United Rentals (NYSE:URI) Q3 Earnings: What Can You Expect?

in EARNINGS/INVESTING IDEAS by

United Rentals, Inc. (NYSE:URI) is scheduled to report Q3 earnings results after markets close for trading on October 28, 2020.

The company is expected to report earnings of $4.34/share on revenue of $2.158 billion. The consensus earnings per share (EPS) of $4.34/share is based on a poll of 14 analysts and represents a decline in eps of −27.1% over the same quarter last year, when the company reported earnings of $5.96/share.

The revenue forecast of $2.158 billion based on a poll of 13 analysts implies a year-over-year (YoY) decline in revenue of −13.3%. Last year the company reported $2.488 billion in revenue for the quarter.

Expected to report EPS contraction of −27.1% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $2,158.21 $2,488.00 −13.3%
EPS $4.34 $5.96 −27.1%

Earnings Call Trends

Historically, management has exceeded analyst expectations 7 out of the last 8 tracked quarters, and missed expectations 1 quarter.

What are your expectations from United Rentals, Inc. for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $1.93 $3.68 90.3% Beat
Q1, 2020 $2.53 $3.35 32.6% Beat
Q4, 2019 $5.29 $5.60 5.8% Beat
Q3, 2019 $5.66 $5.96 5.3% Beat
Q2, 2019 $4.51 $4.74 5.2% Beat
Q1, 2019 $3.04 $3.31 8.8% Beat
Q4, 2018 $4.89 $4.85 −0.9% Missed
Q3, 2018 $4.62 $4.74 2.5% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price did not react much to the update.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
July 29, 2020 $158.33 $156.91 −0.9% Decline
April 29, 2020 $116.55 $128.50 10.3% Increase
January 29, 2020 $150.50 $141.58 −5.9% Decline
October 16, 2019 $120.68 $127.90 6.0% Increase

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −3.04, the model suggests that the company is not likely to be an earnings manipulator. A value of −3.04 implies a 0.1% chance of earnings manipulation.

Fundamentals And Technical Analysis

United Rentals, Inc. is currently trading at $189.32/share, up 1.0% for the day. The company is trading at approximately 93.0% of its 52-week high of $203.57/share. The company’s stock price is up 20.7% since the last earnings report and up 0.6% over the previous week.

The company’s 14 Day Relative Price Index (RSI) of 53.23 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NYSE:URI Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 12.25 and a forward P/E multiple of 12.38.

United Rentals, Inc.’s current share price also implies a price-to-book (P/B) multiple of 3.49. The following table summarizes some other key fundamental ratios:

Data as of October 21, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $189.32
P/E Ratio 12.2x
P/E Ratio (Fwd) 12.4x
PEG Ratio 1.1
Total Debt / Total Capital 45.1%
Levered Free Cash Flow $2.142 billion
EV / EBITDA 10.0x

Finbox

United Rentals, Inc. is a large-cap stock with a market capitalization of $13.646 billion and a total enterprise value of $24.63 billion. The company operates in the Industrials sector and the Trading Companies & Distributors industry.

United Rentals, Inc., through its subsidiaries, operates as an equipment rental company. It operates in two segments, General Rentals; and Trench, Power and Fluid Solutions. The General Rentals segment rents general construction and industrial equipment, including backhoes, skid-steer loaders, forklifts, earthmoving equipment, and material handling equipment; aerial work platforms, such as boom lifts and scissor lifts; and general tools and light equipment comprising pressure washers, water pumps, and power tools. It serves construction and industrial companies, manufacturers, utilities, municipalities, homeowners, and government entities. The Trench, Power and Fluid Solutions segment rents specialty construction products that include trench safety equipment, which comprise trench shields, aluminum hydraulic shoring systems, slide rails, crossing plates, construction lasers, and line testing equipment for underground work; and power, as well as heating, ventilating, and air conditioning equipment, including portable diesel generators, electrical distribution equipment, and temperature control equipment. It is also involved in the rental of fluid solutions equipment primarily used for fluid containment, transfer, and treatment. This segment serves construction companies involved in infrastructure projects, and municipalities and industrial companies. The company also sells aerial lifts, reach forklifts, telehandlers, compressors, and generators; construction consumables, tools, small equipment, and safety supplies; and parts for equipment that is owned by its customers, as well as provides repair and maintenance services. It sells its used equipment through its sales force, brokers, and Website, as well as at auctions and directly to manufacturers. As of January 29, 2020, the company operated a network of 1,164 rental locations in North America and 11 in Europe. United Rentals, Inc. was founded in 1997 and is headquartered in Stamford, Connecticut.

Expertise: financial technology, analyzing market trends. Brian is a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to research stock fundamentals. Brian’s background is in physics & computer science and previously worked as a software engineer at GE Healthcare. He enjoys applying his expertise in technology to help find market trends that impact investors. Brian can be reached at brian@finbox.io or at +1 (516) 778-6257.

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