Episode Details

EquipmentShare (EQPT) Q2 2026 — Q2 2026 (three months to June 30; the Item 2.02 8-K cleared EDGAR at 16:48 ET on Wednesday August 12, AFTER the close - so the reaction session is Thursday August 13, up 3.53 pct to USD21.41 on 5.0M shares.) EquipmentShare grew revenue 26 pct to USD1,449M and Rental Segment revenue 39.5 pct, and reported Adjusted Core EBITDA of USD531M - so it now screens at 4.4x EV/EBITDA against United Rentals at 10.8x. That 4.4x is the wrong number: 56.2 pct of the fleet it rents out belongs to third-party OWN Program participants. THE CALL: SPEC BUY (3/5, MEDIUM - THE DISCOUNT IS REAL, BUT HALF OF IT IS AN ADD-BACK) — base-case value ~$24.83 vs ~$20.63 today. KEY METRICS: - CALL: SPEC BUY, 3/5. Fair value USD24.83 against the USD20.63 close, about 20 pct upside, at 7.0x the FY2026 Adjusted Core EBITDA guidance midpoint of USD2,002M with the leased fleet in enterprise value at the company's own USD4,090M appraisal - within 1.3 pct of the USD24.50 median of the four post-May Street targets. - THE FLEET: original equipment cost under management was USD9,851M at June 30, up 34 pct - USD4,235M EquipmentShare-owned, USD5,533M OWN Program fleet owned by third-party participants, USD83M leased. That is 56.2 pct by dollars, 89,775 machines by count. Guidance holds it at 55-60 pct of OEC. - THE ADD-BACKS: net income of USD19M plus tax, USD113M of D&A, USD73M of interest and USD26M of stock comp gives EBITDA of USD245M. Add USD234M of OWN payouts and USD60M of start-up costs and you get Adjusted Core EBITDA of USD531M - 55.4 pct of it is those two lines. The payout share has gone 39.8 to 43.8 to 47.8 pct. - WHAT THE PAYOUTS ARE: the 10-Q accounts for the OWN Program under ASC 842 as a lease in which EquipmentShare is the LESSEE. The rent is a share of what each machine earns, so it is a VARIABLE lease payment excluded from the lease liability - the balance sheet's USD769M supports the real estate, not the fleet. - LEVERAGE AND CASH: the company's own schedule divides USD3,263M of net debt by EBITDA of USD847M PLUS USD245M of start-up costs to print 3.0x - not by Adjusted Core EBITDA, on which the same debt prints 1.7x. Meanwhile operating activities USED USD142M of cash in the first half. United Rentals runs 1.8x. - IS THE ADD-BACK FAIR? On the margin, yes, and we say so: a dollar of OWN fleet costs 15.1 pct a year in payouts, a dollar of owned fleet 14.7 pct in depreciation and interest. The MULTIPLE is where it breaks - enterprise value covers only the USD4,235M the company actually owns, while the EBITDA carries all USD9,851M. - THE MULTIPLE, REPAIRED: put the leased fleet into enterprise value at the USD4,090M appraisal and EQPT is at 6.5x guided EBITDA; take the USD957M of guided payouts out of EBITDA instead and it is 8.5x. United Rentals is 10.8x. The screen says a 59 pct discount; corrected it is 40 pct - and a half turn is USD3.95 a share. What to watch: UP: mature sites reach the guided 264 from 186 while start-up costs stay near USD60M a quarter, and OWN appraisals hold near 74 pct of cost. DOWN: used-equipment values soften, enrolment slows, and the fleet has to come back on balance sheet at 7.125 pct. Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision. Learn investing free in the Charged Alpha app: https://chargedalpha.com/app?source=youtube&ref=video Educational only. Not financial advice.