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McGrath RentCorp (MGRC) reported forecasted earnings growth of 9.27% per year and revenue growth of 4.6% per year, both of which trail the US market’s broader expectations of 15.5% and 10%, respectively. The company’s net profit margin decreased from 25.3% last year to 15.6%, following a period of strong historical earnings growth that averaged 20.3% per year over the past five years. Most recently, it recorded negative year-over-year earnings growth. Despite these recent declines, MGRC is trading near fair value with a P/E ratio of 19.4x, below industry and peer averages, and continues to offer high-quality earnings along with an appealing dividend for investors.

See our full analysis for McGrath RentCorp.

Now, let’s see how this latest crop of numbers lines up against the widely held narratives. This provides a chance to test which stories get confirmed and which offer new surprises.

See what the community is saying about McGrath RentCorp

• Utilization in key rental segments fell, with Mobile Modular dropping to 73.7% from 78.4% and Portable Storage down to 61.1% from 66.1%. This highlights cyclical stress in the company’s core markets.

• Bears argue that ongoing declines in utilization and weaker demand could make future growth targets harder to achieve, especially as fleet underinvestment and unpredictable order flow may limit revenue momentum.

  • Persistently lower utilization puts pressure on recurring rental revenues and reduces operating leverage, a risk factor cited in analysts’ consensus view.

  • If the recent segment softness continues, consolidated revenue growth could trend below the company’s historical averages. This underlines revenue stability concerns.

• Selling and general administrative expenses have increased as the company pushes hiring and invests in digital infrastructure. This raises the risk that operating costs will remain elevated if topline growth does not accelerate.

• Analysts’ consensus view sees operational investment as a double-edged sword, likely improving long-term efficiency and margin potential but threatening short-term EBITDA margin compression if demand softens.

  • Margin trajectory is a key debate point. While technology upgrades may help expand margins, SG&A ramp-up combined with declining utilization can offset these gains in the near-term.

  • This margin tension is central to the narrative that MGRC’s position is attractive only if growth and efficiency materialize ahead of the cost increases. Otherwise, margins could lag peers.

Rejlers (OM:REJL B) reported earnings growth of just 1.8% this year, a notable deceleration from its five-year annual average of 25.3%. Despite a lower net profit margin at 4.6% and a significant one-off loss of SEK74.2 million in the last 12 months to 30th September, 2025, the company’s forecast earnings and revenue growth rates of 17.54% and 5.2% per year respectively both outpace the broader Swedish market. Investors will be weighing these robust growth projections against the softer profitability trends and non-recurring expenses that have affected earnings quality.

See our full analysis for Rejlers.

Next, we will be putting these headline results in direct context with the major narratives followed by the Simply Wall St community. We will highlight where expectations hold up and where the numbers challenge the consensus story.

Curious how numbers become stories that shape markets? Explore Community Narratives

• Rejlers’ earnings quality was affected by a material one-off loss of SEK74.2 million in the 12 months to 30th September, 2025, which is not expected to recur but significantly reduced reported profitability in this period.

• Heavily supporting the bullish case for strong earnings growth ahead, the company is still forecast to grow earnings at 17.54% per year and revenue at 5.2% per year. Both figures are well above Swedish market averages.

  • Bulls highlight that this impressive growth trajectory stands out despite headline results being held back by a non-recurring charge.

  • The broad consensus among optimists is that future profitability should normalize if such one-off events do not repeat, allowing underlying momentum to show through.

• The current net profit margin has slipped to 4.6% from 4.9% last year, reflecting some pressure on underlying profitability that investors will want to see reverse in coming periods.

• Challenges to the narrative of operational resilience emerge as this margin softness, combined with muted 1.8% earnings growth, serves as a reality check for investors expecting a swift rebound.

  • This margin compression limits near-term optimism even as top-line forecasts remain strong, giving cautious investors reason to monitor cost control and project delivery closely.

  • Some observers point to the impact of non-recurring expenses as a key reason for the margin dip, but emphasize that sustained improvement will require more than just their absence.

• At SEK198.20, Rejlers shares are trading at a deep 63% discount to the estimated DCF fair value of SEK529.11, even though the stock’s price-to-earnings ratio of 20.8x sits slightly below the broader Professional Services industry average but above peers.

• This wide disconnect between price and DCF fair value intensifies investor focus on whether growth expectations are realistic, or if persistent profit headwinds will keep the valuation gap open.

  • The relatively full P/E versus peers shows that investors are already paying up for earnings quality, yet the current price implies skepticism about sustaining future outperformance.

  • Ultimately, many investors will see the margin of safety at current levels as compelling, provided that forecast growth materializes and one-off expenses do not become a pattern.