Analyst Commentary Highlights Mixed Outlook and Lower Price Target for WillScot Holdings

Key Takeaways

• Expansion of modular and climate-controlled units, alongside value-added offerings, is fueling strong revenue growth and higher profitability due to infrastructure and ESG-driven demand.
  
• Strategic acquisitions and investment in digital systems are boosting operational efficiency, supporting margin expansion, and driving recurring, stable earnings growth.
  
• Ongoing weak local demand, high capital needs, and reliance on large clients create risks to revenue stability, margin growth, and overall medium-term performance.

Catalysts

Provides turnkey temporary space solutions in the United States, Canada, and Mexico.

• The ongoing expansion and strong demand for modular FLEX units and climate-controlled storage-each reporting 30%+ growth year-over-year-are direct beneficiaries of increased infrastructure spending and a shift toward scalable, flexible building solutions, which should support rental revenue, growth in units on rent, and higher average revenue per unit over the next several years.
  
• Strategic acquisitions, particularly in climate-controlled storage, are enabling WillScot to unlock synergies and broaden its higher-margin, value-added services, which supports both top-line revenue growth and sustained EBITDA margin expansion as newly acquired businesses are integrated and operational efficiency gains are realized.
  
• Investments in digital platforms-such as AI-enabled pricing engines and enhanced sales management-are increasing salesforce productivity and enabling better fleet and pricing optimization, contributing to improved asset utilization and driving sequential improvements to net margins and cash flow.
  
• Robust order books and increasing penetration into enterprise and large-scale project customers (e.g., energy, government, special events) position WillScot to capitalize on urbanization trends and demographic shifts requiring rapid, temporary infrastructure deployment, supporting long-term revenue stability and the ability to outgrow cyclical downturns in smaller, local projects.
  
• Growing demand for value-added products and services (VAPS), now exceeding 17% of revenue and up 7-12% per unit year-over-year, signals a mix shift toward higher-margin offerings that are both aligned with customer sustainability and ESG priorities and supportive of gross profit margin improvement and recurring earnings growth.

WillScot Holdings Future Earnings and Revenue Growth

Assumptions

• Analysts are assuming WillScot Holdings's revenue will grow by 2.5% annually over the next 3 years.
• Analysts assume that profit margins will increase from 4.7% today to 14.3% in 3 years time.
• Analysts expect earnings to reach $363.1 million (and earnings per share of $1.74) by about September 2028, up from $109.7 million today.
• In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 22.3x on those 2028 earnings, down from 37.9x today. This future PE is lower than the current PE for the US Construction industry at 34.7x.
• Analysts expect the number of shares outstanding to decline by 1.45% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 10.65%, as per the Simply Wall St company report.

WillScot Holdings Future Earnings Per Share Growth

Risks

• Weakness in small project and local/regional demand persists, as many customers remain cautious about committing due to macro uncertainty (rate policy, trade issues, labor constraints), contributing to ongoing volume headwinds and pressuring revenue growth.
  
• Flat or declining units on rent for modular and storage products (modular units on rent down 5.6% YoY, storage down 3.8% YoY in Q2) indicate underlying demand challenges outside of larger enterprise projects, potentially limiting revenue recovery until broad market conditions improve.
  
• High capital expenditures for fleet refurbishment, expansion into new product categories (such as FLEX and climate-controlled units), and up-front in-sourcing investments could negatively affect free cash flow and constrain margin expansion if demand remains muted or ROI falters.
  
• Reliance on large project and enterprise clients creates customer concentration risk and exposes the company to swings in project timing or completions; if large projects slow or roll off faster than new wins, both revenue and earnings could be impacted by volatility.
  
• A delayed recovery in local/small project construction-dependent on clarity around interest rate and trade policies-could result in a prolonged flat or declining trend in units on rent and revenue, with management expecting no inflection until at least 2026, raising the risk of missing medium-term growth and margin targets.

Valuation

• The analysts have a consensus price target of $34.333 for WillScot Holdings based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $40.0, and the most bearish reporting a price target of just $29.0.
• In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $2.5 billion, earnings will come to $363.1 million, and it would be trading on a PE ratio of 22.3x, assuming you use a discount rate of 10.6%.
• Given the current share price of $22.83, the analyst price target of $34.33 is 33.5% higher.
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.