An analyst at Baird, Justin Hauke, has revised the price target for Custom Truck One Source (CTOS, Financial), bringing it down to $4.40 from the earlier target of $5. The decision to adjust this target followed the company's first-quarter performance, which saw earnings and revenue fail to meet expectations. Despite these misses, the company's guidance remains unchanged. The analyst maintains a Neutral rating on CTOS shares.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 5 analysts, the average target price for Custom Truck One Source Inc (CTOS, Financial) is $6.40 with a high estimate of $9.00 and a low estimate of $5.00. The average target implies an upside of 58.81% from the current price of $4.03. More detailed estimate data can be found on the Custom Truck One Source Inc (CTOS) Forecast page.
Based on the consensus recommendation from 6 brokerage firms, Custom Truck One Source Inc's (CTOS, Financial) average brokerage recommendation is currently 2.3, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Custom Truck One Source Inc (CTOS, Financial) in one year is $7.81, suggesting a upside of 93.8% from the current price of $4.03. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Custom Truck One Source Inc (CTOS) Summary page.
CTOS Key Business Developments
Release Date: March 05, 2025
- Revenue: $521 million for Q4 2024.
- Adjusted Gross Profit: $168 million for Q4 2024.
- Adjusted EBITDA: $102 million for Q4 2024.
- Average Utilization: Just under 79% for Q4 2024, up from 73% in Q3 2024.
- Average OEC on Rent: Over $1.2 billion for Q4 2024, a 12% sequential increase.
- ERS Segment Revenue: $172 million for Q4 2024.
- TES Segment Revenue: Over $300 million for Q4 2024, up 18% sequentially.
- TES Full Year Revenue: Exceeded $1 billion for the first time, up almost 7% versus 2023.
- Adjusted Gross Margin for ERS: 61% for Q4 2024.
- Net Rental CapEx: $71 million for Q4 2024.
- APS Segment Revenue: $41 million for Q4 2024, up more than 6% year-over-year.
- Borrowings under ABL: $583 million at the end of 2024, a decrease of $45 million from Q3 2024.
- 2025 Revenue Guidance: Between $1.97 billion and $2.06 billion.
- 2025 Adjusted EBITDA Guidance: Between $370 million and $390 million.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Custom Truck One Source Inc (CTOS, Financial) achieved over $1 billion in annual sales for the first time, highlighting the resilience of its markets and adaptability to customer needs.
- The company experienced a strong improvement in utility-related demands, with significant growth in electricity demand driven by AI-driven data center development, grid upgrades, and electrification trends.
- Rental revenue increased by 15% sequentially in Q4, marking the second consecutive quarter of growth, and rental asset sales also improved by 13% from Q3.
- The TES segment saw a record quarterly revenue of over $300 million, up 18% sequentially, and full-year TES revenue exceeded $1 billion for the first time.
- Custom Truck One Source Inc (CTOS) successfully reduced its inventory by more than $150 million in Q4, contributing to improved inventory management and financial flexibility.
Negative Points
- Despite strong Q4 performance, there was some customer hesitation to buy, influenced by high interest rates and economic caution.
- The TES segment's gross margin was down year-over-year, impacted by mix and improved inventory levels across the broader industry.
- The company is closely monitoring developments involving tariffs and upcoming chassis emission regulations, which could impact operations.
- Custom Truck One Source Inc (CTOS) faces a headwind of approximately $4.5 million to $5 million annually due to incremental lease expenses from a sale-leaseback transaction.
- The ERS segment experienced a decline in revenue from $185 million in Q4 2023 to $172 million in Q4 2024, despite improvements in utilization and average OEC on rent.
