Specialized equipment provider Custom Truck One Source is facing significant market turbulence after releasing its third-quarter 2025 financial results. The company’s failure to meet analyst expectations triggered a substantial sell-off, sending its stock value downward.
Market Reaction and Financial Performance
The immediate market response was severe, with the company’s shares plummeting 14.7 percent the day after the earnings announcement. This dramatic decline came as Custom Truck One Source reported adjusted earnings per share of -$0.03, falling short of the projected -$0.02. Revenue figures also disappointed, coming in at $482.1 million against expectations of $492.38 million.
Despite these headline disappointments, several operational metrics demonstrated underlying strength:
- Rental revenue showed robust growth, increasing 17.4 percent to $127.1 million
- Fleet utilization reached 79.3 percent, marking the highest level in more than two years
- New orders surged by an impressive 30 percent
- Adjusted EBITDA expanded by 20 percent year-over-year
Profitability Challenges and Future Outlook
Current performance is being hampered by margin compression within both the Truck and Equipment Sales and Equipment Rental and Services divisions. The company’s profitability is being affected by the sale of rental assets carrying lower margins. Nevertheless, management has reaffirmed its full-year 2025 guidance, signaling confidence in its strategic direction.
Should investors sell immediately? Or is it worth buying Custom Truck One Source?
Market researchers project that Custom Truck One Source will achieve profitability within the coming three years. They anticipate annual earnings growth of approximately 84.88 percent, substantially outpacing expected revenue growth of just 4.9 percent per year.
Valuation Considerations
From a valuation perspective, the equity presents potential opportunity for value-oriented investors. The stock trades at a price-to-sales ratio of 0.7, notably below the industry average of 1.2. While the company’s market capitalization of $1.364 billion reflects a 5 percent decline over the past month, it maintains a substantial 64 percent gain over the trailing twelve-month period.
The critical question facing investors is whether Custom Truck One Source can successfully stabilize its margins while meeting the market’s elevated growth expectations. The company’s upcoming quarterly results will determine whether the current price decline represents a buying opportunity or the beginning of a more prolonged period of weakness.
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