Why United Rentals Stock Is Plummeting Today
Shares of leading equipment rental company United Rentals (NYSE: URI) are down 14% as of noon ET on Thursday after the company reported underwhelming fourth-quarter earnings. United Rentals missed Wall Street's expectations for both sales and earnings per share, while offering guidance slightly below analysts' estimates, sparking today's sell-off. However, with the company inching sales and free cash flow (FCF) higher by 5% and 6%, respectively, in 2026, United Rentals' actual operations are doing perfectly fine, so investors shouldn't panic about today's drop.
On any quarterly earnings call, it is essential to remain focused on the stock's outlook over the next three to five years (and beyond), rather than worrying too much about 90 days' worth of data. This notion rings true when looking at United Rental's slightly disappointing earnings today. While the company missed earnings, its burgeoning specialty unit continued to deliver outsize growth, with sales up 9% in Q4. Adjacent to the company's core equipment rental business, the specialty unit includes fluid, matting, and tool solutions, as well as modular spaces, trench safety, worksite services, and power and HVAC. This segment has grown by 20% annually since 2015, so it represents United Rental's growth engine. Despite the company facing broader macroeconomic challenges as it tries to rebound from a post-pandemic drop, this specialty segment shows its growth potential remains.
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