Mcgrath Rentcorp (MGRC)
NASDAQ:MGRC
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Mcgrath Rentcorp
(NASDAQ:MGRC)
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Rating:70Outperform
Price Target:
$127.00
▲(11.55% Upside)
Action:UpgradedDate:02/26/26
The score is driven primarily by solid underlying financial performance (growth, resilient gross margins, and improving leverage) tempered by recent net margin compression and uneven cash-flow history. Technicals are modestly supportive with neutral momentum, while valuation is mid-range with a moderate dividend. The latest earnings call reinforces a cautious-but-constructive outlook, and the CEO succession looks orderly.
Positive Factors
Revenue and Gross Margin Resilience
Consistent multi-year revenue growth and gross margins near the high-40% range provide durable operating leverage. This margin resilience supports sustained cash generation and reinvestment capacity, helping buffer the business through cyclical soft patches and fund dividends and targeted expansion.
Negative Factors
Net Margin Compression
Net margin deterioration in 2025, despite revenue growth, signals margin pressure from mix, utilization or cost increases. Reduced net margins weaken earnings resilience, limit cash available for reinvestment or dividends, and raise execution risk in meeting profitability targets if headwinds persist.
Read all positive and negative factors
Positive Factors
Negative Factors
Revenue and Gross Margin Resilience
Consistent multi-year revenue growth and gross margins near the high-40% range provide durable operating leverage. This margin resilience supports sustained cash generation and reinvestment capacity, helping buffer the business through cyclical soft patches and fund dividends and targeted expansion.
Read all positive factors
Mcgrath Rentcorp (MGRC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.80B
Dividend Yield1.79%
Average Volume (3M)175.01K
Price to Earnings (P/E)16.5
Beta (1Y)0.68
Revenue Growth4.77%
EPS Growth-35.44%
CountryUS
Employees1,219
SectorIndustrials
Sector Strength72
IndustryRental & Leasing Services
Share Statistics
EPS (TTM)2.02
Shares Outstanding24,611,656
10 Day Avg. Volume215,651
30 Day Avg. Volume175,013
Financial Highlights & Ratios
PEG Ratio-0.50
Price to Book (P/B)2.09
Price to Sales (P/S)2.73
P/FCF Ratio12.22
Enterprise Value/Market Cap1.18
Enterprise Value/Revenue3.51
Enterprise Value/Gross Profit7.37
Enterprise Value/Ebitda9.46
Forecast
1Y Price Target
$141.50Price Target Upside24.29% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
EPS Forecast (FY)6.65
Revenue Forecast (FY)$982.45M
Mcgrath Rentcorp Business Overview & Revenue Model
Company Description
McGrath RentCorp operates as a business to business rental company in the United States and internationally. It rents and sells relocatable modular buildings, portable storage containers, electronic test equipment and related accessories, and liqu...
How the Company Makes Money
McGrath RentCorp generates revenue primarily through the rental of modular buildings and portable storage containers. The company's revenue model is based on long-term and short-term rental agreements, with customers paying monthly fees for the us...
Mcgrath Rentcorp Earnings Call Summary
Earnings Call Date:Feb 25, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 29, 2026
Earnings Call Sentiment Positive
The call conveyed solid operational and financial progress—notably strong adjusted EBITDA growth (+14%), a robust recovery at TRS (revenues +19%, EBITDA +21%), improving services revenue at Mobile Modular, and a continued commitment to capital allocation and dividends—while acknowledging meaningful headwinds from a soft nonresidential construction market, lower utilization in modulars, and pressure on portable storage profitability. Management provided a constructive but cautious 2026 guide that depends on execution of geographic expansion, sales initiatives and continued TRS momentum.Positive Updates
Company-Level Revenue and Profitability Growth
Total company revenues rose 5% in Q4 to $257.0M and adjusted EBITDA increased 14% year-over-year to $105.0M, reflecting improved profitability across the portfolio.
Negative Updates
Challenging Nonresidential Construction Market
Persistent weakness in nonresidential construction (soft ABI) created headwinds across modular and portable storage businesses, limiting new modular unit sales (new unit sales down in Q4 and for full year) and pressuring demand in certain commercial categories.
Read all updates
Q4-2025 Updates
Positive
Negative
Company-Level Revenue and Profitability Growth
Total company revenues rose 5% in Q4 to $257.0M and adjusted EBITDA increased 14% year-over-year to $105.0M, reflecting improved profitability across the portfolio.
Read all positive updates
Company Guidance
McGrath's 2026 guidance calls for total revenue of $945–$995 million, adjusted EBITDA of $360–$378 million and gross rental equipment capital expenditures of $180–$200 million (including roughly $20 million of lifecycle/maintenance CapEx), with rental equipment depreciation of $85–$89 million, direct cost of rental operations of $122–$126 million, SG&A of $225–$229 million and interest expense of about $26–$29 million. Management expects Mobile Modular to grow adjusted EBITDA in 2026 despite starting the year at lower utilization (Q4 utilization 71.3% vs 76% a year earlier), and plans $5–$8 million of incremental operating expense to ready fleet and add targeted CapEx for geographic expansion; Portable Storage is expected to be roughly comparable to 2025 (Q4 rental revenue $17.3M, utilization ~61.2%); TRS should contribute higher adjusted EBITDA with increased capital investment after a strong Q4 (Q4 total revenue $40.6M, rental revenue $28.7M up 13%, utilization 64.5%, rental margin 44%, Q4 adj. EBITDA $23.1M); Enviroplex revenues/margins/adj. EBITDA are expected to normalize closer to 2024 levels. The company enters the year with net borrowings of $515 million and a funded debt to LTM adjusted EBITDA ratio of 1.42x, and noted operational KPIs such as monthly revenue per unit on rent up 6% to $874 (12‑month new‑shipments ARPU down 3% to $1,169) that will factor into execution.Mcgrath Rentcorp Financial Statement Overview
Summary
Income Statement
74
Positive
Balance Sheet
78
Positive
Cash Flow
71
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 944.24M | 910.94M | 831.84M | 635.66M | 616.83M |
| Gross Profit | 434.84M | 435.42M | 393.63M | 259.29M | 266.21M |
| EBITDA | 350.77M | 468.35M | 299.40M | 258.26M | 238.91M |
| Net Income | 156.31M | 231.73M | 174.62M | 115.14M | 89.70M |
Balance Sheet | |||||
| Total Assets | 2.36B | 2.31B | 2.27B | 1.71B | 1.61B |
| Cash, Cash Equivalents and Short-Term Investments | 295.00K | 807.00K | 877.00K | 957.00K | 1.49M |
| Total Debt | 527.79M | 602.83M | 777.75M | 425.34M | 437.45M |
| Total Liabilities | 1.12B | 1.18B | 1.33B | 903.90M | 878.24M |
| Stockholders Equity | 1.24B | 1.12B | 933.80M | 803.95M | 732.02M |
Cash Flow | |||||
| Free Cash Flow | 211.30M | 334.15M | -178.32M | -10.87M | 78.92M |
| Operating Cash Flow | 255.68M | 374.38M | 95.34M | 194.43M | 195.74M |
| Investing Cash Flow | -127.11M | -150.75M | -391.87M | -131.43M | -351.70M |
| Financing Cash Flow | -129.08M | -223.69M | 296.44M | -63.53M | 156.20M |
Mcgrath Rentcorp Technical Analysis
Positive
113.85
Price Trends
111.44
Positive
108.55
Positive
112.85
Positive
Market Momentum
0.61
Negative
60.78
Neutral
64.82
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MGRC, the sentiment is Positive. The current price of 113.85 is above the 20-day moving average (MA) of 108.42, above the 50-day MA of 111.44, and above the 200-day MA of 112.85, indicating a bullish trend. The MACD of 0.61 indicates Negative momentum. The RSI at 60.78 is Neutral, neither overbought nor oversold. The STOCH value of 64.82 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MGRC.
Mcgrath Rentcorp Risk Analysis
Mcgrath Rentcorp disclosed 41 risk factors in its most recent earnings report. Mcgrath Rentcorp reported the most risks in the "Production" 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 |
|---|---|---|---|---|---|---|---|
70 Outperform | $2.80B | 16.52 | 13.21% | 1.79% | 4.77% | -35.44% | |
64 Neutral | $1.36B | 8.05 | 16.94% | 0.82% | 27.90% | 19.25% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
61 Neutral | $8.75B | 16.03 | 16.36% | 1.75% | 1.68% | 9.91% | |
51 Neutral | $3.38B | -64.81 | -5.35% | 1.44% | -3.64% | 867.62% | |
47 Neutral | $3.45B | 4,644.29 | 0.06% | 1.79% | 19.40% | -120.47% | |
47 Neutral | $1.65B | -42.03 | -3.00% | ― | 7.39% | 34.57% |
* Industrials Sector Average
MGRC
Mcgrath Rentcorp
113.85
11.28
11.00%
WSC
WillScot Mobile Mini Holdings
18.67
-5.72
-23.44%
HRI
Herc Holdings
103.37
-9.26
-8.22%
R
Ryder System
222.04
85.66
62.81%
WLFC
Willis Lease Finance
201.09
62.62
45.22%
CTOS
Custom Truck One Source
7.28
3.87
113.49%
Mcgrath Rentcorp Corporate Events
Business Operations and StrategyExecutive/Board Changes
McGrath RentCorp announces planned CEO succession and transition
Positive
Feb 5, 2026
On February 5, 2026, McGrath RentCorp announced that longtime President and Chief Executive Officer Joseph F. Hanna will retire from his executive roles effective April 3, 2026, while remaining on the company’s board of directors. The board ...
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.