On Friday, Stifel revised its price target for WillScot (NASDAQ:WSC) Mobile Mini (NASDAQ:MINI_old) Holdings Corp. (NASDAQ:WSC), reducing it to $48 from the previous $50, but kept a Buy rating on the stock. The company, which specializes in mobile office and storage solutions, reported that revenues and adjusted EBITDA surpassed the revised expectations, despite a decrease in units on rent in both of its operating segments.
WillScot Mobile Mini's total revenues saw a 3.8% increase, buoyed by strong rental rates, which rose by 11% in the modular space and 22% in storage. However, the adjusted EBITDA margin contracted by 150 basis points year-over-year to 42.2%, and the gross margin declined by 310 basis points to 54.0%. These figures reflect some contraction in profitability compared to the previous year.
The company has faced a challenging start to the year but has decided to maintain its guidance for the full year. According to the firm's outlook, storage units on rent are anticipated to continue facing headwinds, whereas the modular segment is expected to see improvement.
For the upcoming months, WillScot Mobile Mini anticipates revenue growth, driven by an increase in modular activations and an improvement in margins in the second half of 2024. The company's strategic focus seems to be on leveraging the strength in its modular segment to counterbalance the pressures in the storage unit rentals.
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