MGRCMcGrath RentCorp
Is the business good?
A genuinely good business: earnings fully cash-backed (1.4×) and margins widening.
Operating profit is fully backed by cash. Conversion is worsening vs a year ago.
Operating margin has widened over the past few years, the business is getting more profitable per dollar of sales.
Margin-driven, fat margins on slower asset turns. ROE 12% = margin × turnover × leverage.
Unless marked, from derived.
Against the whole market›
Percentile against every name Ryufin tracks. Higher is better; the tick marks the middle of the market. Context, not one of the checks above.
Where this answer is blind. The F-score rewards improvement, so an already-elite company can score mid-pack.
How good a business is MGRC?
McGrath RentCorp earns 15% on the capital it employs against a 9.0% cost of capital, so the business is worth more the bigger it gets.
Return on invested capital · cost of capital 9.0% · 6.1 points above what the capital costs: growth creates value
- Operating margin
- 25%
Operating margin · Rental & Leasing Services median 8.0% · 12 months to Q2 2026
- Cash conversion
- 1.45×
Cash conversion · 1.94× a year ago · operating cash flow covers the operating profit after tax
- Share count, year on year
- −0.50%
Share count, year on year · flat: no meaningful dilution
| Year | Operating margin |
|---|---|
| FY2020 | 25% |
| FY2021 | 23% |
| FY2022 | 23% |
| FY2023 | 23% |
| FY2024 | 27% |
| FY2025 | 26% |
Details›
- Gross margin12 months to Q2 2026
- 49%
- Operating margin12 months to Q2 2026
- 25%
- Net margin12 months to Q2 2026
- 16%
- Free cash flow margin
- 22%
- Revenue, trailing twelve months
- $933M
- Free cash flow, trailing twelve months
- $210M
- Net income, trailing twelve months
- $153M
- Return on invested capitaloperating profit after tax ÷ debt + equity − cash
- 15%
Margins, capital and share counts from the statements as filed with the SEC; cash conversion is operating cash flow over operating profit after tax.