-$7.47
$24.02
bear -$7.47
base $10.76
bull $24.02
margin of safety $4.25
market price* $57.02
Business condition attached to the margin of safety
Net spending on the rental fleet (new trucks and trailers bought, less cash from selling used ones) running at or below roughly $1.0 billion a year for at least two consecutive quarters, while operating cash flow before working-capital swings holds near $1.5 billion a year.
U-Haul Holding Company rents moving trucks and trailers to do-it-yourself movers, runs a large self-storage portfolio, and owns small property and casualty and life insurance subsidiaries. In the year ended March 31, 2026 revenue was $6.04 billion, about $3.8 billion of it from self-moving rentals and about $970 million from self-storage. Net earnings fell to $83 million from $367 million a year earlier and $629 million two years earlier. The value of the shares turns on two things: what it costs each year simply to keep the rental fleet in service, and how much debt the company has taken on to build storage. HOW WE MEASURED EARNINGS. We start with operating cash flow and remove timing swings in working capital. We then deduct the cost of staying in business: replacing trucks (purchases of new rental equipment less cash from selling used ones, which is how the company itself measures its net fleet spending), an allowance for upkeep of buildings and other equipment (about 1.8% of revenue, based on reported other capital spending), and interest credited to life-insurance policyholders ($96.5 million in fiscal 2026), which reported operating cash flow adds back but is a real cost of holding that money. New storage construction and property purchases ($966 million in fiscal 2026 and $1.5 billion in fiscal 2025) are treated as discretionary growth spending: we leave them out of the running cost and, in return, give no credit for storage beyond what is already built. The company reports no stock-based compensation. On this basis cash left for shareholders was $0.05 per share in fiscal 2026, $0.77 in fiscal 2025 and $2.28 in fiscal 2024, against $7.12 in fiscal 2022. The share count has been steady at about 196 million. Because we value the business first and then subtract its debt, we add back cash interest paid ($361 million in fiscal 2026, $302 million in fiscal 2025, $166 million in fiscal 2022). That gives cash before lenders of $1.89 per share in fiscal 2026, $2.31 in fiscal 2025 and $3.65 in fiscal 2024. The decline is almost entirely truck spending: net fleet investment rose from about $0.89 billion in fiscal 2024 to $1.21 billion in fiscal 2025 and $1.38 billion in fiscal 2026, while operating cash flow before working capital stayed near $1.5 billion a year. Depreciation of the fleet rose $187 million in fiscal 2026 and losses on selling used trucks rose $118 million, as resale values fell and more retired trucks were sold. Total depreciation net of disposals was $1.29 billion, against $0.66 billion in fiscal 2024. NORMAL LEVEL. We take the median of cash before lenders over fiscal 2017 to 2026, leaving out fiscal 2021 and 2022, which were inflated by the pandemic moving surge, unusually low truck purchases and strong used-truck prices, conditions that have since reversed. The result is $3.43 per share, about $673 million a year. It implies net truck spending of roughly $1.04 billion a year, between the $0.89 billion of fiscal 2024 and the $1.38 billion of fiscal 2026. GROWTH PATH. Cash before lenders fell 18% in fiscal 2026 ($2.31 to $1.89). The base case assumes $2.65 in year one, higher than that trailing trend, for a dated reason in the fiscal 2026 annual report: the company expects to reinvest about $815 million net in its fleet in fiscal 2027, against $1,381 million in fiscal 2026, and says real-estate spending will likely fall again. We credit only about a quarter of that saving, because the company's plans have proved too low before: it planned $1,050 million for fiscal 2025 and spent $1,211 million, and planned $1,295 million for fiscal 2026 and spent $1,381 million. The first quarter of fiscal 2027 (to June 30, 2026) supports a modest improvement only: net purchases of equipment and property were $674 million against $750 million a year earlier, and operating cash flow was $630 million against $598 million. The base path is $2.65, $3.05, then $3.43 a year. No growth is credited beyond returning to a level the business has already reached under current truck prices (fiscal 2024 reached $3.65). Left out: further storage development, the U-Box program, price increases, share gains and the $350 million buyback authorization, none of which is contracted or already paid for. DEBT. Borrowings were $8.15 billion at June 30, 2026 ($8.12 billion at March 31, up from $7.23 billion a year earlier). Consolidated cash was about $1.10 billion; excluding the insurance subsidiaries' cash and keeping about $0.2 billion to run the business, we count about $0.79 billion as excess. About $3.2 billion is senior mortgages and real-estate term loans at average rates near 4.7% maturing between 2027 and 2042, $1.7 billion is private-placement notes averaging 3.6% maturing 2029 to 2035, and fleet loans and finance liabilities run near 5% to 5.4%. Because much of this costs well under 6% for years, we reduce the debt figure by about $0.42 billion (an approximate estimate), giving net debt of about $6.94 billion, or $35.38 per share. The company forecasts $904 million of debt payments in fiscal 2027, had $465 million of unused credit-line capacity in moving and storage at March 31, 2026, and reported compliance with all financial covenants. It has historically refinanced and grown its borrowings, but interest paid has more than doubled since fiscal 2022 and first-quarter fiscal 2027 interest paid was $82.8 million against $70.1 million a year earlier. THE THREE CASES. Each runs 30 years: the truck-rental network and the storage portfolio have a multi-decade operating record, and nothing we can name carries earnings beyond that. Bear: cash before lenders settles at $2.10 per share (about $412 million), the average of fiscal 2025 and 2026, because truck replacement stays at today's elevated cost. The filing says new-truck costs have risen significantly; used-truck sales swung from a $154 million gain in fiscal 2024 to a $104 million loss in fiscal 2026; and storage occupancy fell to 71% from 77% as new capacity opened. On top of that, the bear case includes a two-year downturn in years three and four, sized from the fleet's own recent record: the collapse in used-truck resale values between fiscal 2024 and 2026 cost about $258 million a year, and we assume a repeat of roughly half that, about $120 million a year, together with weaker moving volume such as the 2008 to 2010 housing slump produced. In those two years cash before lenders of about $290 million would fall short of an interest bill near $390 million, so the company would need to keep borrowing or cut fleet spending. The business is worth about $27.91 per share ($5.5 billion) against $35.38 of debt, so the company appears to owe more than the business is worth, by about $7.47 per share (about $1.5 billion). Base: the path above. The business is worth about $46.14 per share ($9.0 billion), it owes $35.38, leaving $10.76 per share (about $2.1 billion). Bull: $3.30 in year one, then $4.39 a year. Net truck spending settles near $0.9 billion, a level reached in fiscal 2024 and close to the company's stated fiscal 2027 plan, and storage rooms already built fill back toward last year's 77% occupancy, worth roughly $0.25 per share. The business is worth about $59.40 per share ($11.6 billion), less $35.38 of debt, leaving $24.02 per share (about $4.7 billion). WHAT CHANGED. Since our late-September estimate no new results have been filed. The base and bull values are essentially unchanged; small differences reflect the June 30 balance sheet. The bear case is lower ($-7.47 against $-6.57) because it now includes a two-year downturn of the kind the fleet's resale market has just demonstrated, rather than only extending today's conditions. TESTING THE CASE. The weakest point is the normal level, which depends on truck spending falling from $1.38 billion. We tested the company's own forecasts against what it actually spent: in each of the last two years it spent more than planned, by $161 million and $86 million. That is why we credit only a quarter of the planned fiscal 2027 cut. If truck spending stayed at the fiscal 2026 level, the base case would be worth roughly what the bear case is. Working-capital detail for fiscal 2017 to 2023 is taken from each year's own filing, whose line items are presented somewhat differently from later filings; the effect is small relative to operating cash flow. MARGIN OF SAFETY PRICE. How sure are we of the earnings level? Not very: cash left after keeping the fleet running has ranged from $1.89 to $4.44 per share in ordinary years, and swings with new-truck costs and used-truck prices, neither of which the company controls. The worst plausible outcome is a long stretch of high truck costs combined with weak moving and storage demand, while $8.1 billion of debt has to be serviced and about $0.9 billion repaid or refinanced each year. The business has hard assets behind much of that debt (trucks and owned real estate) and a long record of refinancing, and control by the founding Shoen family has favoured reinvestment over payouts, so shareholders are unlikely to be wiped out quickly, but their share of the value could disappear in a bad decade, as the bear case shows. If we are wrong about truck spending falling back toward $1.0 billion, the shares are worth roughly nothing; if we are wrong about storage occupancy recovering, the base loses only modestly. The shares pay a small dividend on the non-voting class and little on the voting class, so very little is paid during the holding period. Given that, the margin-of-safety price is set at a level where a good return is still implied if the business only manages fiscal 2025 conditions for several years and then recovers part of the way: about $4.25 per share, and only once there is evidence, in the company's reported cash flow, that net truck spending has actually come down.