

FlexShopper

1.38

0.22

18.97%

CTOS

Custom Truck One Source

4.53

-0.15

-3.21%

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

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.