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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
United Rentals, Inc. (XNYS:URI) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
URI
Name:
UNITED RENTALS, INC. (XNYS:URI)
Sector:
349.00M
Industry:
Rental & Leasing Services
CEO:
Mr. Matthew Flannery
Total Employees:
20,400
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -128.74% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF UNITED RENTALS, INC.(URI) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND RENTAL & LEASING SERVICES INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
289.71
One Month Price Target:
$292.82
Six Month Price Target :
$308.34
Likely Price in One Year's Time:
Ticker:
$326.98
Likely Trading Range Today Under (Normal Volatility)
$288.53
Price Upper limit ($) :
$291.71
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$270.93
This week:
$247.72
This month :
$205.73
Other Primary facts
Market Cap:
20.44B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
69.99M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
22.18%
-16.54%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$376.77
$336.27
$202.65
$243.15
Medium risk (<10%) entry points
Buy Call
Sell Call
$323.08
Buy Put:
Sell Put:
$314.44
$256.22
$264.98
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
URI
Sharpe Ratio:
4.10%
Comparison:
URI, is amongst the top 20% stocks with highest risk-adjusted returns
Sharpe ratio is 36.86% higher than the industry
& ratio is 80.01% higher than the market/S&P 500 average
Average Returns/Yield of
URI
Daily returns:
0.14%
Weekly returns:
0.71%
Monthly returns:
2.82%
Yearly returns:
31.25%
Comparison of returns:
Average annual returns/yield (last 3 years) is 8.42% above industry average
Classification:
URI, is amongst the top 20% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.28
Statistical test of Returns:
URI has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
3.22%
Weekly Volatility:
7.21%
Monthly Volatility:
14.42%
Yearly Volatility:
49.96%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.35%
Volatility in last five trading days has been -58.28% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-6.48%
Weekly VaR:
-14.49%
Monthly VaR:
-28.99%
How Much Can the price of
URI
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-24%
Worst case (decline):
>85%
This translates to price declining to:
$220.14
This translates to price declining to:
$43.46
Severe Crash Probability
Risk of crash in next 6/12 months: Very high (>70%)
What is Value at Risk (VaR)?
Risk Fundamentals
URI is a 104.60% riskier investment compared to the market/S&P 500 & is 75.28% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -12.42% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
URI
Beta in relation to market/S&P 500--1.91
Expected beta in 1 year's time:
1.128
Expected beta in 3 year's time:
1.595
Unlevered (debt free) Beta:
0.897
Beta in relation to Nasdaq (XNAS):
1.074
Beta in relation to all global stocks::
1.078
Beta Comparison & Analysis
Beta of competitors/peers::
1.094
Beta is 75.06% higher than peers
Average Industry Beta:
1.628
Beta is 17.58% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
26.01%
Sustainable growth rate is 115.50% above industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.176
Alpha is 3.96% above industry average alpha yield
Alpha is 1121% higher than market/& is unsustainably high
Analysis of Cost of Capital of
URI
Equity cost of capital:
0.163
Equity cost of capital is 13.71% above industry mean WACC
Unlevered (without debt) cost of capital:
7.62%
Before-tax cost of debt:
4.14%
After-tax cost of debt:
3.27%
Overall debt rating:
Lower BB medium grade (Fifth highest grade)
Weighted average cost of capital (WACC):
3.27%
WACC is 27.50% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$145.50
Revenue growth rate per share of (3Y):
3.33
Annual revenue growth rate is 55.83% above the industry average
EPS:
$21.27
Expected Annual growth rate of EPS (3Y):
7.81%
Expected future EPS growth rate is -32.37% lower than the Rental & Leasing Services industry
Free cash flow (FCF) per share:
$5.43
-
-
Debt per share
$130.78
EBITDA per share
$64.61
Valuation Analysis Today of
URI
P/E Ratio:
12
P/E Ratio of Competitors/Peers:
25.9
P/E ratio is -53.69% lower than main peers & is -33.47% lower than the industry
Stock price/value with industry average P/E ratio: $383.49
URI is -24.45% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
1.99
Price to sales ratio is 5.75% above the industry mean
P/B (Price to book value ratio):
3.33
Price to free cash flow: 53.36
Price to free cash flow ratio is 117.98% higher than the industry
Net income growth rate (3Y):
43.85%
Net income growth rate is -80.75% lower than the industry average net income growth rate
Dividend Analysis
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Dividend History:
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
150.44%
Net debt to equity ratio:
164.56%
Debt to assets ratio:
45.38%
Net debt to assets ratio:
49.64%
Debt-to-asset ratio is -39.38% below industry average
Ability to repay debt:
Interest coverage ratio:
10.79
Interest coverage ratio is -127.15% less than industry average
Looking forward:
Debt growth rate:
0.95%
Annual debt growth is -95% lower than industry average debt growth rate
Debt repayment rate in last quarter: 13.04%
Analysis of Key Statistics
Correlation of price movement with the market:
0.713
Statistical significance of correlation:
URI has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.547
Stock price is 30.30% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.547
Correlation of price movement with Nasdaq (^IXIC):
-0.011
Covariance of price movement with the market:
-0.02
Kurtosis
5.729
Returns have moderate fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
0.129
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
URI
Gross Profit Margin Ratio:
162%
Operating Profit Margin Ratio:
24.32%
Operating profit margin is 149.74% higher than the industry
Net Profit Margin Ratio:
162%
Effective Tax Rate:
24.54%
Effective tax rate is 7.92% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
25.48%
Return on equity (ROE) is -153.11% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
7.69%
Return on assets (ROA) is 95.46% higher than the industry
Financial Leverage:
1.8x
Current Ratio:
0.77
Current ratio is -39.31% below industry average
Cash Conversion Cycle (days):
14.7
Cash conversion cycle is -33.10% below industry average
The remaining useful life of property plant & equipment is: 2.4 years
Stock based compensation to net income ratio:
1.55%
In-depth Efficiency Analysis
Revenue generated per employee:
499.2K
Each employee generates -78% less revenue than industry average revenue per employee
EBITDA generated per employee:
221.7K
Each employee generates -100% less EBITDA than industry average revenue per employee
Profit generated per employee:
76.0K
Each employee generates -100% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
17.1K
Each employee generates -92% less free cash flow than industry average revenue per employee
Assets/Capital per employee
890.1K
Each employee generates -92% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
URI
INGERSOLL RAND INC. (XNYS:IR)
ZTO EXPRESS (CAYMAN) INC. (XNYS:ZTO)
CNH Industrial NV (XNYS:CNHI)
W.W. GRAINGER, INC. (XNYS:GWW)
DOVER CORPORATION (XNYS:DOV)
XYLEM INC. (XNYS:XYL)
DELTA AIR LINES, INC. (XNYS:DAL)
KANSAS CITY SOUTHERN (XMEX:KSU*)
SOUTHWEST AIRLINES CO. (XNYS:LUV)
Current Analyst Ratings
Strong buy�25%
Buy�8%
Hold�33%
Sell�8%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
10.18B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
6.05B
4.13B
-
-
1.27B
-
378.00M
1.65B
-
419.00M
2.05B
4.52B
2.48B
1.55B
2.05B
504.00M
1.55B
Statement of Cash Flow
Date:
Period:
532.00M
Differed Income Tax :
37.00M
Stock Based Compensation :
24.00M
Change in Working Capital :
48.00M
Accounts Receivables:
76.00M
Other Working Capital:
-
Other Non-Cash Items:
- 122000.00K
Net Cash Provided by Operating Activities:
886.00M
Investments in PP&E:
- 537000.00K
Net Acquisitions:
- 77000.00K
Purchases of Investments:
- 3000.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
101.00M
-
101.00M
1.61B
179.00M
123.00M
2.01B
12.02B
-
-
-
-
38.00M
18.16B
-
20.17B
828.00M
960.00M
-
-
809.00M
2.60B
9.15B
147.00M
11.49B
-
14.09B
1.00M
7.92B
- 151000.0K
-
March 31, 2022 at 6:00:00 AM
7.70B
6.08B
20.17B
-
10.11B
10.0B
-
223.00M
- 394000.00K
- 1372000.00K
-
- 318000.00K
-
1.16B
- 535000.00K
-
- 43000.00K
101.00M
144.00M
886.00M
- 537000.00K
349.00M
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
URI
2023
2024
2025
2026
2027
$421.61
$475.85
$537.06
$606.15
$684.12