United Rentals (URI): Evaluating Current Valuation After Recent Share Price Momentum

United Rentals (URI) shares edged higher, continuing a steady climb over the past month. Investors are evaluating the company’s current valuation, focusing on recent performance metrics and considering how these factors may influence future expectations.

See our latest analysis for United Rentals.

United Rentals’ share price momentum has picked up lately, supported by a 25% gain over the past three months and a total shareholder return of 21% for the year. This suggests investors see renewed growth and are responding to a stronger earnings backdrop.

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With strong recent returns and solid financial growth, the big question remains: is United Rentals undervalued at current levels, or have investors already accounted for all the future growth? Is there a buying opportunity, or is the market one step ahead?

Most Popular Narrative: Fairly Valued

With United Rentals closing at $1,000.50 and the most widely followed narrative setting fair value at $960.48, expectations are firmly in line with current trading levels. The narrative’s fair value calculation weighs near-term growth forecasts and profitability against today’s market optimism.

"United Rentals is positioning itself as the partner of choice with its focus on operational excellence and innovation. This approach is expected to drive revenue growth in 2025 and beyond. The company is expanding its Specialty business through new cold starts, which grew 22% year-over-year and 15% pro forma. This growth is anticipated to positively impact both revenue and net margins as the business becomes a larger share of total sales."

Read the complete narrative.

Curious what powers the narrative’s fair value? Hint: Analysts are factoring in aggressive expansion in certain segments and bold upgrades in future profitability. What kind of growth runway and margin improvement are they banking on? Unlock all the details that might surprise you in the full narrative.

Result: Fair Value of $960.48 (ABOUT RIGHT)

Have a read of the narrative in full and understand what's behind the forecasts.

However, risks such as project delays resulting from higher interest rates or increased costs could challenge United Rentals' growth expectations and reshape the investment narrative.

Find out about the key risks to this United Rentals narrative.

Another View: The SWS DCF Model’s Take

Taking a step back from market multiples, our SWS DCF model offers its own perspective. According to this model, United Rentals is trading above its estimated fair value of $677.15, which suggests the shares may be overvalued based on projected long-term cash flows. If true, this could indicate downside risk, or it may reflect market optimism that the model does not capture.

Look into how the SWS DCF model arrives at its fair value.

Build Your Own United Rentals Narrative

If you have a different perspective or want to dig into the numbers on your own, it takes just a few minutes to create your own view, your way with Do it your way.

A great starting point for your United Rentals research is our analysis highlighting 1 key reward and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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