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Investing.com - Stifel maintained its Buy rating and $7.00 price target on Custom Truck One Source (NYSE:CTOS) following the company’s second-quarter results that exceeded analyst expectations. According to InvestingPro data, the stock has delivered impressive returns with a 58.31% gain over the past year and currently appears undervalued based on its Fair Value analysis.
Custom Truck One Source reported second-quarter 2025 revenue of $512 million, surpassing the consensus estimate of $467 million. The outperformance was primarily driven by upside in the Truck and Equipment Sales (TES) segment and improving trends in Transmission and Distribution (T&D).
The company’s rental utilization increased to 77.6% in the second quarter, up from 71.7% in the same period last year, with average fleet on rent increasing 16% year-over-year. Current utilization stands at approximately 78%, with original equipment cost (OEC) on rent up about 1% from the second-quarter average. The company maintains a current ratio of 1.26, indicating adequate liquidity to support its operations.
TES orders increased 15% year-over-year to $218 million, with notably healthier demand among small and mid-size customers who likely benefit from new bonus depreciation incentives. The company expects TES margins to improve in the second half of 2025 relative to the first half.
Custom Truck One Source also reported adjusted EBITDA of $93 million, above the expected $86 million, primarily due to better-than-expected gross profit in both the TES and Equipment Rental Solutions (ERS) segments, while reiterating its full-year 2025 guidance across revenue, segment revenue, adjusted EBITDA, and capital expenditure. With a gross profit margin of 20.95% and analysts expecting profitability this year, detailed analysis and forecasts are available in the comprehensive Pro Research Report on InvestingPro.
In other recent news, Custom Truck One Source reported its second-quarter 2025 earnings, showcasing a notable revenue increase. The company achieved a revenue of $511 million, representing a 21% growth compared to the previous year, surpassing expectations. However, its earnings per share (EPS) were reported at -$0.13, which did not meet the forecasted -$0.05. Despite this, the revenue surprise was well-received in the market. Following the earnings report, DA Davidson raised its price target for Custom Truck One Source to $8.00 from $7.50, maintaining a Buy rating. The firm cited healthy performance across rental key performance indicators, truck sales, orders, and margins as factors for the target increase. These developments highlight recent activity and investor interest surrounding Custom Truck One Source.
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