Mcgrath Rentcorp (MGRC) AI Stock Analysis

• Market Cap: $2.63B
• Dividend Yield: 1.77%
• Average Volume (3M): 154.88K
• Price to Earnings (P/E): 11.4
• Beta (1Y): 0.79
• Revenue Growth: 9.51%
• EPS Growth: 104.30%
• Country: US
• Employees: 1,219
• Sector: Industrials
• Sector Strength: 68
• Industry: Rental & Leasing Services
• EPS (TTM): 9.43
• Shares Outstanding: 24,551,184
• 10 Day Avg. Volume: 140,165
• 30 Day Avg. Volume: 154,883
• PEG Ratio: 0.11
• Price to Book (P/B): N/A
• Price to Sales (P/S): 3.06
• Price to Cash Flow (P/CF): 18.90
• P/FCF Ratio: 16.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $135.00
• Price Target Upside: 28.42% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

McGrath Rentcorp demonstrates strengths in financial performance with robust revenue growth and effective cash flow management. While technical analysis presents mixed signals, the company's valuation appears fair, and the earnings call reflects a positive outlook tempered by some revenue challenges. The strategic promotion of a new COO aligns with the company's growth strategy, adding confidence to its operational leadership.

Mcgrath Rentcorp Business Overview & Revenue Model

Company Description

McGrath RentCorp (MGRC) is a diversified business-to-business rental company operating in various sectors including modular buildings, electronic test equipment, portable storage containers, and liquid and solid containment tanks and boxes. The company's core services involve providing flexible rental solutions and quality equipment to a broad range of industries such as education, construction, telecommunications, manufacturing, and environmental services. By offering a wide array of products, McGrath RentCorp is able to cater to the specific needs and demands of its diverse client base.

How the Company Makes Money

McGrath RentCorp generates revenue primarily through the rental and sales of its modular buildings, electronic test equipment, and storage containers. Its revenue model is based on engaging in long-term and short-term lease agreements with businesses that require temporary or semi-permanent space solutions, technical equipment, or storage capabilities. The company also earns money through sales of new and used equipment and providing additional services such as delivery, installation, and maintenance. Key revenue streams include the modular division, which serves schools and businesses needing temporary classrooms or office spaces; the electronics division, offering test equipment to technology and telecom companies; and the portable storage and tank divisions, supplying containers and liquid containment solutions across various industries. Strategic partnerships with other companies in these markets and a focus on customer service and satisfaction help McGrath RentCorp maintain and grow its revenue base.

Mcgrath Rentcorp Financial Statement Overview

Summary

McGrath Rentcorp shows strong financial performance with robust revenue growth, improved profitability margins, and effective cash flow management. The balance sheet is sound with a healthy equity ratio and controlled leverage, and the company excels in converting income into cash flow, enhancing its financial stability and growth prospects.

Income Statement

Mcgrath Rentcorp has shown consistent revenue growth with a strong revenue growth rate of 9.5% annually from 2023 to 2024. The gross profit margin is robust at 47.8%, and the net profit margin improved to 25.4% in 2024, indicating efficient cost management and profitability. Both EBIT and EBITDA margins are solid, reflecting strong operational performance.

Balance Sheet

The company's balance sheet reveals a moderate debt-to-equity ratio of 0.53, indicating a balanced approach to leveraging. The return on equity (ROE) is strong at 20.6%, showcasing efficient use of shareholders' equity to generate profits. The equity ratio stands at 49.3%, suggesting a solid equity base to support its assets.

Cash Flow

Mcgrath Rentcorp demonstrates significant improvement in cash flow management with a remarkable free cash flow growth rate, turning from a deficit to a positive $334 million in 2024. The operating cash flow to net income ratio is 1.62, and the free cash flow to net income ratio is 1.44, indicative of strong cash generation relative to net income.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
910.94M	831.84M	733.82M	616.83M	572.55M
	Gross Profit
435.42M	393.63M	336.91M	281.02M	263.75M
	EBIT
244.26M	189.71M	165.57M	132.42M	140.75M
	EBITDA
468.35M	299.40M	276.91M	239.12M	235.40M
	Net Income Common Stockholders
231.73M	174.62M	115.14M	89.70M	101.98M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
807.00K	877.00K	957.00K	1.49M	1.24M
	Total Assets
2.28B	2.22B	1.71B	1.60B	1.28B
	Total Debt
590.21M	762.98M	413.74M	426.45M	222.75M
	Net Debt
589.40M	762.10M	412.79M	424.96M	221.52M
	Total Liabilities
1.15B	1.28B	903.90M	863.90M	593.14M
	Stockholders Equity
1.12B	933.80M	803.95M	732.02M	682.60M
Cash Flow		Free Cash Flow
334.15M	-178.32M	-10.87M	78.92M	80.45M
	Operating Cash Flow
374.38M	95.34M	194.43M	195.74M	180.50M
	Investing Cash Flow
-150.75M	-391.87M	-131.43M	-351.70M	-53.00M
	Financing Cash Flow
-223.69M	296.44M	-63.53M	156.20M	-128.45M

Mcgrath Rentcorp Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 105.12
• 50DMA: Negative
• 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 Negative. The current price of 105.12 is below the 20-day moving average (MA) of 113.08, below the 50-day MA of 118.61, and below the 200-day MA of 111.98, indicating a bearish trend. The MACD of -1.39 indicates Negative momentum. The RSI at 41.78 is Neutral, neither overbought nor oversold. The STOCH value of 28.21 is Neutral, 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
TEX	78 Outperform	$2.38B	7.23	19.13%	1.90%	-0.47%	-34.74%
AL	76 Outperform	$5.04B	13.57	5.82%	1.91%	2.65%	-35.24%
MGRC	75 Outperform	$2.63B	11.36	22.53%	1.77%	9.51%	104.30%
URI	75 Outperform	$38.62B	15.28	30.74%	1.13%	7.07%	9.56%
HEES	70 Outperform	$3.45B	27.95	21.26%	1.17%	3.22%	-27.67%
Sector *	62 Neutral	$8.08B	13.63	3.82%	3.13%	3.58%	-14.35%
CAR	49 Neutral	$2.56B	8.26	78.26%	―	-1.82%	-219.91%

Mcgrath Rentcorp Corporate Events

McGrath RentCorp Appoints New Senior VP & CAO

On January 13, 2025, McGrath RentCorp’s Board of Directors appointed David M. Whitney as Senior Vice President, Chief Accounting Officer. Whitney, who joined the company in 2000 and served as Vice President, Principal Accounting Officer since 2006, brings extensive experience from his previous roles, including at The Permanente Medical Group.

McGrath RentCorp Promotes Hawkins to Chief Operating Officer

On January 13, 2025, McGrath RentCorp appointed Philip B. Hawkins as the Chief Operating Officer, effective immediately. Hawkins, who has been with the company for over 20 years, has held various leadership roles, most recently as Senior Vice President and Division Manager of Mobile Modular. His promotion is expected to enhance McGrath’s operational leadership as he oversees the Mobile Modular businesses and contributes to the company’s growth strategy. McGrath’s focus on modular solutions and Hawkins’ extensive experience positions the company to expand its market presence and operational efficiencies.