Custom Truck One Source (NYSE:CTOS) Shares Gap Down - Time to Sell?

Key Points

• CTOS shares opened sharply lower, falling from a prior close of $9.01 to $8.26, despite later trading near $9.70.
• Third-quarter revenue rose 2.7% year over year to $495.2 million, rental revenue increased 20.1%, and operating cash flow more than doubled; management also raised its 2026 adjusted EBITDA and specialty-equipment rental guidance.
• Revenue missed analyst expectations, net margin remained low at 1.05%, and the company carries significant leverage with a 2.03 debt-to-equity ratio. Analysts’ consensus rating is Hold, with a $12 average price target versus recent trading levels.

Custom Truck One Source, Inc. (NYSE:CTOS - Get Free Report)'s share price gapped down before the market opened on Tuesday. The stock had previously closed at $9.01, but opened at $8.26. Custom Truck One Source shares last traded at $9.7040, with a volume of 110,862 shares traded.

Key Headlines Impacting Custom Truck One Source

Here are the key news stories impacting Custom Truck One Source this week:

• Positive Sentiment: Management raised its full-year 2026 adjusted EBITDA and specialty equipment rental (SER) revenue guidance, signaling confidence in demand and operating performance. Custom Truck One Source 2026 earnings guidance
• Positive Sentiment: Third-quarter revenue increased 2.7% year over year to $495.2 million, while rental revenue rose 20.1%. Gross profit and operating profit also improved, and the company generated $163.5 million in operating cash flow, more than double the prior-year level. Custom Truck One Source third-quarter results
• Positive Sentiment: Cantor Fitzgerald reaffirmed its “overweight” rating and assigned a $14 price target, implying substantial upside from recent trading levels. Cantor Fitzgerald CTOS rating
• Neutral Sentiment: CTOS reported quarterly earnings of $0.01 per share, matching consensus and improving from a $0.03-per-share loss a year earlier. However, net margin remained low at 1.05%, highlighting limited bottom-line profitability. CTOS matches third-quarter earnings estimates
• Negative Sentiment: Revenue of $495.2 million missed analyst expectations of approximately $516.5 million, with weather-related impacts weighing on results. The company also has substantial liabilities, which may keep investors focused on leverage and cash needs. CTOS third-quarter revenue

Wall Street Analyst Weigh In

CTOS has been the topic of a number of analyst reports. Robert W. Baird boosted their price objective on shares of Custom Truck One Source from $10.00 to $12.00 and gave the company a "neutral" rating in a research note on Tuesday, August 4th. DA Davidson restated a "buy" rating and issued a $13.00 target price on shares of Custom Truck One Source in a research note on Tuesday, September 15th. Zacks Research downgraded shares of Custom Truck One Source from a "strong-buy" rating to a "hold" rating in a report on Monday, October 5th. Cantor Fitzgerald reissued an "overweight" rating and set a $14.00 price target on shares of Custom Truck One Source in a report on Tuesday. Finally, Oppenheimer raised their price objective on shares of Custom Truck One Source from $11.00 to $13.00 and gave the company an "outperform" rating in a research report on Wednesday, August 5th. Four research analysts have rated the stock with a Buy rating, three have issued a Hold rating and one has assigned a Sell rating to the company. Based on data from MarketBeat, the stock currently has a consensus rating of "Hold" and a consensus price target of $12.00.

Custom Truck One Source Price Performance

The company has a debt-to-equity ratio of 2.03, a current ratio of 1.34 and a quick ratio of 0.29. The company has a 50-day simple moving average of $9.36 and a 200-day simple moving average of $8.74. The stock has a market cap of $2.29 billion, a PE ratio of 112.28 and a beta of 1.43.

Custom Truck One Source (NYSE:CTOS - Get Free Report) last issued its earnings results on Monday, October 26th. The company reported $0.01 EPS for the quarter, hitting the consensus estimate of $0.01. Custom Truck One Source had a net margin of 1.05% and a return on equity of 2.66%. The company had revenue of $495.22 million for the quarter, compared to analyst estimates of $516.51 million. During the same period in the previous year, the firm earned ($0.03) EPS. The business's revenue was up 2.7% on a year-over-year basis. Sell-side analysts anticipate that Custom Truck One Source, Inc. will post 0.13 EPS for the current fiscal year.

Institutional Investors Weigh In On Custom Truck One Source

Hedge funds and other institutional investors have recently modified their holdings of the stock. Dimensional Fund Advisors LP grew its holdings in shares of Custom Truck One Source by 15.3% in the 1st quarter. Dimensional Fund Advisors LP now owns 5,602,838 shares of the company's stock worth $36,806,000 after acquiring an additional 741,857 shares during the period. Arrowstreet Capital Limited Partnership grew its holdings in Custom Truck One Source by 154.9% in the first quarter. Arrowstreet Capital Limited Partnership now owns 1,056,550 shares of the company's stock valued at $6,942,000 after purchasing an additional 642,109 shares during the last quarter. Heartland Advisors Inc. grew its holdings in Custom Truck One Source by 42.9% in the first quarter. Heartland Advisors Inc. now owns 1,000,000 shares of the company's stock valued at $6,570,000 after purchasing an additional 300,000 shares during the last quarter. Bank of New York Mellon Corp purchased a new position in shares of Custom Truck One Source in the second quarter valued at $1,842,000. Finally, Tidal Investments LLC purchased a new position in shares of Custom Truck One Source in the second quarter valued at $987,000. 90.07% of the stock is currently owned by institutional investors and hedge funds.

Custom Truck One Source Company Profile

Custom Truck One Source, Inc is a specialty equipment provider serving the utility, telecommunications, rail, and related infrastructure industries. The company sells, rents, leases, and services new and used trucks and equipment, including aerial devices, cranes, digger derricks, bucket trucks, service trucks, trailers, and other specialized vehicles.

Through its parts and service operations, Custom Truck One Source provides replacement parts, maintenance, repair, refurbishment, and field support for specialty equipment.

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