One-glance verdict
Not enough data
Fair value unavailable
Not enough cash-flow history to value this one with our method.
Fundamentals snapshot
Custom Truck One Source, Inc.
CTOS · NYQ · Industrials · Rental & Leasing Services
Current price
$10.60
52-week range
$5.18 - $12.23
Market cap
$2.41B
Balance sheet
Distressed
0.90x Concerning
Net debt $2.49B. Interest coverage shows how many times profit covers the interest bill.
What stands out
2 Rewards
2 Risks
2 rewards · 2 risks
- Reward Revenue grew 5.4% last year.
- Reward Returns 3.7% on equity, ahead of 20% of its peers.
- Risk Stock trades 136.6% above its 5-year average P/E.
- Risk Net debt grew 33.0% over 3 years.
What this company does
Custom Truck One Source, Inc.
Custom Truck One Source (CTOS) rents and sells specialized trucks and equipment, like aerial lifts and dump trucks, to industries that build and maintain things like power lines and cell towers. The money mostly comes from renting out this heavy equipment and from selling new and used trucks and parts, which is important because consistent rental income helps the company's earnings stability. They also offer maintenance and repair services, adding another way they make money from their customer relationships.
How the company got here
Custom Truck One Source, Inc. has a history rooted in family entrepreneurship, starting in 1996 as Custom Truck Sales with a focus on pre-owned trucks and equipment. Over the years, it grew through strategic acquisitions and organic expansion, eventually merging with Nesco Holdings in 2021 to become the publicly traded company it is today. This consolidation aimed to create a comprehensive 'one-stop-shop' for specialized equipment needs across North America. The company's journey reflects a strategy of integrating various businesses to offer a wider range of services and equipment, positioning itself as a major player in the infrastructure support sector.
What it actually does
Custom Truck One Source provides essential equipment and services for industries that build and maintain critical infrastructure, like power lines, telecommunications networks, and railways. Think of them as a specialized rental and sales company for the heavy-duty machinery that utility and construction crews use. They offer everything from renting out specific trucks and equipment to selling new and used machinery, and even providing the necessary parts and repair services to keep everything running smoothly. Their goal is to be the go-to provider for any equipment-related need these industries have.
Specialty Equipment Rentals (SER)
This is the core rental business where customers can lease specialized trucks and heavy equipment for specific projects. This segment includes a wide variety of machinery such as aerial lifts (like cherry pickers), cranes, service trucks, dump trucks, and digger derricks, which are essential for tasks like utility line maintenance, construction, and telecommunications build-outs. By renting equipment, companies can access the tools they need without the large upfront cost of purchasing them, paying only for the time they use the equipment. This segment is a significant part of Custom Truck's overall operations, providing a steady stream of revenue through ongoing rental agreements.
Specialty Truck Equipment and Manufacturing (STEM)
This segment focuses on the production and sale of specialized trucks and equipment, as well as the sale of used rental equipment. Custom Truck manufactures and customizes equipment, including truck bodies and attachments, to meet specific customer requirements. They also sell new and used trucks and machinery directly to customers who prefer to own their equipment. This part of the business leverages their manufacturing capabilities and expertise to provide 'work-ready' solutions, catering to clients who need specialized vehicles for immediate deployment in industries like utilities and telecommunications.
Aftermarket Parts and Services (APS)
This segment provides crucial support for the equipment the company rents and sells, as well as for equipment owned by their customers. It involves selling specialized parts, tools, and accessories needed to operate and maintain the machinery. Additionally, they offer maintenance, repair, and customization services to ensure the equipment remains in optimal working condition. This 'aftermarket' business is vital because it generates recurring revenue and strengthens customer relationships by offering ongoing support, helping to maximize the lifespan and performance of the equipment.
What management is betting on now
Custom Truck One Source's management is focused on leveraging its 'one-stop-shop' model to capture more of the infrastructure development and maintenance market. They are investing in expanding their manufacturing capabilities and rental fleet to meet growing demand, particularly in areas like utility and telecommunications infrastructure upgrades. The strategy involves integrating their rental, sales, and aftermarket services to provide a seamless customer experience, aiming for sustained growth by being the go-to provider for specialized equipment needs across North America.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
Revenue
$495.22M
Net income
$2.31M
Diluted EPS
0.01
Operating cash flow
$163.47M
Free cash flow
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Sources
Revenue
$563.45M
Net income
$10.40M
Diluted EPS
0.05
Operating cash flow
$44.37M
Free cash flow
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Sources
Revenue
$461.62M
Net income
$-4.10M
Diluted EPS
-0.02
Operating cash flow
$23.82M
Free cash flow
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Sources
Revenue
$528.18M
Net income
$20.88M
Diluted EPS
0.10
Operating cash flow
$47.31M
Free cash flow
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Sources
Revenue
$482.06M
Net income
$-5.76M
Diluted EPS
-0.03
Operating cash flow
$81.45M
Free cash flow
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Sources
Revenue
$511.48M
Net income
$-28.38M
Diluted EPS
-0.13
Operating cash flow
$125.72M
Free cash flow
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Sources
Revenue
$422.23M
Net income
$-17.79M
Diluted EPS
-0.08
Operating cash flow
$55.63M
Free cash flow
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Sources
Revenue
$520.74M
Net income
$27.57M
Diluted EPS
0.11
Operating cash flow
$82.05M
Free cash flow
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Sources
Is it cheap or expensive?
Fair value — vs current price $10.60
We couldn't calculate a fair value right now.
Is it drowning in debt?
Distressed
Net debt $2.5B. Interest coverage 0.9x.
Net debt
$2.49B
Interest coverage
0.90x
Custom Truck One Source, Inc.'s profit covers its interest bill about 0.9 times over. which is weaker than most peers shown here.
Distressed
Worse cushion
Baseline
Better cushion
CTOS
BASELINE
Custom Truck One Source, Inc.
Total debt $2.50B Interest coverage 0.90x This is the baseline the peer rows are being compared against.
Total debt $9.63B Interest coverage 1.50x +66% vs CTOS Carries about 1.7x more debt cushion than CTOS.
Total debt $4.81B Interest coverage 1.04x +16% vs CTOS Carries about 1.2x more debt cushion than CTOS.
Total debt $12.07B Interest coverage 1.36x +52% vs CTOS Carries about 1.5x more debt cushion than CTOS.
Total debt $618.26M Interest coverage 7.96x +786% vs CTOS Carries about 8.9x more debt cushion than CTOS.
What you should know
The case for and against CTOS
2 Rewards
2 Risks
Rewards
-
Revenue grew 5.4% last year.
-
Returns 3.7% on equity, ahead of 20% of its peers.
Risks
-
Stock trades 136.6% above its 5-year average P/E.
-
Net debt grew 33.0% over 3 years.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
81.54x
Forward P/E
32.45x
P/B
2.93x
P/S
1.18x
EV/EBITDA
20.48x
PEG ratio
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Profitability
How much profit each dollar creates
Gross margin
22.6%
Operating margin
9.4%
Net margin
1.4%
ROE
3.7%
ROA
3.3%
Health
Liquidity and balance-sheet strength
Debt / equity
3.05x
Current ratio
1.28x
Quick ratio
0.23x
Total debt
$2.50B
Total cash
$14.56M
Growth
How the business has been compounding
Revenue TTM
$2.05B
Revenue 5Y CAGR
13.6%
EPS TTM
0.13
EPS 5Y CAGR
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Cash flow
How much cash the business throws off
Operating CF TTM
$278.97M
Free CF TTM
$-146.87M
FCF margin
-7.2%
Dividend
Shareholder payout
Yield
0.0%
Payout ratio
0.0%
Last ex-div date
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