United Rentals (URI) Stock Forecast & Price Target

United Rentals reported a strong financial performance for the fourth quarter of 2024, with total revenues increasing by 9.8% to $4.095 billion and rental revenue rising by 9.7% to $3.422 billion, driven by large projects and storm-related work. The company achieved an adjusted EBITDA of $1.900 billion, reflecting a year-over-year increase of $91 million, attributed to larger rental gross profits and growth in specialty rental revenue, which soared by 23.9% to $1.136 billion. The consistent growth in various revenue segments, particularly within specialty rentals and ancillary services, demonstrates United Rentals’ robust market positioning and capacity to capitalize on increasing demand in key sectors.

United Rentals's financial outlook is negatively impacted by declining adjusted EBITDA margins, which decreased to 46.4%, representing a 210 basis point year-over-year decline driven by headwinds from used and new equipment sales. Additionally, the modest increase in GenRent revenues by only 0.9% and a decline in rental gross margin to 37.6% further illustrate the challenges faced by the company. The reported adjusted EBITDA of $1.904 billion fell slightly below consensus expectations, signaling that profitability may be under pressure due to rising SG&A expenses and normalization of used equipment margins.