United Rentals (URI): Buy, Sell, or Hold Post Q3 Earnings?

United Rentals has followed the market’s trajectory closely, rising in tandem with the S&P 500 over the past six months. The stock has climbed by 12.2% to $802.84 per share while the index has gained 11.3%.

Is there a buying opportunity in United Rentals, or does it present a risk to your portfolio? Dive into our full research report to see our analyst team’s opinion, it’s free for active Edge members.

Why Is United Rentals Not Exciting?

We're sitting this one out for now. Here are three reasons why URI doesn't excite us and a stock we'd rather own.

1. Slow Organic Growth Suggests Waning Demand In Core Business

We can better understand Specialty Equipment Distributors companies by analyzing their organic revenue. This metric gives visibility into United Rentals’s core business because it excludes one-time events such as mergers, acquisitions, and divestitures along with foreign currency fluctuations - non-fundamental factors that can manipulate the income statement.

Over the last two years, United Rentals’s organic revenue averaged 5% year-on-year growth. This performance was underwhelming and suggests it may need to improve its products, pricing, or go-to-market strategy, which can add an extra layer of complexity to its operations.

2. Recent EPS Growth Below Our Standards

While long-term earnings trends give us the big picture, we also track EPS over a shorter period because it can provide insight into an emerging theme or development for the business.

United Rentals’s EPS grew at an unimpressive 4.1% compounded annual growth rate over the last two years, lower than its 7.2% annualized revenue growth. This tells us the company became less profitable on a per-share basis as it expanded.

3. Free Cash Flow Margin Dropping

Free cash flow isn't a prominently featured metric in company financials and earnings releases, but we think it's telling because it accounts for all operating and capital expenses, making it tough to manipulate. Cash is king.

As you can see below, United Rentals’s margin dropped by 5.6 percentage points over the last five years. If its declines continue, it could signal increasing investment needs and capital intensity. United Rentals’s free cash flow margin for the trailing 12 months was 12.7%.

Final Judgment

United Rentals isn’t a terrible business, but it isn’t one of our picks. That said, the stock currently trades at 17.7× forward P/E (or $802.84 per share). While this valuation is reasonable, we don’t really see a big opportunity at the moment. We're fairly confident there are better investments elsewhere. We’d suggest looking at one of our top software and edge computing picks.

Stocks We Would Buy Instead of United Rentals

The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).

Stocks that have made our list include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.

StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.