A month has gone by since the last earnings report for United Rentals (URI). Shares have added about 9% in that time frame, outperforming the S&P 500.
But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is United Rentals due for a pullback? Well, first let's take a quick look at the latest earnings report in order to get a better handle on the recent catalysts for United Rentals, Inc. before we dive into how investors and analysts have reacted as of late.
United Rentals' Q4 Earnings & Revenues Miss, Dividend Hiked by 10%
United Rentals reported lower-than-expected fourth-quarter 2025 results, with adjusted earnings per share (EPS) and total revenues both missing the Zacks Consensus Estimate. On a year-over-year basis, the top line grew while the bottom line tumbled.
The company’s fourth-quarter revenues improved year over year due to increased fleet productivity and strong demand across construction and industrial end markets.
Owing to the positive trends, United Rentals’ board of directors hiked the quarterly dividend payment by 10% to $1.97 per share ($7.88 per share annually).
United Rentals’ Quarterly Highlights
Adjusted EPS of $11.09 missed the Zacks Consensus Estimate of $11.90 by 6.8%. The reported figure decreased 4.3% from the prior-year adjusted figure of $11.59 per share.
Total revenues were $4.21 billion in the quarter, missing the consensus mark of $4.26 billion by 1.1%. On a year-over-year basis, the top line grew 2.8%.
Equipment Rentals’ revenues increased 4.6% from the year-ago quarter to $3.58 billion. Fleet productivity inched up 0.5% year over year. Average original equipment at cost increased 4.5% year over year.
Used equipment sales (or sales of rental equipment) declined 14.6% from a year ago to $386 million. This produced an adjusted gross margin of 47.2%, which contracted 170 basis points (bps).
United Rentals’ Segment Discussion
General Rentals: This segment registered 2.5% year-over-year growth in revenues of $2.4 billion. Conversely, rental gross margin contracted 120 bps year over year to 36.2%, indicating the impact of inflation and normal cost variability, alongside increased depreciation expense.
Specialty: Segmental revenues improved 9.2% year over year to a fourth-quarter record of $1.18 billion. Rental gross margin, however, contracted 520 bps year over year to 40.3%, indicating higher depreciation expense, increased delivery costs and changes in revenue mix driven by growth in lower-margin ancillary revenues.
United Rentals’ Margins
The company’s total equipment rentals’ gross margin contracted 240 bps year over year to 37.6%.
Adjusted EBITDA for the reported period inched up 0.1% year over year to $1.901 billion. However, the adjusted EBITDA margin contracted 120 bps to 45.2%. This decline primarily stemmed from a decreased rental and used equipment sales gross margin.
Sneak Peek at United Rentals’ 2025
Total revenues of $16.1 billion grew 4.9% year over year, while adjusted EPS declined 2.6% to $42.06.
In the full year, adjusted EBITDA improved 2.3% year over year to $7.33 billion, but the adjusted EBITDA margin contracted 120 bps.
Balance Sheet of United Rentals
United Rentals had cash and cash equivalents of $459 million as of Dec. 31, 2025, up from $457 million at 2024-end. Total liquidity was $3.322 billion at the fourth-quarter end. Long-term debt as of the fourth quarter was $12.65 billion, up from $12.23 billion at 2024-end.
As of Dec. 31, 2025, the net leverage ratio was 1.9x. Return on invested capital was 11.7% for the trailing 12 months ended on Dec. 31, 2025.
During 2025, net cash from operating activities was $5.19 billion, up from $4.55 billion in 2024. Free cash flow increased 6% year over year to $2.18 billion in 2025.
During 2025, United Rentals returned $2.364 billion to its shareholders, including $1.9 billion through share repurchases and $464 million through dividend payments. In 2025, it also completed its previous $1.5 billion share repurchase program and launched a new $1.5 billion program, which was later raised to $2 billion following new federal tax legislation in July 2025.
United Rentals Unveils 2026 Guidance
Total revenues are expected to be in the range of $16.8-$17.3 billion. Adjusted EBITDA is expected to be between $7.575 billion and $7.825 billion.
Net rental capital expenditure is anticipated to be in the range of $2.85-$3.25 billion (after gross purchases of $4.3-$4.7 billion) compared with $2.776 billion after gross purchases of $4.189 billion in 2025.
Net cash provided by operating activities is anticipated to be in the range of $5.3-$6.1 billion. Free cash flow (excluding the impact of merger and restructuring-related payments) is expected to be in the range of $2.15-$2.45 billion.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
VGM Scores
Currently, United Rentals has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a score of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, United Rentals has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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United Rentals, Inc. (URI): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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