Custom Truck One Source Inc. Surfaces with Modest Earnings and a Stubborn Loss

Custom Truck One Source Inc. (CTO), the Kansas‑based heavy‑equipment retailer and rental firm, has just released its third‑quarter 2025 financial results. Despite a modest lift in revenue, the company’s earnings continue to fall into the negative territory, underscoring the fragility of its business model in a highly competitive industrial landscape.

Revenue Growth: A Glimmer or a Mirage?

The company reported total revenue of $482.1 million for the quarter ending September 30, 2025, a decline of $10.32 million from the analyst consensus of $492.4 million. This figure sits squarely between the year‑to‑date revenue of $1.80 billion reported last year and the analysts’ projection of $2.01 billion for the current fiscal year. In percentage terms, the revenue drop represents roughly 2.1 % below expectations, a modest shortfall that could be brushed aside as a cyclical dip in demand for trucks, aerial devices, and heavy‑equipment rentals.

However, the company’s revenue trend is not uniformly positive. While the quarter itself trailed estimates, the year‑to‑date revenue trajectory shows a 10.1 % rise from the previous year’s $447.2 million, suggesting that the company is still expanding its top line, albeit at a sluggish pace.

Earnings: A Persistent Downward Spiral

Earnings per share (EPS) for the quarter came in at -$0.03, missing the consensus of -$0.025 by $0.01. This negative figure is consistent with the company’s long‑standing earnings challenges, as evidenced by the historical EPS of -$0.07 in the same quarter of 2024. Analysts project a loss of -$0.159 per share for the entire fiscal year, a significant deterioration from last year’s -$0.120 loss.

The persistence of a negative EPS is a red flag for investors. Even with a higher revenue base, the company’s cost structure—likely driven by high inventory, rental logistics, and a sprawling service network across the United States, Canada, and Mexico—remains unsustainable. The company’s P/E ratio of -42.25 reflects this reality; a negative multiple is a clear indicator that the market does not see earnings potential in the current business model.

Guidance: Ambiguous Optimism

The company has reaffirmed its 2025 guidance, but the guidance is largely ambiguous. It does not provide specific targets for revenue growth, gross margin improvement, or cost‑control measures. Instead, it simply reiterates its expectation of a $2.01 billion revenue for the fiscal year and an EPS loss of -$0.159. In an environment where investors demand concrete action plans, this vague reassurance appears insufficient.

Market Reaction and Investor Sentiment

With a closing price of $6.61 on October 23, the stock has hovered close to its 52‑week high of $6.73 while remaining far above its 52‑week low of $3.18. Despite the company’s negative earnings, the stock’s price volatility suggests that the market remains bullish on the potential of the heavy‑equipment rental sector. However, the persistent losses and lack of a clear turnaround strategy temper this optimism.

Conclusion: A Company in Need of Fundamental Re‑Engineering

Custom Truck One Source Inc.’s latest quarterly results reveal a company that is still struggling to convert growing top‑line revenue into profitable growth. The persistent negative EPS, coupled with vague guidance and a high P/E ratio that indicates a lack of earnings confidence, signals a need for fundamental re‑engineering. Investors should scrutinize whether the company can realistically adjust its cost base, streamline operations, or pivot its business model to achieve sustainable profitability. Until such a strategy is clearly articulated and executed, the company’s stock remains a high‑risk play in the industrial sector.