CTOS Stock Analysis

Custom Truck One Source Inc
INDUSTRIALS RENTAL & LEASING SERVICES

Back to Winners View Yahoo Finance Chart Buy on the Dip

Strong Caution Mixed Weak Unavailable

StockValueFinder Grade

41.67 / 100

Weak

Confidence: Very High (91.0%) Coverage: 91.0%

Business Quality 29.5

Financial Strength 47.5

Earnings & Growth 35.6

Valuation 25.7

Market Strength 83.5

The grade combines Business Quality, Financial Strength, Earnings & Growth, Valuation, and Market Strength. Rating and Trend remain separate signals.

Rating AVOID

Avoid

The screening rules are warning against this setup.

Rating is the simple decision label from the screening rules.

Trend NEUTRAL / WATCH

Watch

The trend is interesting but needs confirmation.

Trend shows whether price action is helping or hurting the setup.

P/E Ratio 100.67

High Expectations

Very high P/E requires strong future results to justify the price.

P/E shows how much investors pay for each dollar of earnings.

ROIC -0.96%

Poor

Negative ROIC suggests capital is not being used profitably.

ROIC measures how efficiently capital turns into profit.

Debt Payback -15.05 yrs

Unavailable

Debt payback is unavailable or not meaningful.

Debt payback estimates how quickly debt could be covered.

Interest Coverage 0.90x

Weak

Low coverage can make debt more risky.

Interest coverage shows how easily earnings cover interest costs.

Price $9.06

Market Price

Price alone is not a buy or sell signal.

Price should be judged with valuation, quality, and trend.

Last updated: 2026-10-25 21:52:25

Performance Overview

Trailing adjusted-close returns as of 2026-07-02. Benchmark is SPY.

YTD Return

CTOS +74.31%

SPY +9.80%

1-Year Return

CTOS +100.80%

SPY +21.37%

3-Year Return

CTOS N/A

SPY +74.40%

5-Year Return

CTOS N/A

SPY +83.76%

Returns are calculated from adjusted close prices and may differ from broker or research-site totals depending on data source, dividend handling, benchmark choice, and latest available trading date.

Legacy Screening Checks

This page uses cached SQL data from the latest StockValueFinder scan, so it loads fast without hitting Alpha Vantage on every page view.

27%

EPS Strength

FAIL

Looks for positive and improving earnings per share.

ROIC 10%+

FAIL

Looks for strong return on invested capital.

Interest Coverage 6+

FAIL

Checks whether operating income comfortably covers interest expense.

Debt Payback ≤ 3 Years

PASS

Checks whether free cash flow could pay down long-term debt quickly.

P/E 15 or Less

FAIL

Checks whether valuation is reasonable under the current rule set.

Moving Average Trend

NEUTRAL / WATCH

Uses 20-day, 50-day, and 200-day moving averages for entry timing context.

A high StockValueFinder score is a research signal, not a guarantee. Strong companies can still fall during recessions, sector downturns, valuation resets, or company-specific events. Always review the business, risks, SEC filings, valuation, and your personal investment goals before buying.

Cached Technical Data

Moving average values from the latest stored scan.

20-Day MA9.33

50-Day MA9.39

200-Day MA8.77

MA Score3

Latest Published Stock Research

Research generated: October 24, 2026

CTOS Stock Analysis: Why Custom Truck One Source Inc Scored 27% in Stock Value Finder

Custom Truck One Source Inc (CTOS): A Detailed Educational Stock Research Review

Overview of Custom Truck One Source Inc (CTOS)

Custom Truck One Source Inc (CTOS) operates in the industrials sector, specifically within the rental and leasing services industry. The company provides specialized equipment rental, leasing, and sales solutions primarily to infrastructure and energy markets. This educational review from StockValueFinder.com examines CTOS using a disciplined, number-driven approach to help investors understand how to evaluate stocks based on fundamental and valuation metrics.

StockValueFinder assigns CTOS a score of 27% and a rating of **AVOID**. This rating reflects a combination of weak financial performance, high valuation, and concerning capital efficiency metrics. Below, we break down each key metric to explain why CTOS scored poorly and what investors should look for when evaluating other stocks.

Why the StockValueFinder Score Matters

The StockValueFinder score is a composite measure that evaluates a stock across multiple financial and valuation tests. Each test is designed to assess a specific aspect of a company’s financial health, efficiency, or valuation discipline. The score ranges from 0% to 100%, with higher scores indicating stronger overall fundamentals and more attractive valuations.

A score of 27% places CTOS in the **AVOID** category. This means the stock failed several critical tests, signaling potential risks or weaknesses that investors should carefully consider. The score is not a prediction of future performance but rather a snapshot of how CTOS compares to disciplined financial benchmarks.

EPS Strength and Consistency

What Is EPS and Why Does It Matter?

Earnings per share (EPS) measures a company’s profitability on a per-share basis. Consistent and growing EPS is often a sign of a well-managed business with stable or improving earnings power. StockValueFinder evaluates EPS strength to determine whether a company has demonstrated reliable profitability over time.

How StockValueFinder Evaluates EPS

StockValueFinder looks for

**Consistent EPS growth**: Companies with steady or rising EPS are generally preferred. - **Positive EPS**: Negative or erratic EPS can signal financial instability or operational challenges. - **Historical trends**: A track record of profitability is more reassuring than a single strong quarter.

CTOS EPS Test Result

For CTOS, the EPS test result is **Did not pass**. While exact EPS values are not supplied, the system’s failure indicates that CTOS did not meet the criteria for consistent or positive earnings. This could mean the company has experienced losses, volatility, or irregular earnings patterns in recent periods.

Example for Learning

Consider two hypothetical companies

**Company A**: Reports EPS of $1.20, $1.35, $1.40, and $1.50 over four years. This shows consistent growth and passes the EPS test. - **Company B**: Reports EPS of $0.80, -$0.20, $0.50, and $1.00. The negative EPS and volatility would likely fail the test.

Investors should prioritize companies with stable or improving EPS, as this often reflects operational strength and financial resilience.

ROIC and Capital Efficiency

What Is ROIC?

Return on invested capital (ROIC) measures how effectively a company uses its capital to generate profits. It is calculated as: **ROIC = Net Operating Profit After Tax (NOPAT) / Invested Capital**

ROIC helps investors determine whether a company is deploying capital efficiently. A high ROIC suggests the company is generating strong returns relative to the capital it has invested in the business.

What Is a Strong ROIC?

StockValueFinder generally prefers ROIC of **10% or higher**. This threshold indicates that the company is generating returns above its cost of capital, which is typically considered a sign of a competitive advantage or strong management.

**Strong ROIC**: 10% or higher (e.g., 15% ROIC suggests efficient capital use). - **Weak ROIC**: Below 5% (e.g., 3% ROIC may indicate poor capital allocation or weak business economics).

CTOS ROIC

CTOS has an ROIC of **-0.96%**. This negative ROIC means the company is not generating sufficient returns on its invested capital. In fact, it is losing money on its capital investments, which is a red flag for investors.

Why CTOS Failed the ROIC Test

A negative ROIC is a clear failure of the test. It suggests that CTOS is struggling to generate profits from its operations, which could be due to high costs, weak pricing power, or inefficient capital deployment.

Example for Learning

**Company X**: ROIC of 12%. This company is generating strong returns on its capital, likely due to efficient operations or a competitive advantage. - **Company Y**: ROIC of 4%. This company is barely covering its cost of capital, which may indicate a weak or highly competitive business model.

Investors should prioritize companies with ROIC above 10%, as these businesses are more likely to create long-term value.

Interest Coverage and Financial Safety

What Is Interest Coverage?

Interest coverage measures a company’s ability to pay the interest on its debt. It is calculated as: **Interest Coverage = Earnings Before Interest and Taxes (EBIT) / Interest Expense**

A higher interest coverage ratio indicates that the company can comfortably service its debt, while a low ratio suggests financial strain.

What Is a Strong Interest Coverage Ratio?

StockValueFinder prefers an interest coverage ratio of **6 or higher**. This threshold ensures that the company has a sufficient buffer to cover its interest obligations even if earnings decline.

**Strong interest coverage**: 6x or higher (e.g., 8x means the company earns 8 times its interest expense). - **Weak interest coverage**: Below 2x (e.g., 1.5x means the company is barely covering its interest payments).

CTOS Interest Coverage Test Result

CTOS **did not pass** the interest coverage test. While the exact interest coverage ratio is not supplied, the failure suggests that CTOS’s earnings are not sufficient to comfortably cover its interest expenses. This raises concerns about the company’s financial stability and ability to manage its debt load.

Example for Learning

**Company M**: Interest coverage of 10x. This company has strong earnings relative to its interest obligations and passes the test. - **Company N**: Interest coverage of 2x. This company is at risk of financial distress if earnings decline, and it fails the test.

Investors should prioritize companies with interest coverage of 6x or higher to reduce the risk of financial instability.

Debt Payback and Balance Sheet Discipline

What Is Debt Payback?

Debt payback measures how long it would take a company to pay off its debt using its current earnings. It is calculated as: **Debt Payback Years = Total Debt / Annual Free Cash Flow**

A shorter debt payback period indicates a stronger balance sheet and lower financial risk.

What Is a Strong Debt Payback Period?

StockValueFinder prefers a debt payback period of **3 years or less**. This ensures that the company can quickly reduce its debt burden and avoid financial strain.

**Strong debt payback**: 3 years or less (e.g., 1.5 years means the company can pay off debt quickly). - **Weak debt payback**: 5 years or more (e.g., 7 years suggests high financial risk).

CTOS Debt Payback

CTOS has a debt payback period of **-15.05 years**. The negative value indicates that the company is not generating positive free cash flow, making it impossible to pay down debt under current conditions. This is a significant red flag, as it suggests the company is relying on external financing or asset sales to meet its obligations.

Why CTOS Passed the Debt Payback Test

Despite the negative debt payback period, StockValueFinder marked this test as **passed**. This is unusual, as a negative debt payback period typically indicates severe financial distress. The system may have applied a different threshold or weighting for this metric, but the negative value remains a major concern for investors.

Example for Learning

**Company P**: Debt payback of 2 years. This company has a strong balance sheet and can quickly reduce its debt. - **Company Q**: Debt payback of 8 years. This company is highly leveraged and may struggle to service its debt if earnings decline.

Investors should prioritize companies with debt payback periods of 3 years or less to minimize financial risk.

P/E Ratio and Valuation Discipline

What Is the P/E Ratio?

The price-to-earnings (P/E) ratio measures a company’s stock price relative to its earnings per share. It is calculated as: **P/E Ratio = Stock Price / Earnings Per Share**

The P/E ratio helps investors assess whether a stock is overvalued or undervalued relative to its earnings.

What Is a Strong P/E Ratio?

StockValueFinder prefers a P/E ratio of **15 or lower** for valuation discipline. This threshold ensures that investors are not overpaying for earnings, which can limit downside risk.

**Strong P/E**: 15 or lower (e.g., a P/E of 10 suggests the stock is reasonably valued). - **Weak P/E**: 25 or higher (e.g., a P/E of 40 may indicate overvaluation, especially if earnings are not growing rapidly).

CTOS P/E Ratio

CTOS has a P/E ratio of **100.67**. This extremely high P/E ratio suggests that investors are paying a significant premium for the company’s earnings. Such a high valuation is difficult to justify unless the company is expected to deliver explosive earnings growth in the future.

Why CTOS Failed the P/E Valuation Test

A P/E ratio of 100.67 is well above StockValueFinder’s preferred threshold of 15. This indicates that CTOS is trading at a valuation that is not supported by its current earnings. Investors should be cautious about paying such a high multiple, as it leaves little room for error if earnings disappoint.

Example for Learning

**Company R**: P/E of 12. This company is attractively valued relative to its earnings and passes the test. - **Company S**: P/E of 50. This company is trading at a high valuation, which may not be justified unless earnings grow rapidly.

Investors should prioritize stocks with P/E ratios of 15 or lower to avoid overpaying for earnings.

Moving Average Trend and Entry Timing

What Is the Moving Average Signal?

The moving average signal is a technical indicator that helps investors assess the trend of a stock’s price. StockValueFinder uses moving averages to determine whether a stock is in an uptrend, downtrend, or neutral trend.

CTOS Moving Average Signal

CTOS has a moving average signal of **NEUTRAL / WATCH**. This means the stock is not clearly trending upward or downward, and investors should monitor it for potential entry or exit opportunities.

Why the Moving Average Signal Matters

While the moving average signal is not a buy or sell recommendation, it provides context for timing decisions. A **NEUTRAL / WATCH** signal suggests that the stock is not exhibiting strong momentum in either direction, which may make it less attractive for trend-following investors.

Example for Learning

**Stock T**: Moving average signal of **BULLISH**. This stock is in an uptrend and may be more attractive for momentum investors. - **Stock U**: Moving average signal of **BEARISH**. This stock is in a downtrend and may be riskier for investors.

Investors should use moving average signals as one tool among many to assess a stock’s trend and potential timing opportunities.

Overall Financial Strengths and Weaknesses

Strengths

1. **Debt Payback Test Passed**: While the negative debt payback period is concerning, the system marked this test as passed, which may indicate some flexibility in the company’s balance sheet. 2. **Industry Position**: CTOS operates in the rental and leasing services industry, which can provide steady demand from infrastructure and energy markets.

Weaknesses

1. **Negative ROIC (-0.96%)**: The company is not generating returns on its invested capital, which is a major red flag. 2. **High P/E Ratio (100.67)**: The stock is trading at an extremely high valuation relative to its earnings, which is difficult to justify. 3. **Failed EPS Test**: The company has not demonstrated consistent or positive earnings, raising concerns about profitability. 4. **Failed Interest Coverage Test**: The company’s earnings are not sufficient to comfortably cover its interest expenses, indicating financial risk. 5. **Negative Debt Payback (-15.05 years)**: The company is not generating positive free cash flow, making it impossible to pay down debt under current conditions.

Risks and Limitations

1. **Financial Instability**: The combination of negative ROIC, failed interest coverage, and negative debt payback suggests that CTOS is facing significant financial challenges. Investors should be cautious about companies with weak balance sheets and poor capital efficiency. 2. **High Valuation**: The P/E ratio of 100.67 is extremely high, which means the stock is vulnerable to sharp declines if earnings disappoint or growth slows. 3. **Operational Risks**: The rental and leasing services industry is cyclical and sensitive to economic conditions. A downturn in infrastructure or energy markets could further strain CTOS’s financial performance. 4. **Lack of Entry Signal**: The **NEUTRAL / WATCH** moving average signal and lack of entry or risk levels suggest that CTOS is not currently exhibiting strong momentum or clear buying opportunities.

Educational Conclusion

This educational review of Custom Truck One Source Inc (CTOS) demonstrates how investors can use disciplined financial metrics to evaluate stocks. CTOS scored poorly across several key tests, including ROIC, interest coverage, EPS consistency, and valuation. While the company passed the debt payback test, the negative debt payback period and other weaknesses raise significant concerns.

Key Takeaways for Investors

1. **EPS Consistency Matters**: Look for companies with stable or growing earnings, as this often reflects operational strength. 2. **ROIC Above 10% Is Preferred**: A high ROIC indicates efficient capital use and a potential competitive advantage. 3. **Interest Coverage of 6x or Higher Is Safer**: This ensures the company can comfortably service its debt. 4. **Debt Payback of 3 Years or Less Is Ideal**: A shorter debt payback period reduces financial risk. 5. **P/E Ratio of 15 or Lower Is More Attractive**: Avoid overpaying for earnings to limit downside risk. 6. **Moving Average Signals Provide Context**: Use trend indicators to assess momentum, but do not rely on them exclusively.

Final Thoughts

CTOS’s score of 27% and **AVOID** rating reflect its weak financial performance, high valuation, and operational challenges. While no stock is without risk, investors should prioritize companies that pass multiple fundamental and valuation tests. This review is intended to educate readers on how to evaluate stocks using clear, number-driven metrics.

This article is for research and educational purposes only. It is not personal financial advice, investment advice, or a recommendation to buy or sell any security.

Research links: Yahoo Finance | Seeking Alpha | Finviz | SEC Filings

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