McGrath RentCorp
McGrath RentCorp Fundamental Analysis
McGrath RentCorp (MGRC) shows moderate financial fundamentals with a PE ratio of 16.52, profit margin of 16.55%, and ROE of 13.21%. The company generates $0.9B in annual revenue with moderate year-over-year growth of 3.65%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 64.8/100 based on profitability, valuation, growth, and balance sheet metrics. The C+ grade reflects average fundamentals, with notable risks in certain areas.
Fundamental Health Score
We analyze MGRC's fundamental strength across five key dimensions:
Efficiency Score
WeakMGRC struggles to generate sufficient returns from assets.
Valuation Score
ModerateMGRC shows balanced valuation metrics.
Growth Score
WeakMGRC faces weak or negative growth trends.
Financial Health Score
ExcellentMGRC maintains a strong and stable balance sheet.
Profitability Score
ModerateMGRC maintains healthy but balanced margins.
Key Financial Metrics
Is MGRC Expensive or Cheap?
P/E Ratio
MGRC trades at 16.52 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, MGRC's PEG of 2.27 indicates potential overvaluation.
Price to Book
The market values McGrath RentCorp at 2.09 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 5.89 times EBITDA. This is generally considered low.
How Well Does MGRC Make Money?
Net Profit Margin
For every $100 in sales, McGrath RentCorp keeps $16.55 as profit after all expenses.
Operating Margin
Core operations generate 25.82 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $13.21 in profit for every $100 of shareholder equity.
ROA
McGrath RentCorp generates $6.63 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
McGrath RentCorp generates strong operating cash flow of $255.68M, reflecting robust business health.
Free Cash Flow
McGrath RentCorp generates strong free cash flow of $211.30M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $8.59 in free cash annually.
FCF Yield
MGRC converts 8.22% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
16.52
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
2.27
vs 25 benchmark
P/B Ratio
Price to book value ratio
2.09
vs 25 benchmark
P/S Ratio
Price to sales ratio
2.73
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.42
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.36
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.13
vs 25 benchmark
ROA
Return on assets percentage
0.07
vs 25 benchmark
ROCE
Return on capital employed
0.11
vs 25 benchmark
How MGRC Stacks Against Its Sector Peers
| Metric | MGRC Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 16.52 | 25.83 | Better (Cheaper) |
| ROE | 13.21% | 1291.00% | Weak |
| Net Margin | 16.55% | -43845.00% (disorted) | Strong |
| Debt/Equity | 0.42 | 0.80 | Strong (Low Leverage) |
| Current Ratio | 1.36 | 10.66 | Neutral |
| ROA | 6.63% | -1540652.00% (disorted) | Weak |
MGRC outperforms its industry in 3 out of 6 key metrics, particularly excelling in Net Margin, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews McGrath RentCorp's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
61.93%
Industry Style: Cyclical, Value, Infrastructure
High GrowthEPS CAGR
50.49%
Industry Style: Cyclical, Value, Infrastructure
High GrowthFCF CAGR
39.09%
Industry Style: Cyclical, Value, Infrastructure
High Growth