McGrath RentCorp Common Stock (MGRC)

FairStock Score: 65/100 — STEADY

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

I approach McGrath RentCorp as a Graham-style asset and earnings buyer. The company rents modular buildings, portable storage, and electronic test equipment — useful, recurring B2B assets with some customer stickiness, but also capital-intensive. In fiscal Q2 2026, the quarter ended 2026-06-30, revenue was $221.1 million, net income $33.7 million, and diluted EPS $1.37. A year earlier, in fiscal Q2 2025, the quarter ended 2025-06-30, revenue was $235.6 million, net income $36.0 million, and diluted EPS $1.46, so sales and profits fell about 6.2% and 6.4%. For FY2025, revenue was $944.2 million, net income $156.3 million, and diluted EPS $6.35; that was below FY2024's $231.7 million net income and $9.43 EPS. The Lynch-style category is STALWART, based on 8.9% annual profit growth over five years and 49.0% revenue growth, but the recent trend is clearly softer. FairStock calculations at the 2026-10-13 close of $114.64 show a P/E of 18.46, P/B of 2.25, ROE of 12.69%, ROCE of 6.10%, debt-to-equity of 0.47, and dividend yield of 1.77%. The Graham Number is $84.41, leaving a negative margin of safety of 35.81%, and trailing free cash flow is -$6.9 million, a -0.2% FCF yield. Piotroski is 6/9 and Altman is 2.08, so the balance sheet is not alarming but not fortress-like. This is a decent business at a full price; I would need evidence that rental demand and cash generation are improving before calling it a bargain.

In plain English: McGrath RentCorp rents modular buildings, portable storage containers, and electronic test equipment to businesses. It is profitable and pays a small dividend, but recent quarterly sales and profits were lower than a year earlier, and the business generated slightly negative cash after its spending needs over the last year. At the recent price of $114.64, the shares look full compared with the company’s current earnings and accounting value, not obviously cheap.

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Data as of 2026-10-13 close · note generated 2026-10-15 · model deepseek-flash

Sources (SEC EDGAR): fiscal Q2 2026 10-Q (period ended 2026-06-30) · fiscal Q1 2026 10-Q (period ended 2026-03-31) · fiscal Q3 2025 10-Q (period ended 2025-09-30) · fiscal Q2 2025 10-Q (period ended 2025-06-30) · FY2025 10-K (period ended 2025-12-31) · FY2024 10-K (period ended 2024-12-31) · FY2023 10-K (period ended 2023-12-31)

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer