A strong technical breakout pattern and best-in-class operating margins support the bull case, but soft growth and a recent run of alternating earnings misses introduce enough uncertainty to keep the position sized conservatively relative to the 10.8% headroom to target.
Thesis pillars
- Best In Class Operating Margins→Stable
- Technical Breakout Setup→Stable
- Alternating Earnings Miss Pattern→Stable
- +1 more pillar — see the Why tab for full reasoning
McGrath RentCorp (MGRC) Stock Analysis
Industrials · Rental & Leasing Services
Sell if holding. Momentum 2.0/10 is below the 5.0 floor at $110.50 — engine's falling-knife protection flags exit rather than catching a breakdown. Specifics: Consecutive earnings misses (3); Sector modifier (Industrials): -0.7.
McGrath RentCorp is a California-based business-to-business rental company with four segments: Mobile Modular (relocatable modular buildings), Portable Storage (steel containers), TRS-RenTelco (electronic test equipment), and Enviroplex (modular classroom manufacturing for... Read more
Sell if holding. Momentum 2.0/10 is below the 5.0 floor at $110.50 — engine's falling-knife protection flags exit rather than catching a breakdown. Specifics: Consecutive earnings misses (3); Sector modifier (Industrials): -0.7. Chart setup: No clear chart pattern; technical signals are mixed. Score 4.7/10, moderate confidence.
Passes 7/8 gates (favorable risk/reward ratio, clean insider activity, no SEC red flags, news events none recent, earnings proximity 48d clear, semi cycle peak clear, materials cycle peak clear). Fails on weak momentum. Suitability: aggressive.
About McGrath RentCorp
About McGrath RentCorp
McGrath RentCorp rents and sells relocatable modular buildings, portable steel storage containers, and electronic test equipment through three rental divisions, plus manufactures modular classrooms via its Enviroplex segment, with 1,306 employees as of December 31, 2025. Mobile Modular owned 41,722 modulars with aggregate cost of $1,485.8 million at year-end; fleet utilization stood at 70.7% at December 31, 2025 and averaged 73.0% across the full year. Rentals and sales to public K-12 schools represented 25% of consolidated rental and sales revenues in 2025, up from 18% in 2023.
McGrath RentCorp's rental model recovers the original investment quickly: Mobile Modular recoups its outlay in approximately four years, portable storage containers in roughly three years, and electronic test equipment in about three years. Educational customers accounted for 27% of Mobile Modular rental revenues in 2025, with California as the largest educational market for both Mobile Modular and Enviroplex, driven by shifting school populations, insufficient construction funding, and class-size reduction programs. Mobile Modular purchased 27% of its new modular units from one manufacturer during 2025; the company acknowledges that losing a primary manufacturer could result in higher prices and longer lead times until other manufacturers increase capacity. TRS-RenTelco operates from a single U.S.-based facility, and all three rental segments extend 30-day payment terms with per-transaction credit evaluation.
Show full overview
The K-12 educational market accounted for 34% of combined modular rental and sales revenues in 2025, with California as the largest single market. School facility funding depends on bond measures, operating budgets, developer fees, and lottery funds, and the filing cautions there is no certainty on the timing of bond sales and it could take additional years before projects generate meaningful demand for relocatable classrooms. On February 5, 2026, the company announced the pending retirement of CEO Joseph Hanna effective April 3, 2026, with COO Philip Hawkins appointed as successor — a transition the 10-K identifies as an operational risk that could divert management attention during the changeover.
See also: Industrials · Rental & Leasing Services
From McGrath RentCorp's most recent 10-K filing, extracted June 11, 2026.
Recent developments
updated 2026-09-04Recent Developments — McGrath RentCorp
Latest news
- NEWS McGrath RentCorp (NASDAQ:MGRC) Releases Earnings Results, Misses Expectations By $0.10 EPS - MarketBeat — MarketBeat negative
- NEWS McGrath RentCorp (NASDAQ:MGRC) Releases Earnings Results, Misses Expectations By $0.10 EPS - marketbeat.com — marketbeat.com negative
- NEWS McGrath RentCorp Q2 revenue falls 6 percent to $221.1 million - Quiver Quantitative — Quiver Quantitative negative
- NEWS McGrath RentCorp Q2 revenue falls 6 percent to $221.1 million - quiverquant.com — quiverquant.com negative
- NEWS McGrath RentCorp (MGRC) Financial Health: Profitability & Balance Sheet Analysis - TradingKey — TradingKey neutral
Generated 2026-09-04T13:27:38Z.
Upcoming dated catalysts
Thesis
Key Metrics
Quality Signals
Options Flow
Concentration Risks(10-K Item 1A)
- MEDIUMSuppliersingle modular manufacturer27%10-K Item 1: 'During 2025, Mobile Modular purchased 27% of its new modular units from one manufacturer.'
- MEDIUMCustomerK-12 public schools25%10-K Item 1: 'Rentals and Sales to Public Schools (K-12) ... Consolidated Rental and Sales Revenues 1 ... 25%'
- MEDIUMGeographicCalifornia10-K Item 1A: 'a significant portion of our business is conducted in California'
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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Rating Breakdown
3 floor-breakers·1 ceiling hit
Revenue shrinking — -6.2% YoY. Growth thesis broken unless recovery story develops.static
Price action weak — below key moving averages, no momentum carry. Needs a base before trend-continuation setups apply.static
No near-term catalyst priced in. Thesis progression will come from fundamentals grinding, not event reaction.static
Price Targets
Position Sizing
Risk Alerts
Earnings
Verdict History
Frequently Asked Questions
Sell if holding. Momentum 2.0/10 is below the 5.0 floor at $110.50 — engine's falling-knife protection flags exit rather than catching a breakdown. Specifics: Consecutive earnings misses (3); Sector modifier (Industrials): -0.7. Chart setup: No clear chart pattern; technical signals are mixed. Prior stop was $105.51. Score 4.7/10, moderate confidence.
Take-profit target: $126.50 (+15.1% upside). Prior stop was $105.51. Stop-loss: $105.51.
Sector modifier (Industrials): -0.7; Consecutive earnings misses (3); Weak overall score: 4.7/10.
McGrath RentCorp trades at a P/E of 17.6 (forward 15.8). TrendMatrix value score: 7.1/10. Verdict: Sell.
9 analysts cover MGRC with a consensus score of 4.2/5. Average price target: $145.
What does McGrath RentCorp do?McGrath RentCorp is a California-based business-to-business rental company with four segments: Mobile Modular...
McGrath RentCorp is a California-based business-to-business rental company with four segments: Mobile Modular (relocatable modular buildings), Portable Storage (steel containers), TRS-RenTelco (electronic test equipment), and Enviroplex (modular classroom manufacturing for California). Revenue comes from renting and selling equipment, with 1,306 employees as of December 31, 2025 and a Mobile Modular fleet of 41,722 units at aggregate cost of $1,485.8 million.