Alta Equipment Group Inc. (NYSE: ALTG)

Sector: Industrials Industry: Rental & Leasing Services CIK: 0001759824
Market Cap 223.35 Mn
P/B 77.02
P/E -2.72
P/S 0.11
ROIC (Qtr) 28.79
Div Yield % 2.49
Rev 1y % (Qtr) -5.18
Total Debt (Qtr) 1.21 Bn
Debt/Equity (Qtr) 418.52
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About

Investment thesis

Bull case

  • Tangible assets of 1.31B provide exceptional 79.64x coverage of deferred revenue 16.40M, showing strong service capability backing.
  • Robust tangible asset base of 1.31B provides 5.70x coverage of working capital 229.20M, indicating strong operational backing.
  • Tangible assets of 1.31B provide robust 15.64x coverage of other current liabilities 83.50M, indicating strong asset backing.
  • Operating cash flow of 34M fully covers other non-current liabilities 21.30M by 1.60x, showing strong long-term stability.
  • Strong tangible asset base of 1.31B provides 71.76x coverage of acquisition spending 18.20M, enabling strategic growth.

Bear case

  • Operating cash flow of 34M barely covers its investment activities of (27.50M), with a coverage ratio of -1.24, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • With cash reserves of 14.10M against inventory of 504.60M, the 0.03 cash-to-inventory ratio suggests potential liquidity risks if inventory turnover slows, particularly concerning given current supply chain volatilities.
  • Operating cash flow of 34M provides thin coverage of dividend payments of (5.80M) with a -5.86 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Cash reserves of 14.10M provide limited coverage of acquisition spending of 18.20M, which is 0.77x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Free cash flow of (9.60M) provides weak coverage of capital expenditures of 43.60M, with a -0.22 ratio suggesting additional external financing needs for growth initiatives.

Accounting Standards Update Breakdown of Revenue (2024)

Peer comparison

Companies in the Rental & Leasing Services
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 URI United Rentals, Inc. 55.62 Bn 22.30 3.45 15.35 Bn
2 FTAI FTAI Aviation Ltd. 27.80 Bn -179.72 106.00 3.45 Bn
3 AER AerCap Holdings N.V. 26.27 Bn 7.00 3.08 43.57 Bn
4 UHAL U-Haul Holding Co /NV/ 13.75 Bn 106.91 2.29 8.06 Bn
5 GATX Gatx Corp 9.00 Bn 53.16 6.81 9.03 Bn
6 R Ryder System Inc 8.88 Bn 17.80 0.70 7.65 Bn
7 AL Air Lease Corp 7.23 Bn 6.92 2.40 19.73 Bn
8 HRI Herc Holdings Inc 5.00 Bn 5,004.00 1.14 9.68 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.98 1.32
EV to Cash from Ops. EV/CFO 41.22 77.20
EV to Debt EV to Debt 1.15 3.45
EV to EBIT EV/EBIT 49.52 -105.66
EV to EBITDA EV/EBITDA 4.96 20.85
EV to Free Cash Flow [EV/FCF] EV/FCF -145.97 -1.38
EV to Market Cap EV to Market Cap 6.27 3.10
EV to Revenue EV/Rev 0.72 9.87
Price to Book Value [P/B] P/B 77.02 7.72
Price to Earnings [P/E] P/E -2.72 277.95
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) -9.34 3.00
Dividend Payout Ratio % Div Payout % (Qtr) -6.80 500.03
Dividend per Basic Share Div per Share (Qtr) 0.17 1.19
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) -57.58 6.22
Interest Coverage Int. cover (Qtr) 0.31 -60.94
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 29.34 17.05
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -3.42 54.66
Dividend Growth (1y) % Div 1y % (Qtr) -25.00 0.10
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 27.09 38.63
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -7.86 5.40
EBIT Growth (1y) % EBIT 1y % (Qtr) 9.69 2.84
EBT Growth (1y) % EBT 1y % (Qtr) -28.01 42.60
EPS Growth (1y) % EPS 1y % (Qtr) -46.78 243.85
FCF Growth (1y) % FCF 1y % (Qtr) -122.91 5.41
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -7.01 31.59
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 1.36 0.54
Cash Payout Ratio Cash Payout (Qtr) 0.08 0.03
Cash Ratio Cash Ratio (Qtr) 0.03 0.21
Current Ratio Curr Ratio (Qtr) 1.42 1.01
Debt to Equity Ratio Debt/Equity (Qtr) 418.52 20.57
Interest Cover Ratio Int Coverage (Qtr) 0.31 -60.94
Times Interest Earned Times Interest Earned (Qtr) 0.31 -60.94
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 8.50 35.32
EBIT Margin % EBIT Margin % (Qtr) 1.45 12.98
EBT Margin % EBT Margin % (Qtr) -3.16 3.50
Gross Margin % Gross Margin % (Qtr) 30.60 42.91
Net Profit Margin % Net Margin % (Qtr) -4.20 1.24