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what it is
McGrath rents modular classrooms, storage containers, and testing gear to schools and businesses.
how it gets paid
Last year McGrath RentCorp made $944M in revenue. Mobile Modular was the main engine at $430M, or 46% of sales.
why it's growing
Revenue grew 3.7% last year. 47.5% gross margin means the company kept almost half of sales after direct costs.
what just happened
With ~$944M annual revenue, a typical quarter is ~$230–240M unless you are reading YTD or a different revenue subtotal—verify in the 10-Q. A ~$4.32 EPS figure is usually annual/TTM in feeds, not one quarter; ~47.5% gross margin still needs the same period tag as whatever revenue line you cite.
At a glance
B++ balance sheet — above average — nothing keeping you up at night
85/100 earnings predictability — you can trust these numbers
19.5x trailing p/e — priced about right
1.9% dividend yield — cash in your pocket every quarter
12.4% return on capital — nothing to write home about
xvary composite: 69/100 — average
What they do
McGrath rents modular classrooms, storage containers, and testing gear to schools and businesses.
McGrath has 1,219 employees and four rental lines, so you are not betting on one customer type. Mobile Modular, Portable Storage, TRS-RenTelco, and Enviroplex pay in different cycles, from schools to construction to labs. Gross margin was ~47.5% (after direct costs); operating margin ~25.8% is what is left after running the rental fleet—do not confuse the two.
How they make money
$944M
annual revenue · their business grew +3.7% last year
Mobile Modular
$430M
Portable Storage
$230M
TRS-RenTelco
$180M
Enviroplex
$104M
The products that matter
portable space rentals
Modular Buildings
~$660M · modular + portable (combined)
The segment table above splits Mobile Modular (~$430M) and Portable Storage (~$230M); together they are the modular/space center of gravity. If demand weakens there, you feel it everywhere else.
core engine
test gear rentals
Electronic Test Equipment
$180M · rebound watch
At $180M in the segment table above (TRS-RenTelco), this line is smaller, but it matters because management pointed to a rebound here. You want that rebound to stick for more than one quarter.
recovery lever
specialty rental portfolio
Other Rentals
~$104M · Enviroplex
The bridge lists Enviroplex at ~$104M—smaller than modular or test gear, but still a real fourth line. It adds mix, not the core thesis.
supporting cast
Key numbers
$0.944B
annual revenue
That is the full-year top line—compare any “beat” language to the consensus snapshot date on your data terminal (this page had a broken vendor string where a firm name should appear).
25.8%
operating margin
Operating margin is after operating expenses, not just direct costs. At ~25.8%, roughly a quarter of revenue makes it through operations before interest and taxes.
12.4%
return on capital
That means each $100 tied up in the business earned $12.40 before financing costs. That is solid for a rental fleet.
1.9%
dividend yield
Yield means cash returned to you from the stock. At $115.44, that is about $2.19 a share each year.
Financial health
B++
strength
- balance sheet grade B++ — above average financial health
- risk rank 2 — safer than 80% of stocks
- price stability 85 / 100
- long-term debt $552M (18% of capital)
B++ — functional but not a standout on the balance sheet.
Total return vs. market
Return history isn't available for MGRC right now.
source: institutional data · return history unavailable
What just happened
beat estimates
A single quarter is on the order of ~$236M (q) when FY sales are ~$944M—the old $687M line is usually multi-quarter YTD or another subtotal, not one quarter. $4.32 reads like a full-year or TTM EPS in some feeds; do not paste it next to quarterly revenue without the same period tag. Gross margin ~47.5% still fits the rental model.
vs. prior year revenue growth for this business is on a low-single-digit to ~mid-single-digit percent FY trend in this snapshot—ignore triple-digit “growth” that comes from comparing a quarterly line to a partial-year or acquisition-skewed prior period.
~$236M
revenue (q)
~$1.08
eps (q est.)
47.5%
gross margin
gross margin
47.5% gross margin means the company kept almost half of sales after direct costs, which is why the rental model still works.
source: company earnings report, 2026
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What could go wrong
the main risk is simple: full-year EPS fell 71.7%, and the stock is priced like that was a temporary mistake.
high
profit recovery stalls
Full-year EPS fell 71.7% even though revenue still grew to $911M. That gap tells you margins did the damage.
If operating margin stays around 16.6%, the stock looks expensive for the quality of earnings you are buying.
med
modular buildings carries too much of the story
Modular Buildings produced $663M versus $197M for Electronic Test Equipment and $84M for Other Rentals.
When the largest segment dominates the mix, softness there hits both revenue quality and investor confidence at the same time.
med
leadership changes during a repair job
Joseph Hanna retires April 3, 2026. That handoff lands right as investors are waiting for earnings improvement to become visible.
If the transition creates even small execution slippage, the recovery timeline gets longer than the current price suggests.
med
valuation already gives management some credit
The shares trade at 19.5x trailing earnings and sit inside a $95–$128 range while the current price is $115.44.
You are not buying a stock the market gave up on. You are buying one the market already expects to improve.
A $911M business with a 16.6% operating margin and 19.5x trailing earnings does not have much room for another profit miss. That's the setup you are underwriting.
source: institutional data · regulatory filings · risk analysis
Pay attention to
metric
operating margin recovery
16.6% is the number to watch. Revenue can drift higher, but if margin does not move, the EPS repair case weakens fast.
trend
2026 revenue guidance of $945M–$995M
The midpoint is $970M versus $944M in 2025. That is steady growth, not a rocket ship, so profit conversion matters more than the top line alone.
calendar
new ceo takes over april 3, 2026
The first earnings call under new leadership should tell you whether this is a continuity story or the start of a harder reset.
risk
dividend increase versus earnings pressure
The dividend was raised to $0.495 and yields about 1.9%. Nice signal, but you want that cash return backed by improving earnings, not just confidence.
Analyst rankings
earnings predictability
85 / 100
This score says the business has usually been readable. In human-speak, analysts trust the model more than they trust the current profit trend.
risk rank
2
Risk rank 2 means this has historically behaved safer than most stocks. That is balance-sheet comfort, not a promise that earnings pain is over.
price stability
85 / 100
The stock has been steadier than the income statement. Welcome to a market that is underwriting recovery before it is fully visible.
source: institutional data
Institutional activity
institutional ownership data for MGRC is being compiled.
source: institutional data
Price targets
3-5 year target range
n/a
n/a
$115
current price
n/a
target midpoint · n/a from current
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