Mcgrath Rentcorp (MGRC)
NASDAQ:MGRC
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Mcgrath Rentcorp
(NASDAQ:MGRC)
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Rating:69Neutral
Price Target:
$125.00
▲(6.96% Upside)
Action:Downgraded
Date:05/12/26
MGRC’s score is primarily supported by solid underlying financial performance (healthy margins, improved leverage, and positive free cash flow), but tempered by normalization from peak profitability and uneven cash flow trends. Technical signals are neutral-to-slightly positive, while valuation appears somewhat full at ~25x earnings. The latest earnings call maintained guidance but highlighted meaningful near-term margin, utilization, and segment weakness, partially offset by strong TRS results and pricing momentum; the extended credit facility is an additional modest positive.
Positive Factors
Healthy Profitability & Margins
Sustained gross and operating margins with a mid‑teens net margin provide durable earnings power across the rental cycle. Robust margins support reinvestment in fleet, service expansion, and shareholder distributions, improving resilience to cyclical revenue swings.
Negative Factors
Margin Pressure / EBITDA Decline
A decline in adjusted EBITDA despite revenue growth signals margin compression from higher prep, logistics, and SG&A costs. Persistent margin pressure would erode free cash flow and limit the company's ability to fund fleet growth, dividends, and buybacks without raising leverage.
Read all positive and negative factors
Positive Factors
Negative Factors
Healthy Profitability & Margins
Sustained gross and operating margins with a mid‑teens net margin provide durable earnings power across the rental cycle. Robust margins support reinvestment in fleet, service expansion, and shareholder distributions, improving resilience to cyclical revenue swings.
Read all positive factors
Mcgrath Rentcorp (MGRC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.70B
Dividend Yield1.79%
Average Volume (3M)241.35K
Price to Earnings (P/E)25.1
Beta (1Y)0.69
Revenue Growth3.14%
EPS Growth-34.73%
CountryUS
Employees1,219
SectorIndustrials
Sector Strength72
IndustryRental & Leasing Services
Share Statistics
EPS (TTM)6.30
Shares Outstanding24,561,770
10 Day Avg. Volume150,468
30 Day Avg. Volume241,350
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 Cap1.20
Enterprise Value/Revenue3.42
Enterprise Value/Gross Profit7.44
Enterprise Value/Ebitda9.24
Forecast
1Y Price Target
$141.50Price Target Upside21.07% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
EPS Forecast (FY)6.37
Revenue Forecast (FY)$966.50M
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
MGRC makes money primarily by renting assets it owns to customers under contractual rental agreements and charging recurring rental fees for the duration of the rental term. Its key revenue streams are generated across its operating segments: (1) ...
Mcgrath Rentcorp Earnings Call Summary
Earnings Call Date:Apr 29, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Jul 23, 2026
Earnings Call Sentiment Neutral
The call reported modest company‑level revenue growth (+2%) and highlighted a strong quarter at TRS, positive pricing momentum at Mobile Modular, and deliberate capital deployment for growth (capex increase, acquisition, and share repurchases). However, those positives were offset by near‑term margin pressures (adjusted EBITDA down 1%), significant weakness at Enviroplex (sales down 51% and an EBITDA loss), compressed margins in portable storage, lower operating cash flow, and utilization declines driven by elevated returns. Management maintained full‑year guidance and emphasized balance sheet strength and vigilance on macro/geopolitical risks (Middle East conflict, higher energy costs). Overall, the results and commentary present a balanced picture of operational progress and notable headwinds.Positive Updates
Total Company Revenue Growth
Total revenues increased 2% year-over-year to $199 million for Q1 2026, with rental revenue growth across all divisions.
Negative Updates
Adjusted EBITDA Slight Decline
Total adjusted EBITDA decreased 1% year-over-year to $74 million, reflecting margin pressure despite revenue growth.
Read all updates
Q1-2026 Updates
Positive
Negative
Total Company Revenue Growth
Total revenues increased 2% year-over-year to $199 million for Q1 2026, with rental revenue growth across all divisions.
Read all positive updates
Company Guidance
McGrath reiterated full‑year 2026 guidance for total revenues of $945–$995 million, adjusted EBITDA of $360–$378 million, and gross rental equipment capital expenditures of $180–$200 million; for context, Q1 results were revenues of $199 million (up 2% YoY) and adjusted EBITDA of $74 million (down 1% YoY), net cash from operations of $42 million (vs. $54 million LY), rental equipment purchases of $45 million (vs. $12 million LY), net borrowings of $546 million and a funded‑debt-to‑LTM adjusted EBITDA ratio of ~1.51x, and the company returned $12 million in dividends and completed $12 million of share repurchases.Mcgrath Rentcorp Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
74
Positive
Cash Flow
70
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 947.36M | 944.24M | 910.94M | 831.84M | 635.66M | 616.83M |
| Gross Profit | 435.08M | 434.84M | 435.42M | 393.63M | 259.29M | 266.21M |
| EBITDA | 350.37M | 351.16M | 468.35M | 299.40M | 258.26M | 238.91M |
| Net Income | 155.13M | 156.31M | 231.73M | 174.62M | 115.14M | 89.70M |
Balance Sheet | ||||||
| Total Assets | 2.38B | 2.36B | 2.31B | 2.27B | 1.71B | 1.61B |
| Cash, Cash Equivalents and Short-Term Investments | 2.36M | 295.00K | 807.00K | 877.00K | 957.00K | 1.49M |
| Total Debt | 546.00M | 527.79M | 602.83M | 777.75M | 425.34M | 437.45M |
| Total Liabilities | 1.14B | 1.12B | 1.18B | 1.33B | 903.90M | 878.24M |
| Stockholders Equity | 1.24B | 1.24B | 1.12B | 933.80M | 803.95M | 732.02M |
Cash Flow | ||||||
| Free Cash Flow | 195.74M | 211.30M | 334.15M | -178.32M | -10.87M | 78.92M |
| Operating Cash Flow | 244.17M | 255.68M | 374.38M | 95.34M | 194.43M | 195.74M |
| Investing Cash Flow | -165.42M | -127.11M | -150.75M | -391.87M | -131.43M | -351.70M |
| Financing Cash Flow | -79.78M | -129.08M | -223.69M | 296.44M | -63.53M | 156.20M |
Mcgrath Rentcorp Technical Analysis
Negative
116.87
Price Trends
111.31
Negative
111.31
Negative
111.79
Negative
Market Momentum
-0.45
Positive
42.62
Neutral
17.69
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MGRC, the sentiment is Negative. The current price of 116.87 is above the 20-day moving average (MA) of 113.53, above the 50-day MA of 111.31, and above the 200-day MA of 111.79, indicating a bearish trend. The MACD of -0.45 indicates Positive momentum. The RSI at 42.62 is Neutral, neither overbought nor oversold. The STOCH value of 17.69 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MGRC.
Mcgrath Rentcorp Risk Analysis
Mcgrath Rentcorp disclosed 84 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 |
|---|---|---|---|---|---|---|---|
74 Outperform | $1.26B | 11.50 | 17.33% | 0.82% | 23.13% | 12.80% | |
71 Outperform | $9.08B | 21.79 | 16.39% | 1.75% | -0.07% | 4.18% | |
69 Neutral | $2.70B | 25.10 | 12.84% | 1.79% | 3.14% | -34.73% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
57 Neutral | $4.30B | 27.93 | -7.11% | 1.44% | -4.12% | -487.73% | |
56 Neutral | $4.43B | -34.53 | -0.26% | 1.79% | 28.39% | -105.83% | |
55 Neutral | $2.12B | -90.75 | -2.18% | ― | 9.38% | 43.77% |
* Industrials Sector Average
MGRC
Mcgrath Rentcorp
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CTOS
Custom Truck One Source
9.24
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111.44%
Mcgrath Rentcorp Corporate Events
Business Operations and StrategyPrivate Placements and Financing
McGrath RentCorp Expands and Extends Revolving Credit Facility
Positive
May 11, 2026
On May 8, 2026, McGrath RentCorp entered into a Third Amended and Restated Credit Agreement that refinances its prior $650 million facility and extends its revolving credit line to May 8, 2031. The new structure provides a $725 million senior revo...
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.