Mcgrath Rentcorp (MGRC) AI Stock Analysis

• Market Cap: $2.66B
• Dividend Yield: 1.79%
• Average Volume (3M): 120.59K
• Price to Earnings (P/E): 18.3
• Beta (1Y): 0.80
• Revenue Growth: 4.77%
• EPS Growth: -35.44%
• Country: US
• Employees: 1,219
• Sector: Industrials
• Sector Strength: 72
• Industry: Rental & Leasing Services
• EPS (TTM): 1.72
• Shares Outstanding: 24,611,656
• 10 Day Avg. Volume: 125,424
• 30 Day Avg. Volume: 120,586
• PEG Ratio: 0.37
• Price to Book (P/B): 2.44
• Price to Sales (P/S): 3.01
• P/FCF Ratio: 8.21
• Enterprise Value/Market Cap: 1.29
• Enterprise Value/Revenue: 3.69
• Enterprise Value/Gross Profit: 7.79
• Enterprise Value/Ebitda: 10.20
• 1Y Price Target: $143.00
• Price Target Upside: 32.33% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): 6.19
• Revenue Forecast (FY): $941.79M

• Rating: 58 Neutral
• Price Target: $107.00 ▼(-0.98% Downside)

The overall stock score reflects significant challenges in technical analysis and financial performance. While there are positive aspects such as operational efficiency and a reasonable valuation, bearish technical indicators and mixed earnings call results weigh heavily on the score.

Positive Factors

Operational Efficiency

A high gross profit margin indicates efficient cost management, allowing the company to maintain profitability even in challenging market conditions.

Market Stabilization

Diversification into energy and data centers suggests potential stabilization and growth, reducing reliance on the construction sector and enhancing resilience.

Education Sector Growth

Significant funding in the education sector provides growth opportunities for McGrath's modular space solutions, supporting long-term revenue expansion.

Negative Factors

Revenue Decline

A decline in total and sales revenues indicates potential challenges in demand, which could impact future growth and profitability.

Cash Flow Concerns

Significant decline in free cash flow limits the company's ability to invest in growth opportunities and manage debt, affecting long-term financial health.

Profitability Decline

A declining net profit margin suggests reduced profitability, which could hinder the company's ability to reinvest in its business and reward shareholders.

Mcgrath Rentcorp Business Overview & Revenue Model

Company Description

McGrath RentCorp (MGRC) is a diversified rental services company that operates primarily in two segments: Modular Space and Portable Storage. The Modular Space segment provides temporary modular buildings for various applications, including education, healthcare, and commercial uses. The Portable Storage segment offers storage container rentals for businesses and individuals. The company focuses on delivering high-quality products and exceptional customer service while maintaining a strong commitment to safety and sustainability.

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 use of their products. Key revenue streams include rental income from modular space units, storage containers, and related services such as transportation and installation. Additionally, the company benefits from the sale of products and services related to its offerings. Significant partnerships with contractors, government agencies, and various industries enhance its market presence and contribute to its earnings by providing a steady demand for its rental services.

Mcgrath Rentcorp Financial Statement Overview

Summary

McGrath Rentcorp demonstrates operational efficiency with strong EBIT and EBITDA margins, but faces challenges in revenue growth and cash flow generation. The balance sheet is stable with moderate leverage, yet declining return on equity highlights potential profitability concerns.

Income Statement

McGrath Rentcorp's income statement shows a strong gross profit margin of 47.37% for TTM, indicating efficient cost management. However, the net profit margin has decreased to 15.62% from 25.44% in the previous year, reflecting a decline in profitability. The revenue growth rate is negative at -1.10% TTM, suggesting a contraction in sales. Despite these challenges, the company maintains a healthy EBIT margin of 24.73% and an EBITDA margin of 36.15% TTM, showcasing operational efficiency.

Balance Sheet

The balance sheet reveals a moderate debt-to-equity ratio of 0.46 TTM, indicating a balanced approach to leveraging. Return on equity has decreased to 12.59% TTM from 20.63% in the previous year, pointing to reduced profitability for shareholders. The equity ratio stands at 50.88% TTM, reflecting a stable capital structure with a significant portion of assets financed by equity.

Cash Flow

Cash flow analysis shows a significant decline in free cash flow growth at -43.92% TTM, raising concerns about cash generation. The operating cash flow to net income ratio is 1.14 TTM, indicating adequate cash flow relative to net income. However, the free cash flow to net income ratio has decreased to 0.71 TTM, suggesting less cash available after capital expenditures.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	931.22M	910.94M	831.84M	635.66M	616.83M	572.55M
Gross Profit	441.16M	435.42M	393.63M	259.29M	266.21M	263.75M
EBITDA	336.67M	468.35M	299.40M	258.26M	238.91M	235.40M
Net Income	145.43M	231.73M	174.62M	115.14M	89.70M	101.98M
Balance Sheet
Total Assets	2.35B	2.31B	2.27B	1.71B	1.61B	1.29B
Cash, Cash Equivalents and Short-Term Investments	7.26M	807.00K	877.00K	957.00K	1.49M	1.24M
Total Debt	551.80M	602.83M	777.75M	425.34M	437.45M	231.04M
Total Liabilities	1.15B	1.18B	1.33B	903.90M	878.24M	605.20M
Stockholders Equity	1.20B	1.12B	933.80M	803.95M	732.02M	682.60M
Cash Flow
Free Cash Flow	150.19M	334.15M	-178.32M	-10.87M	78.92M	80.45M
Operating Cash Flow	211.54M	374.38M	95.34M	194.43M	195.74M	180.50M
Investing Cash Flow	-97.99M	-150.75M	-391.87M	-131.43M	-351.70M	-53.00M
Financing Cash Flow	-110.36M	-223.69M	296.44M	-63.53M	156.20M	-128.45M

Mcgrath Rentcorp Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 108.06
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: 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 108.06 is above the 20-day moving average (MA) of 104.55, above the 50-day MA of 107.54, and below the 200-day MA of 112.95, indicating a neutral trend. The MACD of 0.60 indicates Negative momentum. The RSI at 55.87 is Neutral, neither overbought nor oversold. The STOCH value of 62.34 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MGRC.

Mcgrath Rentcorp Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
R	73 Outperform	$7.73B	16.25	16.26%	1.81%	1.68%	9.91%
WLFC	71 Outperform	$915.82M	8.04	18.91%	0.85%	27.90%	19.25%
WSC	69 Neutral	$3.43B	15.59	21.15%	1.52%	-3.64%	867.62%
HRI	67 Neutral	$5.12B	―	-4.05%	1.82%	19.40%	-120.47%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
MGRC	58 Neutral	$2.66B	18.29	12.70%	1.79%	4.77%	-35.44%
CTOS	50 Neutral	$1.35B	-53.84	-3.00%	―	7.39%	34.57%

Mcgrath Rentcorp Corporate Events

McGrath RentCorp Issues $75 Million Senior Notes

On September 8, 2025, McGrath RentCorp issued $75 million of 5.30% Series G Senior Notes to The Prudential Insurance Company of America and PruCo Life Insurance Company of New Jersey. These unsecured notes, maturing in 2032, come with semi-annual interest payments and can be prepaid under certain conditions. The issuance includes customary covenants and default events, with guarantees from certain U.S. subsidiaries, potentially impacting the company’s financial obligations and market positioning.