Valens Equity Weekly Insights and Inflections for April 5, 2022

April 5, 2022

  • United Rentals (URI) has consolidated its way to the top spot in the equipment rental industry about to benefit from strong macro tailwinds. Uniform Accounting shows how profitable the business is, and it shows that the market’s expectations are far too bearish. That makes United Rentals a compelling buy.
  • United Rentals has acquired its way to a 15% market share in the equipment rentals industry. After expanding into specialty rentals, it has consistently generated 12%-15% Uniform ROA while consistently growing 9%+. We are likely staring a multi-year capex cycle that will directly benefit United Rentals’ business, and yet the market expects both returns and growth to fade to multi-year lows.
  • United Rentals’ management team is aligned to focus on growth, margins, and turns, the three drivers of profitability. This is great alignment for the business.
  • Management’s confidence in the Q4 earnings call about infrastructure spending coming online, strong revenue growth, and cost management highlight that management is executing to perfection.

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