Earnings results often indicate what direction a company will take in the months ahead. With Q3 behind us, let’s have a look at Custom Truck One Source (NYSE: CTOS) and its peers.

Historically, specialty equipment distributors have boasted deep selection and expertise in sometimes narrow areas like single-use packaging or unique lighting equipment. Additionally, the industry has evolved to include more automated industrial equipment and machinery over the last decade, driving efficiencies and enabling valuable data collection. Specialty equipment distributors whose offerings keep up with these trends can take share in a still-fragmented market, but like the broader industrials sector, this space is at the whim of economic cycles that impact the capital spending and manufacturing propelling industry volumes.

The 8 specialty equipment distributors stocks we track reported a satisfactory Q3. As a group, revenues along with next quarter’s revenue guidance were in line with analysts’ consensus estimates.

Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 9.7% since the latest earnings results.

Custom Truck One Source (NYSE: CTOS)

Inspired by a family gas station, Custom Truck One Source (NYSE: CTOS) is a distributor of trucks and heavy equipment.

Custom Truck One Source reported revenues of $482.1 million, up 7.8% year on year. This print fell short of analysts’ expectations by 1.5%, but it was still a strong quarter for the company with a beat of analysts’ EPS estimates and an impressive beat of analysts’ adjusted operating income estimates.

Custom Truck One Source achieved the highest full-year guidance raise of the whole group. Investor expectations, however, were likely higher than Wall Street’s published projections, leaving some wishing for even better results (analysts’ consensus estimates are those published by big banks and advisory firms, not the investors who make buy and sell decisions). The stock is down 14.2% since reporting and currently trades at $5.79.

Is now the time to buy Custom Truck One Source? Access our full analysis of the earnings results here, it’s free for active Edge members.

Best Q3: Richardson Electronics (NASDAQ: RELL)

Founded in 1947, Richardson Electronics (NASDAQ: RELL) is a distributor of power grid and microwave tubes as well as consumables related to those products.

Richardson Electronics reported revenues of $54.61 million, up 1.6% year on year, outperforming analysts’ expectations by 6%. The business had an incredible quarter with a beat of analysts’ EPS and EBITDA estimates.

Richardson Electronics scored the biggest analyst estimates beat among its peers. Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 2.2% since reporting. It currently trades at $10.38.

Is now the time to buy Richardson Electronics? Access our full analysis of the earnings results here, it’s free for active Edge members.

Weakest Q3: Alta (NYSE: ALTG)

Founded in 1984, Alta Equipment Group (NYSE: ALTG) is a provider of industrial and construction equipment and services across the Midwest and Northeast United States.

Alta reported revenues of $422.6 million, down 5.8% year on year, falling short of analysts’ expectations by 8.4%. It was a disappointing quarter as it posted a significant miss of analysts’ revenue and adjusted operating income estimates.

Alta delivered the weakest performance against analyst estimates and slowest revenue growth in the group. As expected, the stock is down 21.1% since the results and currently trades at $4.63.

Read our full analysis of Alta’s results here.

Karat Packaging (NASDAQ: KRT)

Founded as Lollicup, Karat Packaging (NASDAQ: KRT) distributes and manufactures environmentally-friendly disposable foodservice packaging solutions.

Karat Packaging reported revenues of $124.5 million, up 10.4% year on year. This print was in line with analysts’ expectations. More broadly, it was a slower quarter as it logged a significant miss of analysts’ EPS estimates.

The stock is down 7.4% since reporting and currently trades at $22.24.

Read our full, actionable report on Karat Packaging here, it’s free for active Edge members.

United Rentals (NYSE: URI)

Owning the largest rental fleet in the world, United Rentals (NYSE: URI) provides equipment rental and related services to construction, industrial, and infrastructure industries.

United Rentals reported revenues of $4.23 billion, up 5.9% year on year. This result beat analysts’ expectations by 1.6%. Aside from that, it was a mixed quarter as it also recorded a solid beat of analysts’ organic revenue estimates but a significant miss of analysts’ EPS estimates.

The stock is down 15.8% since reporting and currently trades at $835.31.

Read our full, actionable report on United Rentals here, it’s free for active Edge members.

Market Update

In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.

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