📊 MGRC Key Takeaways
Is MGRC a Good Investment? Thesis Analysis
McGrath RentCorp demonstrates solid operational efficiency with a 25.8% operating margin and strong free cash flow generation of $211.3M (22.4% FCF margin), indicating robust cash conversion from operations. The company maintains a conservative capital structure (0.24x Debt/Equity) with healthy interest coverage of 8.0x, providing financial flexibility despite modest revenue growth of 3.7% YoY and flat net income performance.
Why Buy MGRC? Key Strengths
- Strong operating margins at 25.8% and gross margins at 48.2%, indicating pricing power and operational efficiency
- Excellent free cash flow generation of $211.3M with 22.4% FCF margin, demonstrating high-quality earnings conversion
- Conservative leverage with 0.24x Debt/Equity ratio and 8.0x interest coverage, providing financial stability
- Substantial asset base of $2.4B with equity cushion of $1.2B, supporting sustainable business model
MGRC Investment Risks to Consider
- Revenue growth decelerating at only 3.7% YoY with flat net income, suggesting market maturity or competitive pressures
- Diluted EPS declined 32.7% YoY despite stable net income, indicating share dilution or unfavorable capital allocation
- High capital intensity of business (44.4M CapEx) requires continuous reinvestment to maintain fleet competitiveness
- Minimal cash balance of $295K relative to $2.4B assets suggests tight working capital management and refinancing reliance
Key Metrics to Watch
- Revenue growth acceleration and market share trends in equipment rental sector
- Operating cash flow sustainability and free cash flow margin maintenance above 20%
- Capital expenditure trends and ROA improvement trajectory
- Debt levels and leverage ratios to ensure financial flexibility preservation
MGRC Financial Metrics
💡 AI Analyst Insight
The 22.4% free cash flow margin provides substantial flexibility for dividends, buybacks, and strategic investments. The current ratio below 1.0x warrants monitoring of short-term liquidity.
MGRC Profitability Ratios
MGRC vs Default Sector
How MCGRATH RENTCORP compares to Default sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is MGRC Overvalued or Undervalued?
Based on fundamental analysis, MCGRATH RENTCORP has mixed fundamental signals relative to the Default 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.
MGRC Balance Sheet & Liquidity
MGRC 5-Year Financial Trend & Growth Analysis
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 Growth Metrics (YoY)
MGRC Quarterly Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| 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 |
| Q2 2023 | $153.4M | $18.8M | $1.07 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
MGRC Capital Allocation
MGRC SEC 10-K & 10-Q Filing 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 an AI rating of BUY with 78% confidence, based on fundamental analysis of SEC EDGAR filings.
What are MGRC's key strengths?
Claude: Strong operating margins at 25.8% and gross margins at 48.2%, indicating pricing power and operational efficiency. Excellent free cash flow generation of $211.3M with 22.4% FCF margin, demonstrating high-quality earnings conversion.
What are the risks of investing in MGRC?
Claude: Revenue growth decelerating at only 3.7% YoY with flat net income, suggesting market maturity or competitive pressures. Diluted EPS declined 32.7% YoY despite stable net income, indicating share dilution or unfavorable capital allocation.
What is MGRC's revenue and growth?
MCGRATH RENTCORP reported revenue of $944.2M.
Does MGRC pay dividends?
MCGRATH RENTCORP pays dividends, with $47.9M 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 $6.35.
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 April 2026, MCGRATH RENTCORP has a BUY rating with 78% 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 12.6% (sector avg: 15%), net margin of 16.6% (sector avg: 12%). 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 $255.7M, with capital expenditures of $44.4M. FCF margin is 22.4%.
How does MGRC compare to other Default stocks?
Vs Default sector averages: Net margin 16.6% (avg: 12%), ROE 12.6% (avg: 15%), current ratio N/A (avg: 1.8).