United Rentals (URI) AI Stock Analysis

• Market Cap: $37.28B
• Dividend Yield: 1.17%
• Average Volume (3M): 744.15K
• Price to Earnings (P/E): 14.8
• Beta (1Y): 1.72
• Revenue Growth: 7.07%
• EPS Growth: 9.56%
• Country: US
• Employees: 27,900
• Sector: Industrials
• Sector Strength: 65
• Industry: Rental & Leasing Services
• EPS (TTM): 38.74
• Shares Outstanding: 65,332,090
• 10 Day Avg. Volume: 928,241
• 30 Day Avg. Volume: 744,151
• PEG Ratio: 1.54
• Price to Book (P/B): N/A
• Price to Sales (P/S): 2.67
• Price to Cash Flow (P/CF): 9.80
• P/FCF Ratio: 9.80
• 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: $711.85
• Price Target Upside: 20.81% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 14

United Rentals presents a strong financial foundation with robust revenue growth and efficient operations, though moderate leverage needs monitoring. The technical indicators show some bearish trends, but the fair valuation and positive earnings call offset these concerns. Recent corporate events, including the decision not to pursue an acquisition and focus on shareholder returns, reinforce financial prudence.

Positive Factors

Financial Performance

URI’s ROIC has grown 3% to 13% over the last 3 years, with a significant contribution from Specialty.

Financial Stability

URI maintains a strong balance sheet and capex flexibility, which helps in navigating challenging market conditions.

Growth and Expansion

Specialty is emerging as URI’s secular growth engine and the rental penetration opportunity is massive.

Negative Factors

Market Challenges

GenRent will be an overhang in 2025, with fleet growth and productivity being pressured.

Market Environment

A softer supply/demand environment will pressure GenRent gross margins, making it difficult to pass on fleet inflation costs to customers.

Profitability Challenges

GenRent will be an overhang in 2025, still representing 60% of profits and facing pressures from non-residential construction spend flattening.

United Rentals Business Overview & Revenue Model

Company Description

United Rentals, Inc., through its subsidiaries, operates as an equipment rental company. It operates in two segments, General Rentals and Specialty. The General Rentals segment rents general construction and industrial equipment includes backhoes, skid-steer loaders, forklifts, earthmoving equipment, and material handling equipment; aerial work platforms, such as boom and scissor lifts; and general tools and light equipment comprising pressure washers, water pumps, and power tools for construction and industrial companies, manufacturers, utilities, municipalities, homeowners, and government entities. The specialty segment rents specialty construction products, including trench safety equipment consists of trench shields, aluminum hydraulic shoring systems, slide rails, crossing plates, construction lasers, and line testing equipment for underground work; power and heating, ventilating, and air conditioning equipment, such as portable diesel generators, electrical distribution equipment, and temperature control equipment; fluid solutions equipment for fluid containment, transfer, and treatment; and mobile storage equipment and modular office space. This segment serves construction companies involved in infrastructure projects, and municipalities and industrial companies. It also sells aerial lifts, reach forklifts, telehandlers, compressors, and generators; construction consumables, tools, small equipment, and safety supplies; and parts for equipment that is owned by its customers, as well as provides repair and maintenance services. The company sells used equipment through its sales force, brokers, website, directly to manufacturers, and at auctions. The company operates a network of 1,360 rental locations in the United States, Canada, Europe, Australia, and New Zealand. United Rentals, Inc. was incorporated in 1997 and is headquartered in Stamford, Connecticut.

How the Company Makes Money

United Rentals makes money primarily through the rental of equipment to various industries, including construction, industrial, and commercial sectors. The company's revenue model is based on leasing equipment to customers for short-term and long-term projects, which generates a steady income stream. Additionally, United Rentals sells new and used equipment, adding another revenue stream to its business model. The company also offers value-added services such as equipment repair, maintenance, and safety training, which contribute to its earnings. Strategic partnerships with equipment manufacturers and continuous expansion into new markets further enhance United Rentals' revenue potential.

United Rentals Financial Statement Overview

Summary

United Rentals demonstrates strong financial performance with robust revenue growth, impressive profit margins, and efficient cash flow management. However, moderate leverage suggests a need for cautious debt management.

Income Statement

United Rentals has demonstrated robust growth with a strong revenue growth rate of 7.06% from 2023 to 2024. The gross profit margin stands at 40.08%, and the net profit margin is healthy at 16.78%, indicating effective cost management and profitability. The EBIT margin of 26.49% and EBITDA margin of 29.43% further highlight its operational efficiency.

Balance Sheet

The company's debt-to-equity ratio is 1.68, reflecting moderate leverage, which is manageable but should be monitored. Return on Equity (ROE) is impressive at 29.86%, showcasing strong profitability relative to equity. The equity ratio of 30.60% indicates a balanced capital structure but leaves room for improvement in reducing liabilities.

Cash Flow

United Rentals has a solid cash flow position, with a significant free cash flow growth rate of 616.56% from 2023 to 2024, mainly due to low capital expenditures. The operating cash flow to net income ratio of 1.76 suggests efficient cash generation from operations. However, sustained free cash flow may be contingent on maintaining low capital expenditures.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
15.35B	14.33B	11.64B	9.72B	8.53B
	Gross Profit
6.15B	5.81B	5.00B	3.85B	3.18B
	EBIT
4.07B	3.83B	3.23B	2.28B	1.80B
	EBITDA
4.52B	6.63B	5.46B	2.64B	2.19B
	Net Income Common Stockholders
2.58B	2.42B	2.10B	1.39B	890.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
457.00M	363.00M	106.00M	144.00M	202.00M
	Total Assets
28.16B	25.59B	24.18B	20.29B	17.87B
	Total Debt
14.49B	12.66B	12.01B	10.31B	10.23B
	Net Debt
14.04B	12.30B	11.91B	10.16B	10.03B
	Total Liabilities
19.54B	17.46B	17.12B	14.30B	13.32B
	Stockholders Equity
8.62B	8.13B	7.06B	5.99B	4.54B
Cash Flow		Free Cash Flow
419.00M	634.00M	743.00M	491.00M	1.50B
	Operating Cash Flow
4.55B	4.70B	4.43B	3.69B	2.66B
	Investing Cash Flow
-4.15B	-2.98B	-5.02B	-3.61B	-223.00M
	Financing Cash Flow
-274.00M	-1.47B	552.00M	-140.00M	-2.29B

United Rentals Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 589.21
• 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 URI, the sentiment is Negative. The current price of 589.21 is below the 20-day moving average (MA) of 598.39, below the 50-day MA of 628.84, and below the 200-day MA of 728.52, indicating a bearish trend. The MACD of -14.66 indicates Negative momentum. The RSI at 46.04 is Neutral, neither overbought nor oversold. The STOCH value of 49.83 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for URI.

United Rentals Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TEX	78 Outperform	$2.25B	6.86	19.13%	2.03%	-0.47%	-34.74%
URI	76 Outperform	$37.28B	14.75	30.74%	1.17%	7.07%	9.56%
OSK	71 Outperform	$5.56B	8.31	17.34%	2.24%	11.36%	13.78%
HEES	70 Outperform	$3.27B	26.51	21.26%	1.23%	3.22%	-27.67%
Sector *	62 Neutral	$4.16B	11.31	5.46%	215.65%	4.12%	-8.47%
CMCO	61 Neutral	$387.70M	42.66	1.07%	2.16%	-2.02%	-80.76%
TITN	46 Neutral	$374.37M	11.08	-5.81%	―	-2.04%	-133.17%

United Rentals Corporate Events

United Rentals Receives Termination Fee After Merger Ends

On February 19, 2025, United Rentals, Inc. and its subsidiary UR Merger Sub VII Corporation withdrew their cash tender offer to purchase H&E Equipment Services, Inc. due to the termination of their merger agreement. As part of the termination, H&E will pay United Rentals a termination fee of over $63 million, and the bridge facility commitment letter associated with the merger has also been terminated.

United Rentals Ends Acquisition Pursuit, Resumes Buybacks

On February 18, 2025, United Rentals announced its decision not to pursue a revised acquisition proposal for H&E Equipment Services, opting instead to allow the merger agreement to be terminated following a superior offer received by H&E. This decision underlines United Rentals’ commitment to financial discipline and its strategy to focus on profitable growth and shareholder value. Subsequently, United Rentals will resume its share repurchase program, which is a key component of its capital return strategy, with $250 million remaining from its authorized $1.5 billion program.

United Rentals to Present at Global Tech Conference

On February 12, 2025, United Rentals announced its participation in Citi’s 2025 Global Industrial Tech and Mobility Conference on February 19, 2025. The company’s CEO Matt Flannery and CFO Ted Grace will present, potentially discussing the company’s business and prospects. This participation highlights United Rentals’ engagement with key industry stakeholders and its active role in the industrial tech and mobility sectors.

United Rentals Reports Record Q4 Results and 2025 Outlook

On January 29, 2025, United Rentals announced record financial results for the fourth quarter of 2024, with total revenue of $4.095 billion and a net income of $689 million. The company also introduced a 2025 outlook expecting continued growth, with projected revenues between $15.6 billion and $16.1 billion. United Rentals reported a 10% increase in quarterly dividends, reflecting strong shareholder returns. Despite challenges such as inflation and cost variability affecting margins, the company remains focused on profitable growth and strategic acquisitions, including the anticipated acquisition of H&E Equipment Services.