United Rentals (NYSE: URI) came in under analysts' estimates last quarter but now has a chance to fix things this quarter. The company will unveil its latest earnings on Tuesday, July 19. United Rentals offers equipment for rent to customers that include construction and industrial companies, manufacturers, utilities, municipalities, homeowners, and government entities.

What analysts say:

  • Buy, sell, or hold?: Analysts strongly back United Rentals, with 10 of 11 rating it a buy and the remainder rating it a hold. While analysts still rate the stock a moderate buy, they are a little more optimistic about it compared with three months ago.
  • Revenue forecasts: On average, analysts predict $638.4 million in revenue this quarter. That would represent a rise of 14.6% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.44 per share. Estimates range from $0.39 to $0.49.

What our community says:
CAPS All-Stars are solidly backing the stock, with 93.9% giving it an "outperform" rating. The community at large concurs with the All-Stars, with 90.7% awarding it a rating of "outperform." Fools are gung-ho about United Rentals, though the message boards have been quiet lately, with only 91 posts in the past 30 days. Despite the majority sentiment in favor of United Rentals, the stock has a middling CAPS rating of three out of five stars.

Management:
United Rentals' income has fallen year over year by an average of 60%. Revenue has now gone up for three straight quarters. The company raised its gross margin by 4.8 percentage points in the last quarter. Revenue rose 9.4%, while cost of sales rose 2.7% to $385 million from a year earlier.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters. 

Quarter Q1 Q4 Q3 Q2
Gross Margin 26.4% 29.3% 34.5% 30.7%
Operating Margin 5.7% 7.9% 15.4% 10.6%
Net Margin -3.8% -3.5% 3.8% 2.2%
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