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United Rentals (URI)
NYSE:URI
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United Rentals
(NYSE:URI)
Rating:80Outperform
Price Target:
$794.00
▲(13.99%Upside)
Positive Factors
Market Share
Management showcased its ability to drive outsized market share gains through leveraging the scale of its industry-leading fleet size and its differentiated one-stop-shop portfolio, including high-value niche Specialty offerings.
Revenue Growth
URI's outsized customer mix to larger National Accounts fueled by secular mega-project activity should support more resilient rental revenue growth and fleet dynamics vs. its largest peers.
Negative Factors
Gross Margins
A softer supply/demand environment will also pressure GenRent gross margins, making it difficult to pass on fleet inflation costs to customers.
Productivity Pressure
GenRent will be an overhang in 2025, with fleet growth and productivity being pressured.
United Rentals (URI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$45.69B
Dividend Yield0.97%
Average Volume (3M)579.52K
Price to Earnings (P/E)18.2
Beta (1Y)1.67
Revenue Growth7.20%
EPS Growth4.56%
CountryUS
Employees27,900
SectorIndustrials
Sector Strength94
IndustryRental & Leasing Services
Share Statistics
EPS (TTM)8.86
Shares Outstanding64,999,040
10 Day Avg. Volume391,366
30 Day Avg. Volume579,520
Financial Highlights & Ratios
PEG Ratio-47.69
Price to Book (P/B)5.00
Price to Sales (P/S)0.00
P/FCF Ratio68.40
Enterprise Value/Market Cap1.25
Enterprise Value/Revenue0.94
Enterprise Value/Gross Profit9.45
Enterprise Value/Ebitda2.16
Forecast
1Y Price Target
$735.90Price Target Upside5.65% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering12
United Rentals Business Overview & Revenue Model
Company DescriptionUnited Rentals, Inc. (NYSE: URI) is the largest equipment rental company in the world, serving a diverse customer base across various industries, including construction, industrial, utilities, and government sectors. The company offers a vast fleet of rental equipment, including general construction and industrial equipment, aerial work platforms, earthmoving machinery, and power and HVAC systems, among others. United Rentals operates an extensive network of locations across the United States, Canada, and Europe, providing customers with convenient access to equipment and services to meet their project needs.
How the Company Makes MoneyUnited Rentals generates revenue primarily through the rental of equipment, which accounts for the majority of its income. The company leases a wide variety of equipment on both short-term and long-term contracts, catering to industries such as construction, manufacturing, and energy. Additionally, United Rentals offers complementary services that contribute to its earnings, including equipment sales, maintenance and repair services, and safety training programs. The company also benefits from strategic partnerships with equipment manufacturers and suppliers, which enhance its product offerings and operational efficiency. Furthermore, United Rentals continually invests in technology and innovation to improve customer service and operational processes, which supports its revenue growth.
United Rentals Key Performance Indicators (KPIs)
Any
Rental Revenue by Type
Shows the revenue generated from different types of rental equipment, highlighting which categories drive the most income and indicating demand trends in various sectors.
Shows the revenue generated from different types of rental equipment, highlighting which categories drive the most income and indicating demand trends in various sectors.
Data provided by:
Main Street Data
Main Street DataUnited Rentals Earnings Call Summary
Earnings Call Date:Apr 23, 2025
(Q1-2025)
| % Change Since: 18.51%|
Next Earnings Date:Jul 23, 2025
Earnings Call Sentiment Positive
The earnings call reflects a strong start to 2025 with record-breaking revenues and growth in specialty segments, robust free cash flow, and a solid balance sheet allowing for significant capital returns. However, margin compression due to cost pressures and the impact of the H&E deal termination presents challenges. Overall, positives such as revenue growth and cash flow outweigh the negatives, indicating a largely positive outlook.Q1-2025 Updates
Positive Updates
Record-Breaking Revenue and Growth
United Rentals reported a total revenue growth of 6.7% year over year to $3.7 billion and rental revenue grew by 7.4% to $3.1 billion, marking first quarter records.
Strong Specialty Segment Performance
Specialty rental revenue grew 22% year over year and 15% pro forma for acquisitions, with eight specialty cold starts opened in the first quarter and plans to open at least 50 this year.
Robust Free Cash Flow
The company generated nearly $1.1 billion in free cash flow, setting the stage for another year of strong cash generation.
Solid Balance Sheet and Capital Returns
Net leverage remains low at 1.7x, with $368 million returned to shareholders in the first quarter through dividends and share repurchases. A new $1.5 billion share repurchase program has been approved.
Used Equipment Market Strength
A first-quarter record of over $740 million in original equipment cost (OEC) was sold, with the company on track to sell an estimated $2.8 billion of fleet this year.
Negative Updates
Margin Compression
EBITDA margin compressed by 150 basis points year over year, influenced by factors including ancillary revenue growth outpacing core rental growth and higher delivery costs.
Impact of H&E Deal Termination
The termination of the H&E deal created a net pre-tax benefit of $39 million, but also involved $13 million in bridge financing fees.
Cost Pressures and Fleet Repositioning
Increased delivery and repositioning costs impacted margins by about 30 basis points, reflecting choices between costs and capital efficiency.
Company Guidance
During the United Rentals investor conference call, the company reported first quarter records across several key financial metrics, indicating a strong start to fiscal year 2025. Total revenue grew by 6.7% year over year to $3.7 billion, with rental revenue increasing by 7.4% to $3.1 billion. Fleet productivity rose to 3.1%, contributing to an adjusted EBITDA of $1.7 billion, which translates to a margin of nearly 45%. Adjusted EPS reached $8.86. Specialty rental revenue saw a significant year-over-year growth of 22%. The company also recorded over $740 million in OEC sales. Free cash flow was substantial at nearly $1.1 billion, reinforcing United Rentals' commitment to shareholder value through capital returns, including a new $1.5 billion share repurchase program. The call highlighted confidence in maintaining 2025 guidance amidst macroeconomic uncertainties, emphasizing strategic growth and customer partnership as key drivers of long-term success.United Rentals Financial Statement Overview
Summary
United Rentals exhibits strong financial performance with robust profitability metrics, efficient operations, and effective cash flow management. While the company shows healthy growth and a stable capital structure, the relatively high debt levels and decline in free cash flow growth are areas to watch.Income Statement
United Rentals demonstrates a strong income statement with robust gross and net profit margins, indicating efficient operations and solid profitability. The TTM (Trailing-Twelve-Months) gross profit margin is 38.84%, and the net profit margin is 16.37%, both suggesting a well-managed cost structure. The revenue growth rate from 2024 to TTM is moderate at 1.53%, showing consistent expansion, although slightly lower than previous years. The EBIT margin of 25.79% and EBITDA margin of 37.10% also reflect strong operational efficiency. Overall, the income statement shows solid profitability with stable growth trends.85
Very Positive
Balance Sheet
The balance sheet presents a solid equity base with a moderate equity ratio of 31.33% TTM, indicating a stable capital structure. The debt-to-equity ratio is relatively high at 1.59, suggesting the company is leveraging debt to fuel its operations, which could pose risks if market conditions change. Return on Equity (ROE) is strong at 29.02%, reflecting efficient use of equity capital to generate profits. Overall, the balance sheet points to a well-capitalized company, albeit with a notable reliance on debt.78
Positive
Cash Flow
United Rentals exhibits strong cash flow management, with a healthy operating cash flow to net income ratio of 1.94 TTM, demonstrating robust cash generation from operations. The free cash flow to net income ratio is 0.54, indicating effective capital expenditure management. However, the free cash flow growth rate shows a decline of 66.97% from 2024 to TTM, which warrants monitoring. Despite this decline, the company maintains a solid cash position and effective cash utilization strategies.82
Very Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 15.58B | 15.35B | 14.33B | 11.64B | 9.72B | 8.53B | Gross Profit |
| 6.05B | 6.15B | 5.81B | 5.00B | 3.85B | 3.18B | EBIT |
| 4.02B | 4.07B | 3.83B | 3.23B | 2.28B | 1.80B | EBITDA |
| 6.42B | 6.98B | 6.63B | 5.46B | 2.64B | 2.19B | Net Income Common Stockholders |
| 2.55B | 2.58B | 2.42B | 2.10B | 1.39B | 890.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 542.00M | 457.00M | 363.00M | 106.00M | 144.00M | 202.00M | Total Assets |
| 28.05B | 28.16B | 25.59B | 24.18B | 20.29B | 17.87B | Total Debt |
| 13.99B | 14.79B | 12.66B | 12.01B | 10.31B | 10.23B | Net Debt |
| 13.45B | 14.33B | 12.30B | 11.91B | 10.16B | 10.03B | Total Liabilities |
| 19.26B | 19.54B | 17.46B | 17.12B | 14.30B | 13.32B | Stockholders Equity |
| 8.79B | 8.62B | 8.13B | 7.06B | 5.99B | 4.54B |
| Cash Flow | Free Cash Flow | ||||
| 639.00M | 419.00M | 634.00M | 743.00M | 491.00M | 1.50B | Operating Cash Flow |
| 4.94B | 4.55B | 4.70B | 4.43B | 3.69B | 2.66B | Investing Cash Flow |
| -3.23B | -4.15B | -2.98B | -5.02B | -3.61B | -223.00M | Financing Cash Flow |
| -1.58B | -274.00M | -1.47B | 552.00M | -140.00M | -2.29B |
United Rentals Technical Analysis
Neutral
696.57
Price Trends
648.34
Positive
669.19
Positive
724.65
Negative
Market Momentum
14.93
Positive
53.94
Neutral
36.26
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For URI, the sentiment is Neutral. The current price of 696.57 is below the 20-day moving average (MA) of 702.72, above the 50-day MA of 648.34, and below the 200-day MA of 724.65, indicating a neutral trend. The MACD of 14.93 indicates Positive momentum. The RSI at 53.94 is Neutral, neither overbought nor oversold. The STOCH value of 36.26 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for URI.
United Rentals Risk Analysis
United Rentals disclosed 40 risk factors in its most recent earnings report. United Rentals 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 3 New Risks
1.
Our financial performance and our reputation could be adversely affected, and we could be subject to legal liability or regulatory enforcement actions, if we are unable to protect against, or effectively respond to, cyberattacks or other cyber incidents. Q4, 2024
2.
Changes to income tax laws or regulations in the U.S. and other jurisdictions where we operate could increase our tax liability and adversely impact our financial results. Q4, 2024
3.
Failure to comply with data privacy and protection laws and regulations could subject us to legal liability and adversely affect our reputation and our financial performance. Q4, 2024
United Rentals Peers Comparison
Overall Rating
UnderperformOutperform
Sector (66)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $45.69B | 18.20 | 30.17% | 0.97% | 7.20% | 4.56% | |
79 Outperform | $2.86B | 12.05 | 22.80% | 1.64% | 7.31% | 91.99% | |
71 Outperform | $6.22B | 13.15 | 16.41% | 2.15% | 6.21% | 47.05% | |
66 Neutral | $4.01B | 26.90 | 9.60% | 2.26% | 8.34% | -63.02% | |
66 Neutral | $4.48B | 12.24 | 5.32% | 248.54% | 4.09% | -12.10% | |
56 Neutral | $3.47B | 38.00 | 15.74% | 1.16% | -3.52% | -46.60% | |
49 Neutral | $4.85B | ― | -33.58% | ― | 4.27% | -120.11% |
* Industrials Sector Average
Performance Comparison
URI
United Rentals
696.57
71.74
11.48%
HEES
H&E Equipment Services
94.64
50.24
113.15%
HRI
Herc Holdings
119.43
-12.59
-9.54%
MGRC
Mcgrath Rentcorp
113.99
9.21
8.79%
R
Ryder System
148.61
30.78
26.12%
PONY
Pony AI Inc. Sponsored ADR
13.14
0.12
0.92%
United Rentals Corporate Events
Executive/Board ChangesShareholder Meetings
United Rentals Holds Annual Meeting, Elects Board
Neutral
May 8, 2025
On May 8, 2025, United Rentals held its Annual Meeting where stockholders voted on several key issues. They elected ten directors to the board, ratified Ernst & Young LLP as the public accounting firm for the fiscal year ending December 31, 2025, approved executive compensation on a non-binding basis, and rejected a proposal to improve shareholder written consent.
Stock BuybackBusiness Operations and StrategyFinancial Disclosures
United Rentals Announces Q1 2025 Results and Buyback
Positive
Apr 23, 2025
On April 23, 2025, United Rentals announced its first quarter 2025 financial results, reaffirmed its full-year guidance, and introduced a new $1.5 billion share repurchase program. The company reported a total revenue of $3.719 billion, with a net income of $518 million and an adjusted EBITDA of $1.671 billion. Despite a decrease in net income margin, the company saw a 7.4% increase in rental revenue year-over-year, driven by demand across its end-markets and the impact of the Yak acquisition. United Rentals plans to repurchase $1.25 billion in shares in 2025, reflecting its strategy to capitalize on growth opportunities and differentiate from competitors.
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.