$1.00
$6.00
bear $1.00
base $2.30
bull $6.00
margin of safety $1.00
market price* $13.59
EquipmentShare rents construction equipment through 352 branches, plus 9 dealership sites and 24 building-materials stores, across 45 states. Its software platform, T3, tracks each machine. The rental fleet was about 252,000 units with an original cost of $8.8 billion at the end of 2025, and about 56% of that fleet (by original cost) is enrolled in the company's OWN Program, in which outside owners' equipment is rented out by the company in exchange for a share of the rental income. Revenue was $4.38 billion in 2025, up 16% from $3.76 billion. Equipment rental was 56% of it, up 31% to $2.44 billion. The top five rental customers were only 3.8% of rental revenue. The company sold shares to the public in January 2026, and the filings give us only three years of financial history to work from. How we measured earnings. We start from operating cash flow and take out swings in receivables, inventory, prepaid costs, payables and accrued liabilities, which moved cash by about $166 million against us in 2025. We deduct stock compensation, and we deduct the fixed dividend on the perpetual preferred stock that stays outstanding, about $37 million a year. The hard judgement is how much of the equipment spending is just keeping the business standing still. In 2025 the company spent $1.78 billion on rental equipment and received $1.16 billion selling equipment, plus about $287 million on other property and software. Charging all of that net spending against a case that gives no credit for growth would be unfair, so we use depreciation and amortization ($365 million in 2025; $300 million of it on the rental fleet) as the cost of replacing worn-out equipment. On that basis owner earnings were about $61 million before the preferred dividend and $24 million after it in 2025, versus roughly $24 million and negative $16 million in 2024, and $63 million and $31 million in 2023. Per share on an as-converted basis that is $0.11, negative $0.07 and $0.14. The cause of the thin result is interest: cash interest was $272 million in 2025, up from $230 million and $200 million, on $3.3 billion of debt that includes second-lien notes at 8.0% to 9.0% and a $1.2 billion asset-backed revolver. Growth has been financed with debt, and so far the added fleet has not lifted earnings above what the interest bill absorbs. What is credited. We credit no growth in any case. The company has expanded quickly, but its record is only a few years long and the expansion has been funded by borrowing rather than by its own cash, so continued expansion is not something already secured. We do credit the money raised in the offering: $706 million of net proceeds received in January 2026, after year-end. The new shares are in our share count of roughly 252 million (about 214 million Class A and 38 million Class B), so the cash has to be counted too. We count it at face value, less the annual shortfall each case implies. Base case, $2.30 a share. Earnings continue at the 2025 level of about $65 million a year before stock compensation. Stock compensation rises to $45 million a year, the first-half 2026 figure of $45 million (versus $2 million in the first half of 2025) used as one year rather than doubled, because one half-year is not enough to set a higher run rate. After the $37 million preferred dividend that leaves a shortfall of about $17 million a year, which we run for ten years (about $125 million today) against the $706 million of offering cash: $581 million, or $2.30 a share. Growth in earnings is assumed to be zero in year one: owner earnings improved from a loss of $16 million to a profit of $24 million in 2025 after the preferred dividend, but on that tiny base the change says little, and we have no contracted or proven source of further growth to name. The operating business itself is worth nothing in this case because nothing named and evidenced produces surplus after interest, stock pay and the preferred dividend. Bear case, $1.00 a share. Same earnings, but stock compensation doubles to about $90 million a year, the first-half 2026 pace. The shortfall becomes about $62 million a year, about $456 million over ten years, leaving about $250 million of offering cash, or $1.00 a share. The business is also very exposed to its financing: the filing warns that weaker demand can depress rental rates and equipment sale prices, and the company owes about $3.3 billion. Up to 18.3 million further shares (7.9% of fully diluted shares) can be issued to the co-founders under performance awards, which could dilute this further. Bull case, $6.00 a share. First-half 2026 net income was a loss of $10 million versus a loss of $32 million a year earlier; adding back stock compensation, that is a $65 million improvement (a profit of $35 million versus a loss of $30 million). We assume that improvement persists, lifting earnings to about $130 million before stock pay, and that the rental network keeps earning at that level indefinitely. After $45 million of stock compensation and the $37 million preferred dividend, about $48 million a year is left, worth about $800 million, plus $706 million of offering cash, or about $1.5 billion in total, $6.00 a share. It is only in this case because it rests on a single half-year of results. What could make this wrong. If the added fleet and the 31% rental revenue growth of 2025 turn into much higher profits than the first half of 2026 shows, or if the offering cash is invested at high returns rather than absorbed by losses, these values are too low. If second-lien and revolver refinancing gets costlier, or rental rates and used-equipment prices fall, they are too high. Some of the company's equipment sales have been to entities controlled by its co-founders ($79 million in 2025, $277 million in 2024 and $80 million in 2023), so year-to-year equipment sales are lumpy and can be influenced by related parties. We could not read the company's second-quarter 2026 report text, only the reported figures, so post-IPO use of proceeds is not confirmed.