The 10-second takeaway
For the quarter ended June 30 (Q2), McGrath Rentcorp met expectations on revenues and missed estimates on earnings per share.
Compared to the prior-year quarter, revenue grew. GAAP earnings per share contracted.
Margins dropped across the board.
McGrath Rentcorp logged revenue of $87.1 million. The three analysts polled by S&P Capital IQ predicted a top line of $86.9 million on the same basis. GAAP reported sales were 4.0% higher than the prior-year quarter's $83.8 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures are normalized by S&P Capital IQ and may vary to maintain comparability with normalized estimates.
EPS came in at $0.38. The three earnings estimates compiled by S&P Capital IQ anticipated $0.45 per share. GAAP EPS of $0.38 for Q2 were 9.5% lower than the prior-year quarter's $0.42 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures are normalized by S&P Capital IQ and may vary to maintain comparability with normalized estimates.
For the quarter, gross margin was 46.1%, 260 basis points worse than the prior-year quarter. Operating margin was 21.1%, 230 basis points worse than the prior-year quarter. Net margin was 11.3%, 120 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $102.8 million. On the bottom line, the average EPS estimate is $0.53.
Next year's average estimate for revenue is $377.0 million. The average EPS estimate is $1.87.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 58 members out of 65 rating the stock outperform, and seven members rating it underperform. Among 32 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 31 give McGrath Rentcorp a green thumbs-up, and one give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on McGrath Rentcorp is hold, with an average price target of $27.00.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month. The Motley Fool owns shares of McGrath RentCorp. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.