Mcgrath Rentcorp engages in the rental and sale of relocatable modular buildings, electronic test equipment, and liquid and solid containment tanks and boxes in the United States and internationally. The company was founded in 1979 and is based in Livermore, California.
MGRC Price Forecast Based on DCF Valuation
DCF Fair Value Target:
Below please find a table outlining a discounted cash flow forecast for MGRC, in which we model out valuation assuming a variety of terminal growth rates. To summarize, we found that Mcgrath Rentcorp ranked in the 75th percentile in terms of potential gain offered. Specifically, our DCF analysis implies the stock is trading below its fair value by an estimated 371.5%. As for the metrics that stood out in our discounted cash flow analysis of Mcgrath Rentcorp, consider:
The compound growth rate in the free cash flow of Mcgrath Rentcorp over the past 4.75 years is 0.53%; that's better than 83.24% of cash flow producing equities in the Industrials sector, where it is classified.
MGRC's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 2%; for context, that number is higher than 26.35% of tickers in our DCF set.
Mcgrath Rentcorp's interest coverage rate -- a measure of gross earnings relative to interest payments -- comes in at 13.47. This coverage rate is greater than that of 82.5% of stocks we're observing for the purpose of forecasting via discounted cash flows.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
Want more companies with a valuation profile/forecast similar to that of Mcgrath Rentcorp? See AIT, ASGN, RCII, USDP, and CVEO.
To date in 2020, the focus at most companies has shifted to trying to survive and recover from the COVID-19 pandemic. It seems other news tends to get shifted to the back burner. Such is the case for McGrath RentCorp (MGRC). Certainly, McGrath, too, is traversing a rocky path due...
Before we begin, note that the matters that company management will be discussing today that are not statements of historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding our third quarter 2020 financial outlook, as well as statements relating to the company's expectations, strategies, prospects or targets. Thank you, Catherine.