Company Reports

United Rentals reported record revenue of $4.4 billion with growth in the core rentals business accelerating 12.7% to $3.8 billion. Adjusted EBITDA grew 13.6% to $2.1 billion but this was flattered by a $49 million gain on an asset disposal.

United Rentals has done an impressive job of building a leadership position in the equipment rental market since its founding in 1997. The company has completed hundreds of acquisitions in a sector characterized by significant fragmentation. United Rentals has increasingly integrated its locations, improved operations, and clearly realized some cost advantages via economies of scale and scope. This has allowed it to expand at a double-digit revenue compound annual growth rate since 2012 (triple the industry growth rate) and achieve the leading market position with approximately 16% share. Its scale advantages allow the company to target larger, more sophisticated customers with a one-stop shop strategy of offering a wider array of equipment and services to meet customer needs. As United Rentals’ scale grew in general rentals, its acquisition strategy increasingly turned to specialty rentals—more-complicated solutions bundled for customers at their job sites for which it can presumably command better pricing and margins. Examples include portable storage and bathroom facilities for a construction site or mobile power equipment at a plant. This strategy has increased margin volatility somewhat, however.

United Rentals posted record revenue of just under $4 billion, which included 8.7% of rental revenue growth. Adjusted EBITDA of $1.76 billion represented 60 basis points of margin expansion.

United Rentals has done an impressive job of building a leadership position in the equipment rental market since its founding in 1997. The company has completed hundreds of acquisitions in a sector characterized by significant fragmentation. United Rentals has increasingly integrated its locations, improved operations, and clearly realized some cost advantages via economies of scale and scope. This has allowed it to expand at a double-digit revenue compound annual growth rate since 2012 (triple the industry growth rate) and achieve the leading market position with approximately 16% share. Its scale advantages allow the company to target larger, more sophisticated customers with a one-stop shop strategy of offering a wider array of equipment and services to meet customer needs. As United Rentals’ scale grew in general rentals, its acquisition strategy increasingly turned to specialty rentals—more-complicated solutions bundled for customers at their job sites for which it can presumably command better pricing and margins. Examples include portable storage and bathroom facilities for a construction site or mobile power equipment at a plant. This strategy has increased margin volatility somewhat, however.

United Rentals has done an impressive job of building a leadership position in the equipment rental market since its founding in 1997. The company has completed hundreds of acquisitions in a sector characterized by significant fragmentation. United Rentals has increasingly integrated its locations, improved operations, and clearly realized some cost advantages via economies of scale and scope. This has allowed it to expand at a double-digit revenue compound annual growth rate since 2012 (triple the industry growth rate) and achieve the leading market position with approximately 16% share. Its scale advantages allow the company to target larger, more sophisticated customers with a one-stop shop strategy of offering a wider array of equipment and services to meet customer needs. As United Rentals’ scale grew in general rentals, its acquisition strategy increasingly turned to specialty rentals—more-complicated solutions bundled for customers at their job sites for which it can presumably command better pricing and margins. Examples include portable storage and bathroom facilities for a construction site or mobile power equipment at a plant.

United Rentals delivered 5% revenue growth in 2025 to $16.1 billion, but nearly 200 basis points of gross margin compression left earnings relatively flat. This prompted a 13% correction in the share price, as investors were again spooked about the company’s ability to grow profitably.

Rental revenue increased 6%, but adjusted EBITDA only increased 2%, reflecting 170 basis points of margin compression. Management raised revenue and capex guidance, implying strength into 2026. While the fundamentals are strong, we can understand some investor disappointment at the margin drag.

United Rentals has done an impressive job of building a leadership position in the equipment rental market since its founding in 1997. The company has completed hundreds of acquisitions in a sector characterized by significant fragmentation. United Rentals has increasingly integrated its locations, improved operations, and clearly realized some cost advantages via economies of scale and scope. This has allowed it to expand at a double-digit revenue compound annual growth rate since 2012 (triple the industry growth rate) and achieve the leading market position with approximately 16% share. Its scale advantages allow the company to target larger, more sophisticated customers with a one-stop shop strategy of offering a wider array of equipment and services to meet customer needs. As United Rentals’ scale grew in general rentals, its acquisition strategy increasingly turned to specialty rentals—more-complicated solutions bundled for customers at their job sites for which it can command better pricing and margins. Examples include portable storage and bathroom facilities for a construction site or mobile power equipment at a plant.

United Rentals raised the midpoint of its revenue and EBITDA guidance due to higher, though margin-dilutive, ancillary sales and the one-off benefit of the H&E transaction termination fee. Execution was still strong amid a nervous macro environment and likely assuages investor concern.

We are transferring coverage of United Rentals, the market leader in the North American equipment rental industry.

United Rentals has done an impressive job of building a leadership position in the equipment rental market since its founding in 1997. The company has completed hundreds of acquisitions in a sector characterized by significant fragmentation. United Rentals has increasingly integrated its locations, improved operations, and clearly realized some cost advantages via economies of scale and scope. This has allowed it to expand at a double-digit revenue compound annual growth rate since 2012 (triple the industry growth rate) and achieve the leading market position with approximately 16% share. Its scale advantages allow the company to target larger, more sophisticated customers with a one-stop shop strategy of offering a wider array of equipment and services to meet customer needs. As United Rentals’ scale grew in general rentals, its acquisition strategy increasingly turned to specialty rentals—more-complicated solutions bundled for customers at their job sites for which it can command better pricing and margins. Examples include portable storage and bathroom facilities for a construction site or mobile power equipment at a plant.

United Rentals' first-quarter rental revenue rose 7.4% year over year on strong end market demand; sales of used equipment fell 1.6% amid continued normalization. Total revenue of $3.7 billion and adjusted EPS of $8.86 both outpaced LSEG consensus and sent the stock up over 9% in April 24 trading.

We expect United Rentals will continue to be the top player in the North American equipment rental industry with 15% share. As the industry leader, the company provides customers with better equipment availability and reliability than smaller players. However, many of the equipment brands found in United Rentals’ product catalog can also be found with competitors, such as Sunbelt Rentals (owned by Ashtead), Herc, and thousands of other rental companies across North America.

United Rentals announced on Feb. 18 that it no longer intends to acquire H&E Equipment. We were not yet modeling the deal closing, so there is no change to our fair value estimate. United Rentals announced the acquisition on Jan. 14 for $92 per share in an all-cash deal, but that deal contained a “go-shop” period through Feb. 17 during which H&E could solicit another offer. On Feb. 16, H&E received a cash and stock offer from United Rentals' rival Herc Holdings for $104.59 per share, and H&E announced on Feb. 18 that Herc’s offer is a “Superior Proposal” as defined in the United Rentals purchase agreement. H&E, according to United Rentals, intends to enter into a merger agreement with the new buyer provided United Rentals does not offer an improved bid. United Rentals has waived the required four-day negotiating period with H&E to come up with a rebuttal to Herc’s offer. United Rentals CEO Matt Flannery cited financial discipline in not making a new offer. We are fine with the deal not happening for United Rentals as we felt the $92 per share offer did not leave it much room for possible poor execution nor the possible failure to achieve cost synergies of $130 million in EBITDA within 24 months of closing.

United Rentals posted solid fourth-quarter results, beating LSEG revenue consensus, but adjusted diluted earnings per share of $11.59 missed the $11.65 consensus. Total revenue in the fourth quarter increased 9.8% year over year to $4.1 billion, while adjusted EPS rose 2.9% as used equipment prices continue to normalize. We are leaving our fair value estimate unchanged but will review all modeling assumptions once we roll our model forward for the 10-K and incorporate the pending H&E acquisition announced Jan. 14. That all-cash deal remains on track to close in the first quarter. Management introduced its 2025 outlook, which is in line with our forecast for the year, calling for revenue of $15.6 billion–$16.1 billion and adjusted EBITDA of $7.2 billion–$7.45 billion. This guidance does not include the impact of the H&E acquisition, and for adjusted EBITDA at its midpoint is an implied 50-basis-point drop versus 2024's 46.7%.

United Rentals announced on Jan. 14 that it is buying smaller competitor H&E Equipment Services for $92 per share in an all-cash transaction set to close in the first quarter. The enterprise value is $4.8 billion, including $1.4 billion of acquired net debt, which is 5.8 times trailing 12 month EBITDA after $130 million of expected annualized cost synergies within two years of close and tax benefits of about $54 million. H&E’s trailing 12 month revenue is $1.5 billion, about 10% of United Rentals' revenue. Management expects the deal to be accretive to EPS and free cash flow in its first year after closing and will fund the deal by issuing new debt and using credit lines. This additional leverage should bring net debt/EBITDA to about 2.3 times, and management expects to be at about 2.0 times within 12 months of close, all within the normal target range of 1.5-2.5 times. United Rentals will pause share repurchases while it incorporates the acquisition and reduces debt but stressed no change to its dividend philosophy. We see the deal as roughly value neutral provided the realization of the cost synergies and $120 million of annual cross-selling revenue within three years of close. The revenue synergies target is bringing H&E customers to United Rentals' specialty rental lineup.

United Rentals reported mixed third-quarter results relative to LSEG consensus, performing in line on revenue but falling short on adjusted diluted earnings per share with $11.80 versus the $12.48 consensus. Management reaffirmed its full-year midpoint guidance. We have increased our fair value estimate to $590 per share from $575 due to the time value of money.

We think United Rentals will continue to be the top player in the North American equipment rental industry with 15% share. As the industry leader, the company provides customers with better equipment availability and reliability than smaller players. However, many of the equipment brands found in United Rentals’ product catalog can also be found with competitors, such as Sunbelt Rentals (owned by Ashtead), Herc, and thousands of other rental companies across North America.

United Rentals' second quarter looked solid to us with revenue growth in all areas except equipment sales that continue to normalize off artificially high pricing in 2022 and 2023. Revenue, adjusted EBITDA, and EPS were all records and adjusted EPS of $10.70 grew 8.3% year over year. We are raising our fair value estimate to $575 from $569 on the time value of money since our last update. Total revenue increased 6.2% to $3.8 billion with rental making up 85% of total sales and that segment growing 7.8%. Fleet productivity, a utilization measure, increased 4.6% and by 3% excluding the Yak acquisition closed on March 15. Management sounds optimistic about a strong second half of the year and cited particularly strong demand by customers for large projects. The company’s size and breadth with leading share of 15%, over 1,600 global branches, and about 4,800 equipment categories should help it win lots of business for these types of deals, especially for the specialty business that focuses on larger projects.

We think United Rentals will continue to be the top player in the North American equipment rental industry with 15% share. As the industry leader, the company provides customers with better equipment availability and reliability than smaller players. However, many of the equipment brands found in United Rentals’ product catalog can also be found with competitors, such as Sunbelt Rentals (owned by Ashtead), Herc, and thousands of other rental companies across North America.