Latest news with #CTOS
Yahoo
14-05-2025
- Business
- Yahoo
CTOS Q1 Earnings Call: Revenue Miss Offset by Optimism for Full Year Growth
Heavy equipment distributor Custom Truck One Source (NYSE:CTOS) fell short of the market's revenue expectations in Q1 CY2025 as sales rose 2.7% year on year to $422.2 million. On the other hand, the company's full-year revenue guidance of $2.02 billion at the midpoint came in 2.1% above analysts' estimates. Its non-GAAP loss of $0.08 per share was 67% below analysts' consensus estimates. Is now the time to buy CTOS? Find out in our full research report (it's free). Revenue: $422.2 million vs analyst estimates of $435.5 million (2.7% year-on-year growth, 3% miss) Adjusted EPS: -$0.08 vs analyst expectations of -$0.05 (67% miss) Adjusted EBITDA: $73.43 million vs analyst estimates of $78.2 million (17.4% margin, 6.1% miss) The company reconfirmed its revenue guidance for the full year of $2.02 billion at the midpoint EBITDA guidance for the full year is $380 million at the midpoint, above analyst estimates of $375.9 million Operating Margin: 2.9%, down from 4.5% in the same quarter last year Free Cash Flow was -$56.3 million compared to -$89.93 million in the same quarter last year Backlog: $420.1 million at quarter end Market Capitalization: $1.03 billion Custom Truck One Source's first quarter results reflected mixed trends across its core end markets. Management emphasized that demand remained resilient in its rental segment, with CEO Ryan McMonagle highlighting a 13% year-over-year revenue increase in Equipment Rental Solutions (ERS) and record-high equipment on rent. However, the Truck and Equipment Sales (TES) segment experienced a slower start, only showing momentum late in the quarter. Management cited strong order flow and backlog growth as key supports for its outlook, while also acknowledging ongoing margin pressure due to product mix and industry-wide inventory improvements. Looking ahead, management reaffirmed its full-year revenue and EBITDA guidance, citing secular growth in electricity demand, ongoing federal infrastructure spending, and robust customer activity in core utility markets as drivers. CFO Christopher Eperjesy and CEO McMonagle stated that proactive inventory management and supplier strategies are expected to mitigate the impact of tariffs and regulatory shifts. However, management expressed caution regarding macroeconomic uncertainty and noted that inventory reduction will be weighted toward the second half of the year. Custom Truck One Source's management attributed the quarter's performance to continued rental demand, increased backlog, and proactive inventory moves in response to tariffs and regulatory shifts. Rental Demand Resilience: The ERS segment posted strong year-over-year revenue growth and utilization rates, driven by sustained activity among utility contractors and robust demand for fleet rentals. Backlog and Order Growth: TES segment backlog increased by 14% and net orders grew over 220% year-over-year, with record sales in March and positive order trends continuing into Q2, signaling improving sales momentum. Tariff Mitigation Strategies: Management detailed steps to manage exposure to changing U.S. tariffs, including pulling forward inventory purchases and working with suppliers to secure favorable pricing or shift production to the U.S. where practical. Segment Margin Pressures: TES and Aftermarket Parts and Service (ATS) segments saw gross margin compression due to product mix and higher material costs; management anticipates margin normalization later in the year as inventory and sales mix stabilize. Inventory and Cash Flow Focus: Inventory levels rose as part of a tactical response to external risks, but management plans for reductions in the second half of the year to support free cash flow and leverage targets. Management's outlook for 2025 is centered around sustained demand in core utility markets, proactive risk mitigation, and ongoing investment in fleet and inventory management. Utility Market Strength: Secular trends in electricity demand and infrastructure spending are expected to drive continued activity in the ERS segment, supporting both rental and sales growth. Tariff and Regulation Response: Strategies to manage tariff impacts and regulatory changes, including inventory pulls and supplier engagement, are designed to limit cost inflation and operational disruption. Cash Flow and Leverage Discipline: The company expects to reduce inventory in the second half of the year, which management believes will support positive free cash flow generation and progress toward its leverage reduction goals. Nicole Sheree (Deutsche Bank): Asked about the drivers of anticipated revenue acceleration. CEO McMonagle cited strong ERS demand and a growing TES backlog as supportive factors for improved performance in later quarters. Nicole Sheree (Deutsche Bank): Inquired about the impact of potential infrastructure project pauses. Management stated they have not seen delays reflected in customer orders or backlog, and highlighted customers' ability to pivot between rental and purchase. Tami Zakaria (JPMorgan): Sought clarification on tariff-related inventory moves. CEO McMonagle explained that forward inventory purchases were focused on mitigating expected chassis price increases and that supplier relationships are key to managing cost impacts. Tami Zakaria (JPMorgan): Asked about the timing of inventory reduction. Management replied that most reductions are expected in the second half of the year, following current elevated inventory levels. Brian Brophy (Stifel): Questioned rental rate trends and TES margin outlook. CFO Eperjesy indicated rental rates remain stable and that TES margins are expected to remain within the 15–18% range, with improvement projected as the year progresses. In the coming quarters, the StockStory team will monitor (1) whether Custom Truck One Source can maintain high utilization and order flow in ERS and TES, (2) signs of margin stabilization as inventory and product mix normalize, and (3) the company's progress in reducing inventory and net leverage as planned. The impact of evolving U.S. tariff and regulatory policies will also be a key area of focus. Custom Truck One Source currently trades at a forward P/E ratio of 63.8×. At this valuation, is it a buy or sell post earnings? Find out in our free research report. Donald Trump's victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs. While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years. Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
14-05-2025
- Business
- Yahoo
1 Mooning Stock on Our Watchlist and 2 to Keep Off Your Radar
The stocks featured in this article are seeing some big returns. Over the past month, they've outpaced the market due to new product launches, positive news, or even a dedicated social media following. However, not all companies with momentum are long-term winners, and many investors have lost money by following short-term trends. On that note, here is one stock we think lives up to the hype and two best left ignored. One-Month Return: +21% Started as a game studio by three friends in a Copenhagen apartment, Unity (NYSE:U) is a software as a service platform that makes it easier to develop and monetize new games and other visual digital experiences. Why Does U Give Us Pause? Products, pricing, or go-to-market strategy need some adjustments as its billings have averaged 10.2% declines over the last year Competitive market dynamics make it difficult to retain customers, leading to a weak 95.8% net revenue retention rate Competitive market means the company must spend more on sales and marketing to stand out even if the return on investment is low Unity is trading at $21.97 per share, or 5x forward price-to-sales. If you're considering U for your portfolio, see our FREE research report to learn more. One-Month Return: +24.9% Inspired by a family gas station, Custom Truck One Source (NYSE:CTOS) is a distributor of trucks and heavy equipment. Why Do We Avoid CTOS? Sales trends were unexciting over the last two years as its 4.6% annual growth was below the typical industrials company Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 29.2 percentage points Depletion of cash reserves could lead to a fundraising event that triggers shareholder dilution Custom Truck One Source's stock price of $4.56 implies a valuation ratio of 62.1x forward P/E. To fully understand why you should be careful with CTOS, check out our full research report (it's free). One-Month Return: +35.7% Best known for its wide assortment of user-generated content, Roblox (NYSE:RBLX) is an online gaming platform and game creation system. Why Should RBLX Be on Your Watchlist? Daily Active Users are rising, meaning the company can increase revenue without incurring additional customer acquisition costs if it can cross-sell additional products and features Marketing spend is minimal, showing it doesn't need advertisements to acquire new users because of its well-known brand Highly efficient business model is illustrated by its impressive 20.5% EBITDA margin At $77.25 per share, Roblox trades at 45.6x forward EV/EBITDA. Is now a good time to buy? Find out in our full research report, it's free. Donald Trump's victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs. While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years. Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today for free.
Yahoo
06-05-2025
- Business
- Yahoo
3 Stocks Under $10 Walking a Fine Line
Stocks trading in the $1-10 range are generally smaller players with less risk than their penny stock counterparts. But that doesn't mean the underlying businesses are cheap, and we advise caution as many have questionable fundamentals. The bad behavior exhibited by lower-quality companies in this space can spook even the most seasoned professionals, which is why we started StockStory - to separate the good from the bad. Keeping that in mind, here are three stocks under $10 to avoid and some other investments you should consider instead. Share Price: $8.89 With a name that translates into 'The Crazy Chicken', El Pollo Loco (NASDAQ:LOCO) is a fast food chain known for its citrus-marinated, fire-grilled chicken recipe that hails from the coastal town of Sinaloa, Mexico. Why Should You Dump LOCO? Lagging same-store sales over the past two years suggest it might have to change its pricing and marketing strategy to stimulate demand Modest revenue base of $476 million gives it less fixed cost leverage and fewer distribution channels than larger companies Estimated sales growth of 3.5% for the next 12 months is soft and implies weaker demand El Pollo Loco is trading at $8.89 per share, or 4.1x forward EV-to-EBITDA. To fully understand why you should be careful with LOCO, check out our full research report (it's free). Share Price: $2.77 Known for its bottomless steak fries, Red Robin (NASDAQ:RRGB) is a chain of casual restaurants specializing in burgers and general American fare. Why Do We Avoid RRGB? Disappointing same-store sales over the past two years show customers aren't responding well to its menu offerings and dining experience Earnings per share decreased by more than its revenue over the last five years, showing each sale was less profitable High net-debt-to-EBITDA ratio of 14× increases the risk of forced asset sales or dilutive financing if operational performance weakens Red Robin's stock price of $2.77 implies a valuation ratio of 0.9x forward EV-to-EBITDA. Dive into our free research report to see why there are better opportunities than RRGB. Share Price: $4.20 Inspired by a family gas station, Custom Truck One Source (NYSE:CTOS) is a distributor of trucks and heavy equipment. Why Is CTOS Risky? Muted 4.6% annual revenue growth over the last two years shows its demand lagged behind its industrials peers Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 29.2 percentage points Short cash runway increases the probability of a capital raise that dilutes existing shareholders At $4.20 per share, Custom Truck One Source trades at 57.3x forward P/E. Check out our free in-depth research report to learn more about why CTOS doesn't pass our bar. Market indices reached historic highs following Donald Trump's presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth. While this has caused many investors to adopt a "fearful" wait-and-see approach, we're leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years. Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Axon (+711% five-year return). Find your next big winner with StockStory today for free. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
05-05-2025
- Business
- Yahoo
1 Profitable Stock on Our Watchlist and 2 to Turn Down
While profitability is essential, it doesn't guarantee long-term success. Some companies that rest on their margins will lose ground as competition intensifies - as Jeff Bezos said, "Your margin is my opportunity". A business making money today isn't necessarily a winner, which is why we analyze companies across multiple dimensions at StockStory. Keeping that in mind, here is one profitable company that balances growth and profitability and two best left off your watchlist. Trailing 12-Month GAAP Operating Margin: 6.6% Inspired by a family gas station, Custom Truck One Source (NYSE:CTOS) is a distributor of trucks and heavy equipment. Why Is CTOS Risky? Sales trends were unexciting over the last two years as its 4.6% annual growth was below the typical industrials company Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 29.2 percentage points Limited cash reserves may force the company to seek unfavorable financing terms that could dilute shareholders Custom Truck One Source is trading at $4.10 per share, or 55.8x forward P/E. Read our free research report to see why you should think twice about including CTOS in your portfolio, it's free. Trailing 12-Month GAAP Operating Margin: 28.6% From its groundbreaking work in developing the first single-tablet regimens for HIV treatment, Gilead Sciences (NASDAQ:GILD) develops and markets innovative medicines for life-threatening diseases including HIV, viral hepatitis, COVID-19, and cancer. Why Does GILD Give Us Pause? Sizable revenue base leads to growth challenges as its 3.1% annual revenue increases over the last two years fell short of other healthcare companies Demand is forecasted to shrink as its estimated sales for the next 12 months are flat Diminishing returns on capital suggest its earlier profit pools are drying up At $103.68 per share, Gilead Sciences trades at 12.6x forward P/E. To fully understand why you should be careful with GILD, check out our full research report (it's free). Trailing 12-Month GAAP Operating Margin: 25.2% Built on top of Salesforce as one of the first vertical-focused cloud platforms, Veeva (NYSE:VEEV) provides data and customer relationship management (CRM) software for organizations in the life sciences industry. Why Does VEEV Catch Our Eye? Software platform has product-market fit given the rapid recovery of its customer acquisition costs Disciplined cost controls and effective management resulted in a strong trailing 12-month operating margin of 25.2%, and its profits increased over the last year as it scaled Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends Veeva Systems's stock price of $236.50 implies a valuation ratio of 12.9x forward price-to-sales. Is now the right time to buy? See for yourself in our in-depth research report, it's free. The market surged in 2024 and reached record highs after Donald Trump's presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025. While the crowd speculates what might happen next, we're homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver's seat and build a durable portfolio by checking out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years. Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like United Rentals (+322% five-year return). Find your next big winner with StockStory today for free. Sign in to access your portfolio
Malaysian Reserve
02-05-2025
- Business
- Malaysian Reserve
CTOS counter at all-time low, expat management passing leadership baton
CREDIT reporting agency CTOS Digital Bhd, with its shares hitting near all-time low, is seeing the departure of its chief at a time when it missed targets for three consecutive quarters. In a report released on April 28, BIMB Securities maintained its 'Buy' call on the counter but loweredits 52-week target price (TP) to RM1.27 from RM1.33 to reflect its trimmed FY25 earnings. On the same day, HLIB Research downgraded the counter to a 'Hold' from 'Buy' on April 28 with a TP of RM1.10. CTOS closed at 99 sen on Wednesday, after hitting a 52-week high of RM1.51. For the first quarter ended March 31, 2025 (1Q25), CTOS's net profit plunged 31% to RM14.4 million on a turnover of RM76.1 million which was up 6% from the same period last year. The segment profit from the Malaysia operations decreased by 29% to RM17.8 million compared to RM25.2 million in the corresponding period, mainly due to higher sales but offset by higher operational expenditures, it told the exchange. On April 25, CTOS also informed Bursa Malaysia the impending departure of its group CEO Erick Hamburger 'to explore new career opportunities.' It said both sides have mutually agreed that Hamburger's last day of employment will be on Sept 30 and Erick will be on leave from May 1. Until a suitable candidate has been identified, CTOS said the board has appointed its non-independent director Kevin Loh Kok Leong as Interim GCEO with effect from May 1. In its report, BIMB Securities, a unit of Bank Islam Malaysia Bhd (BIMB), noted the resignation of Hamburger and group chief technical officer James Fancourt Mitchell. 'This development is not entirely surprising after CTOS missed targets for three consecutive quarters. A wave of staff departures and market chatter around a key shareholder-led overhaul was on-going. On the bright side, this is arguably the right moment for the expat management to pass the baton to leadership with deeper local roots,' it said. While the basics and foundations of the CRA model can be replicated easily from developed markets, it said long-term success ultimately hinges on local adaptation and customisations. On its outlook, it said the business should continue to expand, supported by solid macro drivers and established systems and its brand prominence. HLIB Research said it noted that CTOS' 1Q25 core profit fell 31% year-on-year (YoY) due to lower gross profit margin (weighed down by less favourable sales mix) and higher opex (rise in marketing and administrative costs). 'Overall, results were below expectations and thus, we cut FY25-26 earnings by 14-15%. Also, we introduced FY27 estimates and flagged a potential profit cliff that unfortunately requires a recalibration in investor expectations. As such, the stock's risk-reward profile is no longer as compelling as before,' it said. — TMR
