McGrath RentCorp (NASDAQ:MGRC) Releases Earnings Results, Misses Expectations By $0.10 EPS

McGrath RentCorp (NASDAQ:MGRC) posted its quarterly earnings data on Wednesday. The financial services provider reported $1.37 earnings per share for the quarter, missing analysts’ consensus estimates of $1.47 by ($0.10), FiscalAI reports. The company had revenue of $221.11 million for the quarter, compared to analysts’ expectations of $236.51 million. McGrath RentCorp had a return on equity of 12.84% and a net margin of 16.38%.

Here are the key takeaways from McGrath RentCorp’s conference call:

• Rental operations revenue increased 6% year over year, led by Mobile Modular and TRS-RenTelco. Mobile Modular utilization improved sequentially for the first time since 2022, while units on rent rose for four consecutive months.
• TRS-RenTelco remained a major growth driver, with rental revenue up 17%, adjusted EBITDA up 29%, utilization reaching 68.9%, and strong demand from data centers, aerospace and defense, and semiconductor customers. The company raised planned rental-equipment CapEx to support continued growth.
• Total revenue fell 6% to $221 million and adjusted EBITDA declined 4% to $83 million, primarily because lower Mobile Modular and Enviroplex sales offset rental growth. Enviroplex revenue dropped to $4.6 million from $19.9 million due to project completions shifting into the second half.
• Portable Storage continued to face weak demand in smaller local commercial construction markets, with flat rental revenue, utilization declining to 58.3%, and adjusted EBITDA down 23%. Management does not expect a meaningful non-residential construction recovery this year.
• The company maintained the midpoints of its 2026 revenue and adjusted EBITDA outlook, now forecasting revenue of $955 million to $985 million and adjusted EBITDA of $363 million to $375 million. Gross rental-equipment CapEx increased to $200 million to $220 million, while net leverage remained moderate at 1.65 times adjusted EBITDA.

McGrath RentCorp Stock Down 2.5%

NASDAQ MGRC traded down $2.98 on Wednesday, hitting $117.00. 170,275 shares of the stock were exchanged, compared to its average volume of 185,091. McGrath RentCorp has a fifty-two week low of $94.99 and a fifty-two week high of $128.33. The company has a 50-day moving average price of $115.31 and a 200-day moving average price of $113.30. The company has a market cap of $2.87 billion, a PE ratio of 18.57, a PEG ratio of 1.22 and a beta of 0.43.

McGrath RentCorp Dividend Announcement

The company also recently declared a quarterly dividend, which will be paid on Friday, July 31st. Shareholders of record on Friday, July 17th will be issued a dividend of $0.495 per share. This represents a $1.98 annualized dividend and a yield of 1.7%. The ex-dividend date is Friday, July 17th. McGrath RentCorp’s payout ratio is 31.43%.

Insiders Place Their Bets

In other news, Director Joseph F. Hanna sold 7,500 shares of McGrath RentCorp stock in a transaction on Wednesday, July 1st. The shares were sold at an average price of $120.64, for a total transaction of $904,800.00. Following the completion of the sale, the director directly owned 151,549 shares of the company’s stock, valued at approximately $18,282,871.36. The trade was a 4.72% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, SVP Gilda Malek sold 1,407 shares of the business’s stock in a transaction on Monday, June 15th. The stock was sold at an average price of $114.04, for a total transaction of $160,454.28. Following the transaction, the senior vice president owned 8,018 shares of the company’s stock, valued at approximately $914,372.72. The trade was a 14.93% decrease in their position. The disclosure for this sale is available in the SEC filing. In the last three months, insiders sold 30,051 shares of company stock worth $3,486,240. 1.40% of the stock is currently owned by insiders.

Institutional Inflows and Outflows

Several institutional investors and hedge funds have recently made changes to their positions in MGRC. EverSource Wealth Advisors LLC raised its position in shares of McGrath RentCorp by 767.7% during the 2nd quarter. EverSource Wealth Advisors LLC now owns 269 shares of the financial services provider’s stock worth $31,000 after acquiring an additional 238 shares in the last quarter. Danske Bank A S acquired a new position in McGrath RentCorp in the third quarter valued at approximately $47,000. Strs Ohio acquired a new position in McGrath RentCorp in the first quarter valued at approximately $56,000. Voleon Capital Management LP purchased a new position in McGrath RentCorp in the third quarter valued at approximately $204,000. Finally, Neuberger Berman Group LLC increased its stake in McGrath RentCorp by 6.9% in the fourth quarter. Neuberger Berman Group LLC now owns 1,948 shares of the financial services provider’s stock valued at $204,000 after purchasing an additional 126 shares during the last quarter. 92.05% of the stock is owned by institutional investors and hedge funds.

Wall Street Analyst Weigh In

Separately, Weiss Ratings raised McGrath RentCorp from a “hold (c)” rating to a “hold (c+)” rating in a research note on Tuesday. Two analysts have rated the stock with a Buy rating and two have assigned a Hold rating to the stock. According to data from MarketBeat, the company presently has a consensus rating of “Moderate Buy” and a consensus price target of $141.50.

About McGrath RentCorp

McGrath RentCorp, through its subsidiaries, provides rental, sales, and servicing of equipment for commercial, industrial, environmental, and residential markets. The company operates primarily through two segments—mobile storage and water management—offering flexible solutions for customers requiring on-site storage, water transport, treatment, and dewatering services.

In its mobile storage segment, McGrath RentCorp supplies portable storage containers and modular office units to sectors including construction, retail, government, and disaster restoration.