Mcgrath Rentcorp (MGRC) AI Stock Analysis

• Market Cap: $2.65B
• Dividend Yield: 1.84%
• Average Volume (3M): 122.15K
• Price to Earnings (P/E): 18.2
• Beta (1Y): 0.85
• 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: 151,540
• 30 Day Avg. Volume: 122,151
• 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: 1.30
• Enterprise Value/Revenue: 3.69
• Enterprise Value/Gross Profit: 7.79
• Enterprise Value/Ebitda: 10.20
• 1Y Price Target: $143.00
• Price Target Upside: 36.69% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): 6.19
• Revenue Forecast (FY): $949.31M

• Rating: 65 Neutral
• Price Target: $123.00 ▲(17.57% Upside)

McGrath Rentcorp's overall stock score reflects operational efficiency and a stable balance sheet, but is tempered by challenges in revenue growth and cash flow. The earnings call provides some optimism with upward financial outlook revisions, yet technical indicators suggest caution due to bearish trends.

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 liquid and solid containment tanks and boxes. The company operates through four segments: Mobile Modular, TRS-RenTelco, Adler Tanks, and Enviroplex. The Mobile Modular segment rents and sells modular buildings designed for use as classrooms, temporary offices adjacent to existing facilities, sales offices, construction field offices, restroom buildings, health care clinics, child care facilities, office spaces, and various other purposes; and portable storage containers. The TRS-RenTelco segment rents and sells general purpose electronic test equipment, such as oscilloscopes, amplifiers, analyzers, signal source, and power source test equipment primarily to aerospace, defense, electronics, industrial, research, and semiconductor industries. It also provides communications test equipment, including network and transmission test equipment for various fiber, copper, and wireless networks to the manufacturers of communications equipment and products, electrical and communications installation contractors, field technicians, and service providers. The Adler Tanks segment rents fixed axle steel tanks for storing groundwater, wastewater, volatile organic liquids, sewage, slurry and bio sludge, oil and water mixtures, and chemicals; vacuum containers for sludge and solid materials; dewatering boxes for the separation of water contained in sludge and slurry; and roll-off and trash boxes for temporary storage and transportation of solid waste. The Enviroplex segment manufactures and sells portable classrooms directly to public school districts and other educational institutions in California. The company was incorporated in 1979 and is headquartered in Livermore, California.

How the Company Makes Money

McGrath RentCorp generates revenue primarily through the rental of modular space and mobile storage units. The company operates on a rental model, charging customers on a monthly basis for the use of its products. Key revenue streams include long-term and short-term rentals, as well as ancillary services such as delivery, setup, and maintenance of the rental units. McGrath RentCorp also earns revenue from the sale of used equipment and containers. Significant partnerships with construction firms, educational institutions, and government agencies further contribute to the company's earnings, as these sectors often require reliable and scalable rental solutions for their projects.

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: Negative
• Last Price: 104.62
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: 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 104.62 is below the 20-day moving average (MA) of 113.72, below the 50-day MA of 117.18, and below the 200-day MA of 115.51, indicating a bearish trend. The MACD of -3.20 indicates Positive momentum. The RSI at 28.21 is Positive, neither overbought nor oversold. The STOCH value of 8.45 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MGRC.

Mcgrath Rentcorp Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MGRC	65 Neutral	$2.65B	18.22	12.70%	1.84%	4.77%	-35.44%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
HRI	63 Neutral	$4.53B	―	-4.05%	2.02%	19.40%	-120.47%
WLFC	62 Neutral	$842.98M	7.40	18.91%	0.84%	27.90%	19.25%
WSC	61 Neutral	$3.79B	34.74	9.82%	1.15%	-2.34%	-37.24%
R	61 Neutral	$6.77B	14.21	16.26%	1.97%	1.68%	9.91%
CTOS	53 Neutral	$1.33B	―	-3.00%	―	7.39%	34.57%

Mcgrath Rentcorp Corporate Events

McGrath Rentcorp’s Financial Stability at Risk Amid U.S. Trade Policy Changes

McGrath Rentcorp faces significant business risks due to changes in the U.S. trade environment, including the enactment of new tariffs and potential shifts in trade policies. These developments could lead to retaliatory tariffs from trading partners, reducing trade volume and economic activities globally, thereby affecting the company’s operations. The uncertainty surrounding these changes may cause customers to delay or reconsider projects, impacting McGrath Rentcorp’s business engagements and financial stability. Additionally, economic constraints on customers could impair their ability to make timely payments, further affecting the company’s financial condition and results of operations.

McGrath RentCorp’s Mixed Earnings Call Reveals Growth and Challenges

The recent earnings call for McGrath RentCorp painted a mixed picture of the company’s current financial health and future prospects. While there were notable areas of growth, particularly in the TRS-RenTelco segment, challenges such as decreased total revenue and adjusted EBITDA, as well as lower utilization rates in the Mobile Modular segment, tempered the overall sentiment. Despite these hurdles, the upward revision of the financial outlook and strong funding in the education sector provide a positive outlook for the future.

McGrath RentCorp Reports Mixed Q3 2025 Results

McGrath RentCorp is a prominent North American business-to-business rental company, specializing in modular solutions and electronic test equipment rentals, with a focus on sustainable practices and customer satisfaction. In its third-quarter earnings report for 2025, McGrath RentCorp revealed a total revenue of $256.4 million, marking a 4% decrease from the previous year, alongside a net income of $42.3 million, significantly lower than the $149.3 million reported in the same quarter of 2024. The company’s rental operations saw a 4% increase in revenue to $178.1 million, while sales revenues fell by 18% to $76.1 million. Additionally, the adjusted EBITDA decreased by 7% to $96.5 million. Despite these challenges, McGrath’s modular rental revenues grew by 2%, and the TRS-RenTelco division experienced a 9% increase in rental revenues, indicating a positive trend in market demand. Looking ahead, McGrath RentCorp remains optimistic about its business momentum as it enters the fourth quarter, focusing on aligning capital spending with market conditions and expanding its modular services offerings.

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.

The most recent analyst rating on (MGRC) stock is a Buy with a $136.00 price target. To see the full list of analyst forecasts on Mcgrath Rentcorp stock, see the MGRC Stock Forecast page.

McGrath Rentcorp Faces Financial Risks Amid U.S. Trade and Economic Uncertainties

McGrath Rentcorp faces potential risks due to changes in the U.S. trade environment, including new and proposed tariffs, and geopolitical economic uncertainties. These changes could lead to retaliatory tariffs from trading partners, reducing trade volume and affecting global economic stability. Such developments may cause customers to delay or reconsider projects, impacting McGrath Rentcorp’s business engagements and financial performance. Additionally, economic challenges could constrain customers’ budgets, affecting their ability to make timely payments, thereby adversely impacting McGrath Rentcorp’s financial condition and operational results.