URI Financial Analysis

Analysis Date: 1/31/2025

Business Model

United Rentals generates revenue primarily through equipment rentals, sales of rental equipment, sales of new equipment, contractor supplies sales, and service/other revenues

Revenue Sources

• Equipment rentals (85% of 2024 revenue): Includes renting equipment and related fees for delivery, pickup, damage protection etc.
• Sales of rental equipment (10% of 2024 revenue): Sales of used rental equipment
• Sales of new equipment, contractor supplies, and services (5% of 2024 revenue)

Revenue Distribution by Channel

• General Rentals Segment: 71% of total revenue
• Specialty Segment: 29% of total revenue

Income Statement Analysis

• Total revenue increased 7.1% to $15.3B in 2024, driven by 8.0% growth in equipment rentals
• Adjusted EBITDA grew 4.4% to $7.2B with margins declining 110bps to 46.7% due to higher costs and mix shift
• Net income increased 6.2% to $2.58B with margins relatively stable at 16.8%

Balance Sheet Analysis

• Total assets increased 10.1% primarily due to fleet expansion and acquisitions
• Maintained strong liquidity position of $2.8B at year-end

Cash Flow Analysis

• Generated $4.5B in operating cash flow and $2.1B in free cash flow
• Free cash flow declined 10.8% YoY primarily due to higher working capital requirements

Capital Allocation

Management maintains a balanced capital allocation approach focused on organic growth investment, strategic M&A, and return of capital to shareholders through dividends ($434M in 2024) and share repurchases ($1.25B in 2024). The company has paused share repurchases due to the pending H&E acquisition.

Management Commentary

Saw continued strength across end markets with both construction and industrial customers

Successfully integrated Yak Access acquisition and expanded specialty solutions offerings

Experiencing some margin pressure from cost inflation and mix shift

Overall Sentiment: Confident but measured outlook for 2025 with continued focus on operational excellence and strategic growth

Recommendation

Rating: Buy

Reason for Rating: Strong market position, proven execution ability, and attractive secular growth trends support positive long-term outlook

Disclaimer: This analysis is based on company filings and public information. It is for informational purposes only and not financial advice. Past performance does not guarantee future results.

Generated on: 1/31/2025, 8:13:08 AM