Rental & Leasing Services
Updated on July 1, 2024, by Mark Pukhov
Custom Truck One Source, Inc. (previously known as Nesco Holdings, Inc.) doesn't have a long enough track record of performance and hasn't performed well since the IPO.
Given its recent performance improvements, it is worthwhile to investigate whether the company is trading at a discount and whether it is worth purchasing.
The company's trailing PE ratio as of June 9, 2024, is 51.15. It's much higher than the rental and leasing services industry's average PE (12.08), as well as other industries.
Currently, the trailing EPS for CTOS is $0.09, but experts expect the company's EPS to be around -0.02 in the next quarter, despite the construction season peak.
As of now, trailing ROE and ROA are 2.51% and 0.69%, respectively, a bit lower than what the company showed in 2022-2023, mostly due to the losses suffered in the first quarter.
Custom Truck One Source, Inc.'s P/B ratio is currently 1.25 (mrq), lower than the rental and leasing services industry average of 2.11, and is considered good.
The P/S ratio is also lower than the industry average of 1.51, currently 0.62. Experts look for a ratio below 1, so the company's current P/S ratio is considered good.
According to the Alpha Spread intrinsic value calculator, CTOS intrinsic value is currently 9.98 USD, which is 53% undervalued compared to its current market price of 4.68 USD.
As you can see, Custom Truck One Source, Inc.'s stock trades at a discount to its sales and intrinsic value, but its stock price is excessively high compared to its earnings.
In my opinion, it is better to avoid buying shares of this company, wait until its financial history reaches 10 years, assess the company again, and then make decisions.