Melius Capital has opened formal coverage on EquipmentShare (NASDAQ: EQPT), assigning a buy rating and a price objective of $55.00. That target implies about a 63% upside from the stock's then-current quotation of $33.77, and sits within the range of analyst targets currently tracked by InvestingPro - specifically between a high of $63 and a low of $41.
The research note frames EquipmentShare's valuation in the context of the rental equipment sector. Melius observed that, on a relative basis, EquipmentShare shares trade at roughly parity with United Rentals. The firm pointed to historical precedents in the rental market where companies that outgrew peers have commanded multiples premium - citing Ashtead as an example that traded at a variable 6 P/E-turn premium and a 1-2x EV/EBITDA premium to United Rentals through much of the 2010s, a period when Ashtead was emphasizing organic expansion.
On a multiple basis, EquipmentShare currently trades at an EV/EBITDA multiple of 23.4x, a level InvestingPro data identifies as relatively high. Melius noted the company lso pursues organic outgrowth, but with a more ambitious scope than Ashtead uring its comparable period. That, the firm said, could justify a larger premium if EquipmentShare delivers on execution, but it also means the market's present valuation incorporates some degree of risk.
From a revenue perspective, the firm recorded $3.76 billion in sales for 2024, placing EquipmentShare third within the industry by that metric. More recent trailing-twelve-month figures have climbed to $4.36 billion, and Melius projects a revenue growth rate of 20% for fiscal 2025.
Profitability remains a central caveat. EquipmentShare is currently operating at breakeven, while the historical example Melius referenced - Ashtead - was notably profitable during its growth phase. The analyst highlighted that there are a "few things left to prove" before profitability trends are firmly established.
Other investment firms have also initiated coverage or set new ratings on EquipmentShare in the same period, reflecting a range of views on its prospects:
- Truist Securities - Buy rating, $43.00 price target; noted EquipmentShare's significant position in the U.S. rental equipment market with $4.4 billion in trailing 12-month sales.
- Goldman Sachs - Buy rating, $51.00 price target; acknowledged the company's growth within the North American construction equipment rental market.
- Citizens - Market Outperform, $42.00 price target; cited rapid growth in equipment rental revenue relative to the industry average.
- Baird - Outperform, $63.00 price target; emphasized the role of EquipmentShare's proprietary T3 technology platform in driving customer demand.
- KeyBanc - Sector Weight rating; observed that EquipmentShare has been the fastest-growing equipment rental company over the past decade, aided by a capital-light operating structure.
Collectively, these assessments underscore divergent expectations among sell-side analysts about how the company's growth, technology platform and business model will translate into sustained margin expansion and cash generation. Melius' view balances a bullish growth outlook with caution about current profitability and valuation sensitivity.
Article summary
Melius initiated coverage of EquipmentShare with a buy rating and a $55 price target, seeing significant upside from the then-current $33.77 price. The firm compares EquipmentShareavorably to peers in terms of organic growth ambitions and highlights a potential valuation premium, while also flagging that the company is only at breakeven and has further operational proofs to demonstrate.
Key points
- Analyst initiation: Melius sets a $55 target for EQPT, implying roughly 63% upside from $33.77.
- Valuation context: EQPT trades at a 23.4x EV/EBITDA multiple; historical peer premiums (Ashtead vs United Rentals) are cited as precedents.
- Scale and growth: 2024 revenues were $3.76 billion; TTM revenue rose to $4.36 billion with a projected 20% growth rate for fiscal 2025.
Risks and uncertainties
- Profitability: The company is currently at breakeven, leaving questions about margin expansion and sustainable profitability.
- Valuation sensitivity: The present EV/EBITDA multiple is relatively high, so execution shortfalls could lead to downside.
- Proof points needed: Melius indicates there are operational and financial milestones yet to be demonstrated to justify a sustained premium.
These points touch on the construction and industrial rental sector, broader capital markets sentiment toward growth-at-scale businesses, and equipment rental operator economics tied to utilization, pricing and capital allocation.