McGrath RentCorp (NASDAQ:MGRC) Releases Quarterly Earnings Results, Misses Expectations By $0.10 EPS

McGrath RentCorp (NASDAQ:MGRC) posted its earnings results on Wednesday. The financial services provider reported $1.37 earnings per share (EPS) for the quarter, missing the consensus estimate of $1.47 by ($0.10), FiscalAI reports. McGrath RentCorp had a return on equity of 12.84% and a net margin of 16.38%.The firm had revenue of $221.11 million for the quarter, compared to analysts’ expectations of $236.51 million.

Here are the key takeaways from McGrath RentCorp’s conference call:

• Rental operations revenue increased 6% year over year, led by Mobile Modular and TRS-RenTelco. Mobile Modular utilization improved sequentially for the first time since 2022, while units on rent rose for four consecutive months.
• TRS-RenTelco remained a major growth driver, with rental revenue up 17%, adjusted EBITDA up 29%, utilization reaching 68.9%, and strong demand from data centers, aerospace and defense, and semiconductor customers. The company raised planned rental-equipment CapEx to support continued growth.
• Total revenue fell 6% to $221 million and adjusted EBITDA declined 4% to $83 million, primarily because lower Mobile Modular and Enviroplex sales offset rental growth. Enviroplex revenue dropped to $4.6 million from $19.9 million due to project completions shifting into the second half.
• Portable Storage continued to face weak demand in smaller local commercial construction markets, with flat rental revenue, utilization declining to 58.3%, and adjusted EBITDA down 23%. Management does not expect a meaningful non-residential construction recovery this year.
• The company maintained the midpoints of its 2026 revenue and adjusted EBITDA outlook, now forecasting revenue of $955 million to $985 million and adjusted EBITDA of $363 million to $375 million. Gross rental-equipment CapEx increased to $200 million to $220 million, while net leverage remained moderate at 1.65 times adjusted EBITDA.

McGrath RentCorp Stock Down 2.5%

Shares of NASDAQ MGRC opened at $117.00 on Thursday. The firm has a 50-day simple moving average of $115.46 and a 200-day simple moving average of $113.36. The stock has a market capitalization of $2.87 billion, a price-to-earnings ratio of 18.57, a price-to-earnings-growth ratio of 1.22 and a beta of 0.43. McGrath RentCorp has a 52 week low of $94.99 and a 52 week high of $128.33.

McGrath RentCorp Announces Dividend

The firm also recently announced a quarterly dividend, which will be paid on Friday, July 31st. Stockholders of record on Friday, July 17th will be given a $0.495 dividend. This represents a $1.98 dividend on an annualized basis and a dividend yield of 1.7%. The ex-dividend date is Friday, July 17th. McGrath RentCorp’s dividend payout ratio is 31.43%.

Key Headlines Impacting McGrath RentCorp

Here are the key news stories impacting McGrath RentCorp this week:

• Positive Sentiment: Rental operations revenue increased 6% year over year to $172.5 million, while TRS-RenTelco rental revenue rose 17% to $31.8 million, supporting the company’s recurring-revenue strategy. McGrath RentCorp Q2 revenue falls 6 percent to $221.1 million
• Positive Sentiment: McGrath raised planned 2026 gross rental capital expenditures to $200 million–$220 million, signaling confidence in rental demand and future fleet expansion. It maintained full-year revenue guidance of $955 million–$985 million and adjusted EBITDA guidance of $363 million–$375 million. McGrath outlines 2026 revenue and capital expenditure outlook
• Neutral Sentiment: The quarterly dividend remained $0.495 per share. Full-year revenue guidance is broadly in line with the approximately $967 million analyst consensus, limiting the significance of the outlook change. McGrath Announces Results for Second Quarter 2026
• Negative Sentiment: Second-quarter EPS was $1.37, below the $1.46–$1.47 consensus estimate, while revenue fell 6% to $221.1 million versus expectations near $236.5 million. Net income declined to $33.7 million from $36.0 million a year earlier. McGrath misses second-quarter earnings and revenue estimates
• Negative Sentiment: Sales revenue dropped 34% to $46.4 million, and income from operations decreased 7% to $53.3 million, with lower gross profit on sales weighing on results. Reported insider activity was also heavily tilted toward selling, with no insider purchases and 13 sales over the past six months. McGrath RentCorp second-quarter earnings call highlights

Insider Activity at McGrath RentCorp

In related news, Director Joseph F. Hanna sold 7,500 shares of McGrath RentCorp stock in a transaction that occurred on Wednesday, July 1st. The stock was sold at an average price of $120.64, for a total transaction of $904,800.00. Following the transaction, the director owned 151,549 shares in the company, valued at approximately $18,282,871.36. This trade represents a 4.72% decrease in their ownership of the stock. The sale was disclosed in a filing with the SEC, which can be accessed through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CAO David M. Whitney sold 3,783 shares of the business’s stock in a transaction on Wednesday, June 10th. The stock was sold at an average price of $113.65, for a total value of $429,937.95. Following the transaction, the chief accounting officer directly owned 6,533 shares in the company, valued at $742,475.45. This trade represents a 36.67% decrease in their position. The disclosure for this sale is available in the SEC filing. Insiders have sold 30,051 shares of company stock worth $3,486,240 in the last 90 days. 1.40% of the stock is owned by insiders.

Institutional Inflows and Outflows

Several institutional investors and hedge funds have recently modified their holdings of the company. EverSource Wealth Advisors LLC grew its holdings in shares of McGrath RentCorp by 767.7% in the second quarter. EverSource Wealth Advisors LLC now owns 269 shares of the financial services provider’s stock valued at $31,000 after purchasing an additional 238 shares during the period. Danske Bank A S purchased a new position in McGrath RentCorp during the third quarter worth about $47,000. Strs Ohio acquired a new position in McGrath RentCorp in the 1st quarter valued at about $56,000. Voleon Capital Management LP acquired a new position in McGrath RentCorp in the 3rd quarter valued at about $204,000. Finally, Neuberger Berman Group LLC grew its stake in shares of McGrath RentCorp by 6.9% in the 4th quarter. Neuberger Berman Group LLC now owns 1,948 shares of the financial services provider’s stock valued at $204,000 after buying an additional 126 shares during the period. Institutional investors and hedge funds own 92.05% of the company’s stock.

Wall Street Analyst Weigh In

Separately, Weiss Ratings raised McGrath RentCorp from a “hold (c)” rating to a “hold (c+)” rating in a report on Tuesday. Two investment analysts have rated the stock with a Buy rating and two have given a Hold rating to the company’s stock. According to MarketBeat.com, the stock currently has a consensus rating of “Moderate Buy” and an average price target of $141.50.

McGrath RentCorp Company Profile

McGrath RentCorp, through its subsidiaries, provides rental, sales, and servicing of equipment for commercial, industrial, environmental, and residential markets. The company operates primarily through two segments—mobile storage and water management—offering flexible solutions for customers requiring on-site storage, water transport, treatment, and dewatering services.

In its mobile storage segment, McGrath RentCorp supplies portable storage containers and modular office units to sectors including construction, retail, government, and disaster restoration.