Stocks in the News – United Rentals, Inc. (NYSE:URI)

On Wednesday, United Rentals, Inc. (NYSE:URI) fell -0.34% with the overall traded volume of 2.84 shares above its average volume of 1.42 shares. The company has the market value of $10.09B and its EPS ratio for the past year was $6.48. The company finished business at $119.45.

United Rentals, Inc. (URI) recently declared financial results for the first quarter 2017. Total revenue was $1.356B and rental revenue was $1.166B for the first quarter, contrast with $1.310 billion and $1.117B, respectively, for the same period last year. On a GAAP basis, the company stated first quarter net income of $109 million, or $1.27 per diluted share, contrast with $92 million, or $1.01 per diluted share, for the same period last year.

Adjusted EPS for the quarter was $1.63 per diluted share, contrast with $1.40 per diluted share for the same period last year. Adjusted EBITDA was $591.0M and adjusted EBITDA margin1 was 43.6%, reflecting a boost of $7 million and a decrease of 100 basis points, respectively, from the same period last year.

First Quarter 2017 Highlights:

Rental revenue (which includes owned equipment rental revenue, re-rent revenue and ancillary items) rose 4.40% year-over-year. Within rental revenue, owned equipment rental revenue raised 3.80% year-over-year, reflecting a boost of 7.0% in the volume of equipment on rent partially offset by a 1.40% decrease in rental rates.

Time utilization rose 190 basis points year-over-year to 66.0%, a first quarter record for the company.

The company’s Trench, Power and Pump specialty segment’s rental revenue raised by almost 17.0% year-over-year, mainly on a same store basis, while the segment’s rental gross margin improved by 240 basis points to 44.40%.

The company generated $106.0M of proceeds from used equipment sales at a GAAP gross margin of 43.40% and an adjusted gross margin of 50.90%, contrast with $115.0M at a GAAP gross margin of 40.90% and an adjusted gross margin of 48.70% for the same period last year.

The company generated $623.0M of net cash offered by operating activities and $490 million of free cash flow, contrast with $604.0M and $627.0M, respectively, for the same period last year. Net rental capital expenditures were $113.0M, contrast with net proceeds of $15.0M for the same period last year.

Free Cash Flow and Fleet Size:

For the first three months of 2017 and 2016, net cash offered by operating activities was $623.0M and $604.0M, respectively. For the first three months of 2017, free cash flow was $490 million, after total rental and non-rental gross capital expenditures of $241.0M. By comparison, free cash flow for the first three months of 2016 was $627.0M after total rental and non-rental gross capital expenditures of $123.0M.

The size of the rental fleet was $8.92B of original equipment cost at March 31, 2017, contrast with $8.99B at December 31, 2016. The age of the rental fleet was 45.90 months on an OEC-weighted basis at March 31, 2017, contrast with 45.20 months at December 31, 2016.

Return on Invested Capital (ROIC)

Return on invested capital was 8.40% for the 12 months ended March 31, 2017, a decrease of 30 basis points from the 12 months ended March 31, 2016. The company’s ROIC metric uses after-tax operating income for the trailing 12 months divided by average stockholders’ equity, debt and deferred taxes, net of average cash. To mitigate the volatility related to fluctuations in the company’s tax rate from period to period, the federal statutory tax rate of 35% is used to calculate after-tax operating income.

Technical Analysis:

The company has 84.46 shares outstanding and 97.70% shares of the company were owned by institutional investors. The company has 1.75 value in price to sale ratio while price to book ratio was recorded as 6.11. The company earned $566.00M in prior twelve months on revenue of $5.76B. It beta stands at 2.47.

Analyst recommendation for this stock stands at 2.70.

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