The 10-second takeaway
For the quarter ended Dec. 31 (Q4), McGrath Rentcorp beat expectations on revenues and crushed expectations on earnings per share.
Compared to the prior-year quarter, revenue improved and GAAP earnings per share increased.
Gross margins increased, operating margins increased, net margins contracted.
McGrath Rentcorp booked revenue of $85.2 million. The two analysts polled by S&P Capital IQ expected net sales of $83.3 million on the same basis. GAAP reported sales were 6.6% higher than the prior-year quarter's $79.9 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.53. The three earnings estimates compiled by S&P Capital IQ predicted $0.43 per share. GAAP EPS of $0.53 for Q4 were 1.9% higher than the prior-year quarter's $0.52 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 51.9%, 380 basis points better than the prior-year quarter. Operating margin was 27.4%, 10 basis points better than the prior-year quarter. Net margin was 15.5%, 40 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $78.5 million. On the bottom line, the average EPS estimate is $0.40.
Next year's average estimate for revenue is $364.4 million. The average EPS estimate is $2.13.
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 35 members out of 41 rating the stock outperform, and six members rating it underperform. Among 19 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 19 give McGrath Rentcorp a green thumbs-up.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on McGrath Rentcorp is outperform, with an average price target of $32.33.
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