WILLSCOT HOLDINGS CORPORATION (WSC): what the price assumes

In the published model solve dated 2026-Q2, anchored at $26.56, WILLSCOT HOLDINGS CORPORATION (WSC) is priced for today's economics sustained for ~9.1 years. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-06-28.

Generated: 2026-08-10 · Exported: 2026-08-12 · Source: https://boothcheck.com/report/WSC

Headline

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

The operating-margin figure is value-band context at year 12: derived from the framework's value band, a separate calculation — not part of the priced-in solve.

Solve inputs: computed at a 8.6% cost of capital; growth searched up to the 25% self-funding ceiling; each 1pp moves the implied horizon ~2.1 years.

How unusual the bet is: high

Valuation X-Ray

The price is justified by relative-multiple and growth-DCF; asset-based land below the price.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

Families that justify the price: Relative, Growth Families that call it expensive: Asset

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 6.9%); the inversion above states its own rate.

Per-Model Detail (n=10)

Solvency

Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.

Bullet Takeaways

At $28.86 the price works out to roughly 50x company-wide operating income, which inverts into about nine years of operating growth held at the self-funding ceiling. That is the elevated end of plausible.

The cash-flow lenses tell a friendlier story than the earnings lenses. Reported EPS is negative, so book-value and earnings-yield models go dark, but Q1 2026 produced $115.6 million of adjusted free cash flow and the FCF-yield model lands well above today's price.

Management raised full-year guidance to about $2.25 billion of revenue and $915 million of adjusted EBITDA after a Q1 beat, with large projects and data-center demand offsetting soft local markets. The bet is that the leasing-growth inflection arrives in the second half.

Bull Case

The standard earnings screens miss what this business actually is, and that gap is the bull case. WillScot reports negative GAAP earnings, so the residual-income model goes dark (it reads a negative return on equity as capital destruction), the Graham and earnings-yield models refuse to run on non-positive EPS, and the excess-return models land near $5. Read those and you would walk away. But the business is a rental fleet, not an earnings compounder, and the cash it throws off is the real number. Q1 2026 generated $211.0 million of adjusted EBITDA and $115.6 million of adjusted free cash flow, and the FCF-yield models land near $20 to $22, well above the $28.86 price once you account for the leverage. The depreciation that drags reported earnings is non-cash; the fleet keeps earning rent long after it is written down.

The leasing economics are sticky in a way that does not show up in a single-year multiple. The filing reports an average lease duration, excluding seasonal portable storage units, of roughly 42 months as of year-end 2025, which it says produces strong operating income and predictable cash flow (FY2025 10-K, accession 0001647088-26-000011). On top of base rent, the company sells value-added products and services, lighting, space-optimization assets, perimeter solutions, and furnishings, that ride on each unit and lift revenue per unit over the life of a lease (FY2025 10-K, accession 0001647088-26-000011). That layered model is why management guides to revenue growth even when average units on rent have come down.

The near-term tape backs the inflection thesis. Q1 2026 revenue of $548.6 million beat the $523.4 million consensus and non-GAAP EPS of $0.21 beat $0.16 by more than 30%, prompting a raise of full-year guidance to about $2.25 billion of revenue and $915 million of adjusted EBITDA. Management pointed to accelerating large- and mega-project activity, with the data-center vertical expected to grow revenue about 50% this year and its project pipeline up 70%. Capital allocation is shareholder-friendly: the share count has been shrinking at roughly a 5.6% annual rate through buybacks, including a million shares for $17.4 million in the December quarter. Against the much larger United Rentals, WillScot occupies a defensible niche in modular space and portable storage where scale and a national branch network matter.

Bear Case

The valuation methods do not agree, and the bear case is that the conservative ones are telling the truth. The asset-based lenses mark the stock as roughly six times too expensive against tangible asset value, the excess-return and earnings-power models land near $5, and the residual-income model will not run at all because the return on equity is negative. Only the DCF and relative-multiple models reach the price, and they do so by extrapolating growth forward. When the cheap, accounting-anchored methods cluster far below the price and only the growth-dependent methods reach it, the honest read is that the price is borrowing heavily from a future that has to show up. The inversion makes the size of that loan explicit: at about 50x operating income, the price requires company-wide growth held near its 25% self-funding ceiling for roughly nine years, and historically only about 17% of comparable fast-growers sustained that pace that long.

The underlying volume trend complicates the growth story. The filing shows total average units on rent fell to 196,332 in 2025 from 221,235 in 2024, so the fleet is shrinking even as revenue per unit climbs (FY2025 10-K, accession 0001647088-26-000011). The company also recorded a $63.5 million increase in accounts-receivable write-offs as a reduction to revenue versus the prior year, a sign that some customers are struggling to pay (FY2025 10-K, accession 0001647088-26-000011). Management itself notes that reduced economic activity has historically cut portable-storage demand and that it reacts by cutting variable costs (FY2025 10-K, accession 0001647088-26-000011). A guidance raise built on large projects and data centers leans on a narrow set of end markets; if non-residential construction softens, the local-market weakness already visible spreads.

The balance sheet is the real constraint on the bet. Net debt sits near $3.5 billion against trailing operating income, putting net-debt-to-operating-income above 20x, and the filing notes interest expense is not separately broken out in a way that lets a clean coverage ratio be computed (FY2025 10-K, accession 0001647088-26-000011). The company reports compliance with all debt covenants, which is reassuring today, but a fleet-rental model carries fixed obligations that do not flex with demand (FY2025 10-K, accession 0001647088-26-000011). With Wall Street's median price target down around $24, below the current quote, the consensus already leans toward the conservative models rather than the DCF.

Valuation

The model spread is wide, which is the point. Reading the price against each family of method, the asset-based lenses say the stock is roughly six times its asset value, the earnings-power and excess-return models land near $5 because reported earnings are negative, and only the DCF (about $32 to $34), the relative-multiple model (about $31), and the cash-flow yield models (about $20 to $22, lower because of leverage) come anywhere near the $28.86 price. The earnings-anchored methods and the cash-flow-anchored methods disagree by a factor of several, and that disagreement traces directly to the heavy non-cash depreciation a rental fleet carries.

Inverting the price is the cleanest single read. At today's level the market is paying about 50x company-wide operating income, which the model translates into operating growth held at the roughly 25% self-funding ceiling for about nine years, discounted at an 8.8% cost of capital, with each percentage point of cost moving the implied horizon about two years. The near-term growth rate is within what the company has recently delivered; the stretch is in the duration, the nine years of sustained pace.

One measurement caveat is worth flagging. The trailing operating income the inversion prices and the EDGAR quarterly figure diverge by more than 40%, so the implied multiple depends on which operating-income basis you use. Either way, the conclusion holds: the price is justified by the relative-multiple and growth-DCF lenses and called expensive by the asset and earnings-power lenses. This is a bet on durable leasing growth and free cash flow, not on the current earnings line, which is negative.

Catalysts

The May Q1 2026 print already moved the stock and reset the bar. Revenue of $548.6 million beat consensus by about 5% and non-GAAP EPS of $0.21 beat by more than 30%, and management raised full-year guidance to roughly $2.25 billion of revenue and $915 million of adjusted EBITDA. For Q2 the company guided to about $585 million of revenue, up 7% sequentially, and roughly $223 million of adjusted EBITDA. The next earnings report is the test of whether the second-half leasing-growth inflection management described actually arrives, since the full-year raise back-loads the growth.

The data-center vertical is the catalyst to watch. Management expects about 50% revenue growth there this year with the opportunity pipeline up 70%, and a string of large-project wins would validate the durability the price requires. Capital return is a steady tailwind: the company bought back a million shares for $17.4 million in the December quarter and has been shrinking the share count at about a 5.6% annual rate. The chief risks to the timeline are a softening in non-residential construction, which would deepen the local-market weakness already visible, and the credit normalization implied by the rising receivable write-offs. Wall Street's median price target sits near $24, so the market is skeptical, and a clean second-half acceleration would be the surprise that re-rates the stock.

Sources: ChartMill: WSC Q1 2026 earnings beat and raised outlook; Seeking Alpha: WillScot raises FY2026 outlook; Motley Fool: WSC Q1 2026 transcript; Sahm Capital: WSC valuation after guidance raise; Public.com: WSC analyst forecast.

Peer Cohorts (Per Segment, With Filing Citations)

Core business (reported)

• MGRC (McGRATH RENTCORP)
• FY2025 10-K: …test equipment to become obsolete, resulting in impairment charges, which may negatively impact operating results and cash flows. If we do not effectively compete in the rental equipment market, our operating results will be materially and adversely affected. The electronic test equipment rental business is…
• FY2025 10-K: …of a number of factors, including equipment and labor availability, quality, price, - 21 - service, reliability, appearance, functionality and delivery terms. We may experience pricing pressures in our areas of operation in the future as some of our competitors seek to obtain market share by reducing prices. Some of…
• URI (United Rentals, Inc.)
• FY2025 10-K: …that the terms we negotiate are competitive and that there is sufficient product available to meet anticipated customer demand. We utilize a comprehensive selection process to determine our equipment vendors. We consider product capabilities and industry position, the terms being offered, product liability history,…
• FY2025 10-K: …by 90 basis points, from 2024, primarily due to the impact of inflation and normal cost variability, particularly in delivery and labor and benefits costs. Specialty . For the year ended December 31, 2025, equipment rentals gross profit increased by $57, and equipment rentals gross margin decreased by 450 basis…
• CTOS (Custom Truck One Source, Inc.)
• FY2025 10-K: …measure aids the Chief Operating Decision Maker ("CODM") in managing the inventory levels and rental fleet, entering into significant revenue contracts, expanding into new markets or launching new products, making capital expenditures, designing and implementing key marketing strategies, making personnel changes, and…
• FY2025 10-K: …OEC on rent yield. We also report sales order backlog related to our customers' orders as an indicator of the demand environment for our products. The table below presents these key measures. Year Ended December 31, (in $000s) 2025 2024 Change % Change Ending OEC (as of period end) $ 1,637,115 $ 1,515,461 $ 121,654…
• FTAI (FTAI AVIATION LTD.)
• FY2025 10-K: …of capital and/or to capital that may be committed for longer periods of time or may have different return thresholds than us, and thus these competitors may have certain advantages not shared by us. In addition, competitors may have incurred, or may in the future incur, leverage to finance their debt investments at…
• FY2025 10-K: …lessee defaulted, which could materially adversely affect our operating results and growth prospects. In addition, some of our counterparties may reside in jurisdictions with legal and regulatory regimes that make it difficult and costly to enforce such counterparties' obligations. We acquire a high concentration of…

Methodology Note

• Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
• Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
• Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
• Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.