Mega Project Exposure And OWN Program Will Reshape Long Term Earnings Power

Catalysts

About EquipmentShare.com

EquipmentShare.com operates a tech enabled equipment rental and job site services platform focused on large, complex construction and industrial projects.

What are the underlying business or industry changes driving this perspective?

• Scaling exposure to large national and mega projects, including data centers, advanced manufacturing, energy and infrastructure, is reinforcing customer demand for a partner that can deploy thousands of machines quickly. This supports Rental segment revenue growth and the potential for higher adjusted core EBITDA over time.
• The proprietary T3 platform, built over more than a decade and used both internally and by customers, is OEM agnostic and tightly integrated into job site workflows. This can support higher customer spend per account, stronger retention and, in turn, Rental segment revenue and mature site EBITDA margins.
• Rapid, repeatable organic site openings, with more than 350 rental starts since founding and 95 added in 2025, are supported by strong pull from existing national and regional customers. This can shorten ramp times, lift mature site mix and support long run earnings and cash flow as start up costs roll off.
• A large and growing base of mature locations, with 186 sites at 54% mature site rental segment adjusted EBITDA margins and 16.5% mature site ROIC in 2025, provides visible embedded earnings potential as 166 growth sites progress along the maturity curve. This can support company wide margin and return on capital outcomes.
• The OWN program, which had US$4.9b of original equipment cost at year end 2025 and remains significantly oversubscribed, offers a capital efficient way to expand fleet under management using third party capital. This can support Rental segment revenue growth while tempering balance sheet leverage and supporting net income and free cash generation.
• Growing specialty and materials offerings, including a 34% revenue increase in specialty and revenue from T3 and materials that grew by more than 100% in 2025, deepen EquipmentShare.com’s position as a one stop job site partner. This can support higher wallet share, improved mature site margins and more resilient earnings across cycles.

Assumptions

How have these above catalysts been quantified?

• This narrative explores a more optimistic perspective on EquipmentShare.com compared to the consensus, based on a Fair Value that aligns with the bullish cohort of analysts.
• The bullish analysts are assuming EquipmentShare.com's revenue will grow by 24.8% annually over the next 3 years.
• The bullish analysts assume that profit margins will increase from 0.1% today to 7.7% in 3 years time.
• The bullish analysts expect earnings to reach $659.2 million (and earnings per share of $2.62) by about March 2029, up from $3.0 million today. The analysts are largely in agreement about this estimate.
• In order for the above numbers to justify the price target of the more bullish analyst cohort, the company would need to trade at a PE ratio of 11.8x on those 2029 earnings, down from 1904.7x today. This future PE is lower than the current PE for the US Trade Distributors industry at 20.1x.
• The bullish analysts expect the number of shares outstanding to grow by 6.41% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 9.49%, as per the Simply Wall St company report.

Risks

What could happen that would invalidate this narrative?

• Heavy reliance on mega projects and large national or regional contractors, which contribute roughly 89% to 90% of 2025 revenue, could become a weak point if long-duration projects are delayed, cancelled or scaled back over time. This would pressure Rental segment revenue growth and mature site earnings.
• The model depends on sustained organic expansion, with 166 sites still in the growth phase and US$252 million of new market start up costs in 2025. Any long term slowdown in customer led site ramping, tighter permitting or a weaker construction cycle could leave a larger base of subscale locations and weigh on net margins and return on invested capital.
• The OWN program, with US$4.9b of original equipment cost and OWN sales of US$1.3b in 2025, is funded by high net worth investors, family offices, institutions and ABS markets. Any structural pullback in third party appetite for this risk or a long term change in ABS market conditions could restrict fleet growth capacity and reduce both Rental segment revenue and OWN related contribution to earnings.
• The T3 platform and sensor to server technology stack are central to the customer value proposition and to OWN program transparency. Over time, increased competition from OEM telematics, construction software providers or large rental peers investing in similar capabilities could erode differentiation, lower customer wallet share and put pressure on pricing and mature site EBITDA margins.
• The business is capital intensive with US$2.1b to US$2.3b of gross CapEx planned for 2026, net rental CapEx of US$759 million to US$839 million and a net leverage ratio of 3.2x at the end of 2025. A prolonged period of higher funding costs, tighter credit availability or weaker used equipment values could increase interest expense, constrain reinvestment in the fleet and weigh on net income and free cash generation.

Valuation

How have all the factors above been brought together to estimate a fair value?

• The assumed bullish price target for EquipmentShare.com is $63.0, which represents up to two standard deviations above the consensus price target of $44.56. This valuation is based on what can be assumed as the expectations of EquipmentShare.com's future earnings growth, profit margins and other risk factors from analysts on the bullish end of the spectrum.
• However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $63.0, and the most bearish reporting a price target of just $31.0.
• In order for you to agree with the more bullish analyst cohort, you'd need to believe that by 2029, revenues will be $8.5 billion, earnings will come to $659.2 million, and it would be trading on a PE ratio of 11.8x, assuming you use a discount rate of 9.5%.
• Given the current share price of $22.74, the analyst price target of $63.0 is 63.9% higher.
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.