DA Davidson maintains Buy on Custom Truck One Source stock

On Monday, DA Davidson reiterated a Buy rating and a $9.00 price target on shares of Custom Truck One Source (NYSE:CTOS), representing an 87% upside from the current price of $4.80. Analyst Michael Shilisky expressed continued confidence in the company following the fourth-quarter performance, which aligned with many of the firm’s expectations. According to InvestingPro data, CTOS has shown strong momentum with an impressive 43.86% price return over the past six months. Key highlights included improved rental utilization, robust demand for truck sales, and projections for double-digit EBITDA growth by 2025.

The analyst noted that discussions with CTOS management after the earnings call revealed insights into customer behavior during economic uncertainty. According to management, customers are more inclined to rent rather than purchase in such conditions, which could favorably impact CTOS’s business mix. Shilisky emphasized that these factors contribute to a positive outlook for the company’s earnings trajectory. For deeper insights into CTOS’s financial health and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro, which covers over 1,400 US stocks with detailed analysis and actionable intelligence.

Custom Truck One Source’s recent performance and future expectations seem to support the Buy rating, with the stock showing a significant 18.84% return over the last week. The company’s strategic positioning to benefit from customer preferences in uncertain economic times has been underscored by DA Davidson as a reason for their bullish stance on the stock. With a market capitalization of $1.09 billion, CTOS maintains a current ratio of 1.3, indicating adequate liquidity to meet short-term obligations.

The analyst’s comments suggest that CTOS is well-positioned for continued growth, which may be an encouraging sign for investors. The reaffirmed $9.00 price target reflects confidence in the company’s ability to maintain its positive momentum and achieve its financial goals in the coming years.

Custom Truck One Source’s stock rating and price target by DA Davidson remain unchanged, as the company continues to navigate the current economic landscape. The firm’s outlook on CTOS suggests a potentially strong performance for the stock as a long-term investment.

In other recent news, Custom Truck One Source reported its fourth-quarter 2024 earnings, revealing a notable earnings per share (EPS) beat of $0.12, significantly surpassing the forecast of $0.04. Despite this positive outcome, the company’s revenue fell short of expectations, coming in at $521 million against a projected $543.32 million. The company’s strong performance in the Transmission Equipment Segment, which achieved record annual sales, was highlighted in the earnings call. Looking ahead, Custom Truck One Source has set its 2025 revenue guidance between $1.97 billion and $2.06 billion, with adjusted EBITDA projected to range from $370 million to $390 million.

DA Davidson maintained a Buy rating on Custom Truck One Source, with a price target of $9.00, after the company’s fourth-quarter results. The analyst emphasized the company’s rental utilization rate of 78.9%, which exceeded expectations and indicated a positive trend. Meanwhile, Stifel analysts maintained a Hold rating with a $5.00 price target, noting the company’s revenue and adjusted EBITDA missed expectations. However, they acknowledged improvements in rental utilization and a significant increase in TES orders, which support the 2025 revenue outlook.

Custom Truck One Source’s management expressed confidence in sustaining strong trends into 2025, supported by positive rental utilization rates and the growth in TES orders. The company also announced continued investment in its rental fleet and strategic property transactions to enhance operational capabilities. As the market responds to these developments, analysts and investors will be closely watching the company’s performance in the coming year.

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