Can anyone remember the last time Mobile Mini (NASDAQ:MINI) failed to clear the quarterly earnings hurdle Wall Street set for it? I can, but I have to cheat and check the records on The answer is that it's been 13 quarters -- more than three years -- since this agile little Motley Fool Stock Advisor recommendation let us down. On Tuesday morning, Mini tries to keep its streak alive when it reports Q2 2007 earnings.

What analysts say:

•  Buy, sell, or waffle? Eleven analysts follow Mobile Mini, splitting their votes 7-to-4, buy-versus-hold.

•  Revenues. On average, they're looking for 17% sales growth, to $77.6 million.

•  Earnings. Profits are predicted to climb 19% to $0.38 per share.

What management says:
It's not often that investors are happy to hear that management doesn't have a handle on how well its business is doing, but that was the case last quarter at Mobile Mini. CEO Steven Bunger observed: "Our first quarter internal growth rate was higher than expected and translated into better than expected lease revenues, EBITDA and diluted earnings per share." Especially pleasant to hear was that lease revenues in Europe increased 20% year over year.

This happy news persuaded management to raise guidance for the second fiscal quarter. Mobile Mini now expects $79 million to $80 million in leasing revenues for the quarter (ahead of consensus), and $0.18-$0.20 per share in profits. Note that the profits number falls below the pro forma number bandied about by the analysts, who cribbed management's $0.36 to $0.38 pro forma number in preparing their estimates.

What management does:
There appears to be some gross margin compression going on at Mobile Mini, with gross margins slipping in each of the last four quarters. That said, "cost of sales" is a very small portion of Mobile Mini's overall costs of doing business (this is, after all, essentially a rental company). In that regard, I suspect the operating margin number is the more important one to watch here, and it's on the rise -- up 200 basis points over the last 18 months.

For comparison, that's superior to the operating margins sported by Amerco (NASDAQ:UHAL), Public Storage (NYSE:PSA), U-Store-It (NYSE:YSI), and Williams Scotsman (NASDAQ:WLSC). About the only publicly traded rival that can boast Mobile Mini-beating margins is Sovran Self Storage (NYSE:SSS).





























All data courtesy of Capital IQ, a division of Standard & Poor's. Data reflects trailing-12-month performance for the quarters ended in the named months.

One Fool says:
Mobile Mini has slightly underperformed the market since Fool co-founder David Gardner recommended it to subscribers of Motley Fool Stock Advisor back in April. But David's not concerned. Citing the firm's recent ascent to 32% revenue growth, modest 15 forward P/E ratio, and 18% projected growth rate, he thinks this "boring" stock looks excitingly priced at a 0.85 PEG.

Personally, I'd take the more conservative view of valuing the stock not on what analysts guess it will earn this year, but on what it has actually earned -- an argument I laid out in my article "Dangerous Growth" last year. From that perspective, and using the most recent analyst estimates, I work out Mobile Mini's PEG to be about 1.3 -- slightly overpriced if it only meets analyst estimates.

The good news: Go back and reread the lead paragraph of today's column. It's been more than three years since Mobile Mini even came close to only meeting expectations, so my guess is that the share price is somewhere between "fair" and "slightly cheap."

Get both sides of the debate. Read why David Gardner thinks Mobile Mini is an even better buy. When you take a free, 30-day trial to Stock Advisor, you'll get instant access to David's full investment write-up on the stock.

Fool contributor Rich Smith does not own shares of any company named above. The Motley Fool's disclosure policy is stored in an easily accessible location.