McGrath RentCorp

McGrath RentCorp (MGRC) Market Cap

McGrath RentCorp has a market capitalization of —.

No quote data available.

CEO: Philip Hawkins

Sector: Industrials

Industry: Rental & Leasing Services

IPO Date: 1984-11-13

Website: https://www.mgrc.com

McGrath RentCorp (MGRC) - Company Information

Market Cap: -|Sector: Industrials

Company Profile

McGrath RentCorp (MGRC) operates as a diversified business-to-business provider of rental solutions, serving clients across the United States and internationally. Its primary offerings encompass a range of temporary infrastructure and specialized equipment, including versatile modular structures, portable storage units, advanced electronic testing apparatus, and various liquid and solid containment solutions. The company's operations are divided into four distinct segments: Mobile Modular, TRS-RenTelco, Adler Tanks, and Enviroplex. Mobile Modular specializes in the rental and sale of adaptable modular buildings and portable storage containers. These structures cater to diverse applications such as educational facilities, temporary workplaces, sales outposts, construction site offices, healthcare clinics, and more. TRS-RenTelco focuses on providing (renting and selling) advanced electronic test and measurement equipment. This includes general-purpose instruments like oscilloscopes, amplifiers, and analyzers, primarily catering to the aerospace, defense, electronics, industrial, research, and semiconductor sectors. Additionally, it supplies specialized communication test gear for fiber, copper, and wireless networks, serving equipment manufacturers, installation contractors, field technicians, and communication service providers. Adler Tanks offers rental solutions for various containment needs. Its inventory comprises robust fixed-axle steel tanks for liquids such as groundwater, wastewater, hazardous organic compounds, sewage, and chemical mixtures. The segment also supplies vacuum containers for sludges and solids, dewatering boxes designed to separate liquids from sludge and slurry, and roll-off/trash containers for the interim storage and transport of solid waste. Enviroplex stands out by manufacturing and directly selling portable classroom facilities. Its clientele primarily consists of public school districts and other educational bodies within California. Established in 1979, McGrath RentCorp maintains its headquarters in Livermore, California.

Analyst Sentiment

94%
Strong Buy

From 3 Active Polls

1Y Forecast: $140.00

▲ +0.0% Potential Upside

Consensus Target Metrics

Low Bound

$140

Median

$140

High Bound

$140

Average

$140

Price & Moving Averages

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🎯 Wall Street Analyst Intelligence Report

1-Year structural target targets, chart projections, and sentiment maps.

Average 1Y Target
$140.00
▲ +21.58% Upside
Low Target
$140.00
22% Risk
Median Target
$140.00
22% Mid
High Target
$140.00
22% Max

Consensus Trend Projection

Trailing closures vs. 12-month metrics map.

Analyst Vote Distribution

Aggregate institutional coverage sentiment weights.

Sentiment volume allocation data unavailable.

valuation & financial ratiosdetailed financials

Historical valuation matrix unavailable.

📘 Full Research Report

ℹ️

AI-Generated Research: This report is for informational purposes only.

📘 MCGRATH RENT (MGRC) — Investment Overview

🧩 Business Model Overview

McGrath RentCorp rents and services a diversified set of equipment used primarily in construction, industrial maintenance, and facility-related work. The value chain is built around maintaining a large, ready-to-deploy fleet; staffing local branches and technicians; and converting customer demand into rentable “time on equipment” through scheduling, delivery, and turnaround support.

Revenue is generated through day-/week-/project-based rentals, supported by in-house maintenance and a supply chain for parts and repairs. The business model benefits from local execution—fast delivery, consistent availability, and service coverage—making it easier for contractors and industrial customers to meet job timelines with fewer scheduling disruptions.

💰 Revenue Streams & Monetisation Model

The monetisation model is primarily transactional rental revenue driven by equipment utilization, contracted/project usage patterns, and fleet mix (aerial lifts, compactors, specialty tools, and other categories depending on market needs). Monetisation is complemented by service and ancillary revenue including maintenance, repairs, and related charges.

Primary margin drivers include:

  • Fleet utilization and pricing discipline (ability to match fleet capacity to demand while maintaining favorable rates).
  • Depreciation management (residual value outcomes on owned equipment).
  • Maintenance productivity (parts cost control, technician efficiency, and uptime).
  • Branch-level operating leverage (spreading fixed labor and overhead across greater rental volume).

Rental economics tend to be sensitive to demand cycles, but profitability can be supported through fleet discipline, maintenance execution, and a focus on equipment categories with steadier utilization characteristics.

🧠 Competitive Advantages & Market Positioning

MCGRATH RENT’s moat is best described as a combination of switching costs and operational scale in local markets rather than a technological barrier.

  • Switching costs (operational): Customers rely on predictable availability, delivery speed, and service responsiveness. When an equipment provider becomes embedded in project planning and maintenance workflows, switching increases operational risk and coordination effort.
  • Economies of fleet ownership and maintenance: Owned equipment, standardized maintenance processes, and technician bench depth improve uptime and reduce total cost per rental day.
  • Local market execution: Dense branch presence and logistics capability reduce downtime for customers and support higher service levels.

Competitive benchmarking:

  • United Rentals (URI): Large-scale national player with broad category coverage; competes on scale, fleet depth, and deployment flexibility.
  • Sunbelt Rentals (operated by Ashtead, though branded as Sunbelt): Strong equipment breadth and service footprint, competing heavily on availability and managed logistics.
  • Herc Rentals (HRI): Regional/national mix; competes across construction and industrial end markets.

Positioning contrast: MCGRATH RENT generally focuses on a more targeted footprint and relationship-driven execution, where customers value rapid response and consistent equipment readiness. While large peers possess advantages in fleet breadth and national procurement, McGrath’s competitive strength is rooted in local service levels and customer-specific delivery/maintenance reliability.

🚀 Multi-Year Growth Drivers

Growth over a 5–10 year horizon is supported by secular and cyclical demand fundamentals:

  • Infrastructure and nonresidential construction: Equipment rental is a key enabler of project execution; increased capital spending typically supports fleet utilization and rental days.
  • Industrial maintenance and reliability spending: Maintenance-heavy end markets tend to require dependable equipment availability, supporting recurring rental demand patterns.
  • Replacement and modernization cycles: As projects shift toward higher-output equipment and safety-focused configurations, rental fleets require continuous reinvestment and upgrades.
  • Share gain through service quality: In fragmented local markets, strong delivery and maintenance performance can attract customers from underperforming suppliers.
  • Fleet growth with disciplined capital allocation: Expanding fleet in the right categories and maintaining residual value discipline can compound earnings power through higher utilization and improved depreciation outcomes.

⚠ Risk Factors to Monitor

  • Construction and industrial demand cyclicality: Equipment rental is exposed to swings in project activity and customer capex behavior.
  • Fleet residual value and depreciation risk: Used equipment pricing can impact depreciation expense and realized gains/losses on disposals.
  • Interest rate and financing sensitivity: Fleet-heavy businesses rely on capital markets and equipment financing; higher cost of capital can pressure returns.
  • Competitive pricing pressure: Overcapacity in fleets across the industry can lead to rate compression and less favorable utilization economics.
  • Operational and safety/regulatory exposure: Equipment rental carries safety obligations; incidents can drive direct costs and reputational/insurance impacts.
  • Workforce and maintenance throughput: Maintaining uptime depends on effective hiring, training, and parts sourcing; disruptions can reduce service levels.

📊 Valuation & Market View

In equipment rental, the market typically values the business on EV/EBITDA and cash flow quality, reflecting the fleet-intensive nature of earnings. Key valuation drivers include:

  • Utilization and pricing power (rental revenue per day and the ability to defend rates).
  • Fleet turn and residual value assumptions (how efficiently capital converts into durable earnings).
  • Maintenance and uptime performance (cost control and reduction of downtime).
  • Capital efficiency (fleet growth pace relative to demand and returns on incremental investment).
  • Leverage and liquidity (ability to finance fleet and manage downturn risk).

Multiple expansion tends to occur when the market sees durable utilization, improved maintenance economics, and prudent fleet/residual value management; multiple compression is common when utilization weakens or residual value assumptions deteriorate.

🔍 Investment Takeaway

MCGRATH RENT’s long-term case rests on a durable local-service advantage in a fleet-driven industry. The company’s practical moat is anchored in customer switching costs arising from delivery reliability and equipment uptime, reinforced by operational expertise in maintenance and fleet management. Sustained performance depends on capital discipline, residual value outcomes, and maintaining utilization through service differentiation—factors that can support steady compounding across a construction-and-industrial cycle.


⚠ AI-generated — informational only. Validate using filings before investing.

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📊 AI Financial Analysis

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Earnings Data: Q Ending 2026-06-30

"MGRC reported Q2’26 revenue of $221.1M and net income of $33.7M (EPS $1.38). On a YoY basis, revenue rose from $235.6M in Q2’25 to $221.1M in Q2’26 (down ~6.1%), while net income increased from $35.97M to $33.67M (down ~6.4%). QoQ, revenue grew from $198.5M in Q1’26 to $221.1M in Q2’26 (+~11.4%), and net income increased from $27.0M to $33.7M (+~24.5%). Profitability was mixed: gross margin expanded to ~48.8% in Q2’26 from ~46.2% in Q1’26 (QoQ) but was slightly below Q2’25 (~44.9%). Operating margin improved QoQ to ~24.1% (from ~21.9%) but net margin declined YoY to ~15.2% (from ~15.3%). Operating cash flow was strong at $63.3M, supporting free cash flow of ~$52.0M, even as share repurchases and dividends continued (dividends paid ~$12.2M; buybacks ~$15.5M). Total shareholder returns appear supportive: shares are up ~10.9% over the last year, with a small dividend yield (~0.41%). Leverage remains meaningful with net debt ~ $586M, but interest coverage stays solid (~7.5x). Valuation is optically rich (price/earnings ~21.9x), so continued execution on margins is key."

Revenue Growth

Fair

Revenue declined ~6.1% YoY (Q2’26: $221.1M vs Q2’25: $235.6M) but rose ~11.4% QoQ (vs Q1’26: $198.5M), indicating intermittent momentum rather than a clear YoY uptrend.

Profitability

Neutral

Net margin slipped slightly YoY (~15.2% vs ~15.3%) but improved QoQ (from ~13.6%). Operating margin also improved QoQ to ~24.1% from ~21.9%, supporting better profitability in the latest quarter.

Cash Flow Quality

Positive

Operating cash flow was $63.3M and free cash flow ~$52.0M in Q2’26. Cash generation comfortably supported dividends (~$12.2M) and buybacks (~$15.5M), suggesting solid earnings-to-cash conversion.

Leverage & Balance Sheet

Fair

Leverage is non-trivial: net debt ~ $585.5M and long-term debt ~$589.9M. However, equity is substantial (~$1.25B) and interest coverage remains healthy (~7.5x), indicating resilience.

Shareholder Returns

Neutral

Total return is moderately positive: stock is up ~10.9% over 1 year and dividend yield is ~0.41%. Repurchases (Q2’26 buybacks ~$15.5M) add support, though momentum is not >20%.

Analyst Sentiment & Valuation

Neutral

Consensus price target is $140 vs current price ~$116.87 (upside implied), but valuation appears elevated (P/E ~21.9x, price-to-sales ~13.4x), making the multiple sensitive to margin continuation.

Disclaimer:This analysis is AI-generated for informational purposes only. Accuracy is not guaranteed and this does not constitute financial advice.

RevenueEarningsP/E RatioSharesDebtMargin %

Fundamentals Overview

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MGRC delivered mixed fundamentals in Q2 2026: rental momentum offset a sharp decline in equipment sales. Total revenue fell 6% to $221M and adjusted EBITDA fell 4% to $83M, driven by Enviroplex timing and weaker new sales. The key positive is Mobile Modular’s utilization inflection—sequentially improving for the first time since 2022, with shipments exceeding returns for the past four months and units on rent increasing steadily. TRS RenTelco strongly accelerated with rental revenue up 17% Y/Y, rental margins +400 bps to 48%, utilization up to 68.1%, and sales gross margin expanding to 66%. The main headwind remains Portable Storage: rental margins compressed 300 bps to 80% and adjusted EBITDA fell 23% Y/Y, tied to competitive local commercial construction conditions. Full-year guidance was held: revenue $955M-$985M, adj. EBITDA $363M-$375M, and capex $200M-$220M.

AI IconGrowth Catalysts

  • Mobile Modular rental momentum: rental revenues +2% Y/Y and bookings +11% Y/Y
  • Mobile Modular utilization inflection: sequential utilization improvement; units on rent increased 4 straight months; more units on rent at quarter-end vs start of year
  • TRS RenTelco acceleration: rental revenues +17% Y/Y driven by strength in data centers, aerospace/defense, and semiconductors
  • Expansion/geographic coverage initiative supporting rental growth and site-related service penetration
  • Mobile Modular Plus services momentum: revenues increased to $10.5M from $9.2M Y/Y; services expansion into new add-ons (e.g., cell phone, janitorial, air care/filter programs)

Business Development

  • Mega/duration data center projects described as a meaningful component of new business volume; not quantified by end-market share (captured sometimes as “another project with a large contractor” in internal systems)
  • Small tuck-in modular acquisition closed during the quarter (closed April 1 previously referenced; expanded Mobile Modular reach into the Midwest and enables added Mobile Modular Plus services and product expansion for the acquired customer base)

AI IconFinancial Highlights

  • Total revenues: $221M, down 6% Y/Y (rental ops revenue growth +6% Y/Y offset by lower equipment/sales revenue)
  • Adjusted EBITDA: $83M, down 4% Y/Y
  • Mobile Modular rental margins: 55% vs 58% Y/Y (-300 bps) due to higher inventory center costs ($2.1M) ahead of stronger second-half shipments
  • Mobile Modular utilization: 70.1% vs 73.7% Y/Y; ended quarter at 70.6% after shipments exceeded returns
  • Mobile Modular revenue per unit: monthly revenue per unit on rent +7% to $922; avg monthly revenue per unit for new shipments +7% to $12.52
  • Portable Storage rental margin: 80% vs 83% Y/Y (-300 bps); adjusted EBITDA down 23% Y/Y to $8M despite revenue up 1% to $24M
  • Portable Storage utilization: 58.3% vs 61.1% Y/Y (challenging local commercial construction dynamics)
  • TRS RenTelco rental margins: 48% vs 44% Y/Y (+400 bps); total revenues +17% to $43M and adjusted EBITDA +29% to $25M
  • TRS sales gross margin: 66% vs 47% Y/Y (+1900 bps)
  • Income tax effective rate: 27% vs 27.3% Y/Y (-30 bps)
  • Enviroplex: total sales revenue $4.6M vs $19.9M prior year; adjusted EBITDA loss of $0.5M vs prior year profit $4.3M (timing shifts to second half)

AI IconCapital Funding

  • Share repurchases: 250k shares year-to-date; no purchases disclosed as occurring in Q1 and Q2? (management says bought a total of 250k shares year-to-date; also states they did not telegraph timing and emphasizes authorization availability)
  • Buyback authorization: originally 2.0M shares set in Sept 2024; 1.75M shares remaining available under authorization
  • Dividends: paid $25M during the period
  • Operating cash flow: $106M year-to-date vs $110M last year
  • Capital allocation / capex: rental equipment purchases $124M vs $50M last year (modular geographic expansion and TRS demand support)
  • Balance sheet: net borrowings $590M at quarter end; funded debt / LTM adjusted EBITDA = 1.65x

AI IconStrategy & Ops

  • Mobile Modular: modular geographic expansion + modular services (Mobile Modular Plus) to improve revenue per unit and services attach
  • Portable Storage: investment in sales coverage and fleet preparation to support future growth despite competitive local construction markets
  • TRS: willingness to add incremental CapEx in response to sustained data center demand; stated high utilization not viewed as constraining Q2 results
  • Fleet dynamics: shipments exceeding returns for the quarter; management frames last ~4 months as indicator that the “worst is behind us” for modular shipments/returns balance

AI IconMarket Outlook

  • FY2026 outlook unchanged at midpoint ranges: Total revenue $955M-$985M; adjusted EBITDA $363M-$375M; gross rental equipment capex $200M-$220M
  • Expectation drivers: stronger Modular performance offsets weaker portable storage; Enviroplex expected performance similar to 2024
  • Portable storage improvement catalyst: management does not expect meaningful move in 2026; requires nonresidential construction improvement in small local project markets (not expected this year)
  • Enviroplex timing: delayed contracted projects primarily shift into second half; expects Enviroplex “very strong” second half (Q3 vs Q4 timing not pinned down precisely)

AI IconRisks & Headwinds

  • Portable Storage remains pressured by smaller local commercial construction project demand; highly competitive market with multiple providers trying to put units out on rent; industry utilization remains lower
  • Enviroplex sales/earnings volatility driven by project timing and site readiness dependencies (permits, foundation work, utility hookup) causing revenue completion-date shifts (not cancellations)
  • Rental margin compression risk from fleet preparation and inventory center costs ahead of higher shipment levels
  • TRS longer-cycle uncertainty: lack of visibility into ongoing maintenance requirements for electronic test equipment after installation/refresh cycles over time

Q&A: Analyst Interest

  • Modular utilization inflection drivers: Management tied sequential utilization improvement (first in 4 years) to mega project wins and geographic expansion initiatives, plus education-market offset. They emphasized it is an early shift, not necessarily linear month-to-month, and asked for building momentum through disciplined execution in 2H.
  • Portable Storage recovery prerequisites: Management said weaknesses are consistent with smaller local commercial construction project dynamics and broad industry utilization softness, creating a highly competitive pricing/availability environment. They cited no meaningful regional differences. They framed 2027 as contingent on nonresidential construction improvement in those local markets.
  • TRS sustainability and CapEx logic: Management stated demand across data centers and other end markets shows no immediate slowdown, describing data center build-out as early-to-mid innings with equipment levels still below prior years. They justified incremental CapEx by runway/technology-cycle familiarity, while noting uncertainty around electronic test equipment maintenance needs.

Sentiment: MIXED

Note: This summary was synthesized by AI from the MGRC Q2 2026 earnings transcript. Financial data is complex; please verify all metrics against official SEC filings before making investment decisions.

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© 2026 Stock Market Info — McGrath RentCorp (MGRC) Financial Profile