Stock Analysis

What Does United Rentals, Inc.'s (NYSE:URI) Share Price Indicate?

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NYSE:URI
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United Rentals, Inc. (NYSE:URI) received a lot of attention from a substantial price increase on the NYSE over the last few months. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, what if the stock is still a bargain? Today I will analyse the most recent data on United Rentals’s outlook and valuation to see if the opportunity still exists.

Our analysis indicates that URI is potentially undervalued!

What's The Opportunity In United Rentals?

Good news, investors! United Rentals is still a bargain right now. My valuation model shows that the intrinsic value for the stock is $563.23, but it is currently trading at US$352 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, United Rentals’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

What does the future of United Rentals look like?

earnings-and-revenue-growth
NYSE:URI Earnings and Revenue Growth December 8th 2022

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. United Rentals' earnings over the next few years are expected to increase by 26%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? Since URI is currently undervalued, it may be a great time to increase your holdings in the stock. With an optimistic outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on URI for a while, now might be the time to make a leap. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy URI. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed investment decision.

If you'd like to know more about United Rentals as a business, it's important to be aware of any risks it's facing. For example, we've discovered 1 warning sign that you should run your eye over to get a better picture of United Rentals.

If you are no longer interested in United Rentals, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

What are the risks and opportunities for United Rentals?

United Rentals, Inc., through its subsidiaries, operates as an equipment rental company.

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Rewards

  • Price-To-Earnings ratio (15x) is below the US market (15.5x)

  • Earnings are forecast to grow 7.32% per year

  • Earnings have grown 5.3% per year over the past 5 years

Risks

  • Significant insider selling over the past 3 months

  • Has a high level of debt

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