📊 MGRC Key Takeaways
Is Mcgrath Rentcorp (MGRC) a Good Investment?
McGrath RentCorp demonstrates solid operational profitability with 48.8% gross margins and 21.9% operating margins, supported by a conservative balance sheet (0.24x debt/equity) and positive free cash flow generation. However, exceptionally low return metrics (ROE 2.2%, ROA 1.1%) reveal capital inefficiency, while the 32.7% EPS decline despite 3.7% revenue growth signals shareholder value deterioration.
McGrath RentCorp shows strong underlying fundamentals with high gross, operating, and net margins, solid returns on capital, and robust free cash flow generation. The balance sheet appears healthy with modest leverage and good interest coverage, supporting resilience, though flat net income and a sharp diluted EPS decline suggest earnings quality and capital allocation should be watched closely.
Why Buy Mcgrath Rentcorp Stock? MGRC Key Strengths
- Conservative leverage at 0.24x debt/equity with 6.7x interest coverage provides financial stability
- Strong operational profitability with 21.9% operating margin and 48.8% gross margin
- Positive free cash flow generation of $34.3M with 17.3% FCF margin demonstrates cash-generating capability
- High profitability with 48.2% gross margin, 25.8% operating margin, and 16.6% net margin
- Strong cash generation with $255.68M operating cash flow and $211.30M free cash flow
- Conservative leverage profile with 0.24x debt-to-equity and 8.0x interest coverage
MGRC Stock Risks: Mcgrath Rentcorp Investment Risks
- Critically low return metrics (ROE 2.2%, ROA 1.1%) indicate poor capital deployment efficiency on $2.4B asset base
- EPS declined 32.7% YoY despite revenue growth, signaling shareholder dilution or hidden cost pressures
- Minimal cash balance of $2.4M relative to total assets of $2.4B creates liquidity vulnerability
- Revenue growth is modest at 3.7% YoY, limiting evidence of strong expansion momentum
- Net income was flat year over year, indicating profit growth has slowed
- Diluted EPS fell 32.7% YoY, which raises concern about share count changes or other earnings dilution factors
Key Metrics to Watch
- Return on Equity trend - must improve from 2.2% baseline to validate capital efficiency
- EPS trajectory - critical to confirm stabilization and resumed growth aligned with revenue
- Free Cash Flow conversion ratio - monitor ability to sustain 17%+ FCF margins in growth scenarios
- Revenue growth versus net income growth
- Diluted EPS trend and share count behavior
Mcgrath Rentcorp (MGRC) Financial Metrics & Key Ratios
💡 AI Analyst Insight
The current ratio below 1.0x warrants monitoring of short-term liquidity.
MGRC Profit Margin, ROE & Profitability Analysis
MGRC vs Industrial Sector: How Mcgrath Rentcorp Compares
How Mcgrath Rentcorp compares to Industrial sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is Mcgrath Rentcorp Stock Overvalued? MGRC Valuation Analysis 2026
Based on fundamental analysis, Mcgrath Rentcorp has mixed fundamental signals relative to the Industrial sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
Mcgrath Rentcorp Balance Sheet: MGRC Debt, Cash & Liquidity
MGRC Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: Mcgrath Rentcorp's revenue has grown significantly by 61% over the 5-year period, indicating strong business expansion. The most recent EPS of $7.12 reflects profitable operations.
MGRC Revenue Growth, EPS Growth & YoY Performance
MGRC Quarterly Earnings & Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q1 2026 | $195.4M | $27.0M | $1.10 |
| Q3 2025 | $256.4M | $20.6M | $1.72 |
| Q2 2025 | $212.6M | $20.6M | $0.84 |
| Q1 2025 | $187.8M | $22.8M | $0.93 |
| Q3 2024 | $243.5M | $20.6M | $1.65 |
| Q2 2024 | $203.0M | $20.6M | $0.84 |
| Q1 2024 | $163.7M | $22.8M | $0.93 |
| Q3 2023 | $174.3M | $18.8M | $1.25 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
Mcgrath Rentcorp Dividends, Buybacks & Capital Allocation
MGRC SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for Mcgrath Rentcorp (CIK: 0000752714)
📋 Recent SEC Filings
❓ Frequently Asked Questions about MGRC
What is the AI rating for MGRC?
Mcgrath Rentcorp (MGRC) has a Combined AI Rating of BUY from Claude (HOLD) and ChatGPT (BUY) with 80% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are MGRC's key strengths?
Claude: Conservative leverage at 0.24x debt/equity with 6.7x interest coverage provides financial stability. Strong operational profitability with 21.9% operating margin and 48.8% gross margin. ChatGPT: High profitability with 48.2% gross margin, 25.8% operating margin, and 16.6% net margin. Strong cash generation with $255.68M operating cash flow and $211.30M free cash flow.
What are the risks of investing in MGRC?
Claude: Critically low return metrics (ROE 2.2%, ROA 1.1%) indicate poor capital deployment efficiency on $2.4B asset base. EPS declined 32.7% YoY despite revenue growth, signaling shareholder dilution or hidden cost pressures. ChatGPT: Revenue growth is modest at 3.7% YoY, limiting evidence of strong expansion momentum. Net income was flat year over year, indicating profit growth has slowed.
What is MGRC's revenue and growth?
Mcgrath Rentcorp reported revenue of $198.5M.
Does MGRC pay dividends?
Mcgrath Rentcorp pays dividends, with $12.5M distributed to shareholders in the trailing twelve months.
Where can I find MGRC SEC filings?
Official SEC filings for Mcgrath Rentcorp (CIK: 0000752714) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is MGRC's EPS?
Mcgrath Rentcorp has a diluted EPS of $1.10.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined rating reflects both perspectives for balanced insights.
Is MGRC a good stock to buy right now?
Based on our AI fundamental analysis in May 2026, Mcgrath Rentcorp has a BUY rating with 80% confidence. The AI analysis suggests favorable fundamentals based on SEC filings. This is not investment advice.
Is MGRC stock overvalued or undervalued?
Valuation metrics for MGRC: ROE of 2.2% (sector avg: 15%), net margin of 13.6% (sector avg: 10%). Compare these metrics with sector averages to assess valuation.
Should I buy MGRC stock in 2026?
Our dual AI analysis gives Mcgrath Rentcorp a combined BUY rating for 2026. Revenue is data pending, with profitability above sector average. Always conduct your own research.
What is MGRC's free cash flow?
Mcgrath Rentcorp's operating cash flow is $42.4M, with capital expenditures of $8.0M. FCF margin is 17.3%.
How does MGRC compare to other Industrial stocks?
Vs Industrial sector averages: Net margin 13.6% (avg: 10%), ROE 2.2% (avg: 15%), current ratio N/A (avg: 1.8).