Custom Truck One Source (CTOS) Joins A Buy List, Is It A Bargain?

What Triggered Fresh Interest in Custom Truck One Source?

Custom Truck One Source (CTOS) has attracted fresh attention after being added to the Zacks Rank #1 Strong Buy list on September 2, 2026, following higher earnings estimates for the current year.

Over the past few months, Custom Truck One Source has seen its share price give back some ground, with a 30‑day share price return down 15.62% and a 90‑day share price return down 10.30%. However, the year‑to‑date share price return is up 54.66% and the 1‑year total shareholder return is 48.02%. This suggests longer term momentum is still intact, while recent selling and an oversold technical reading hint at shifting expectations around its earnings turnaround story.

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The share price pullback has widened the gap between Custom Truck One Source, at about $8.97, and both analyst targets and intrinsic estimates. Is fair value now closer to the recent price or the higher end of that range?

Most Popular Narrative: 22% Undervalued

The most followed narrative currently points to a fair value of $11.50 for Custom Truck One Source compared with the last close at $8.97, which places a spotlight on the company’s rental driven business model and balance sheet plans.

Continued focus on inventory optimization and leverage reduction (with a stated net leverage target of below 3x by end of FY 2026), if achieved through strong free cash flow, is likely to decrease interest expense and boost net income, creating potential for valuation rerating.

Read the complete narrative.

Want to see what sits behind that potential rerating case? The narrative leans heavily on recurring rental cash flows, rising margins, and a richer earnings multiple. Curious which specific revenue and profit assumptions have to line up to support that $11.50 fair value.

Result: Fair Value of $11.50 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, the Custom Truck One Source rerating case still faces clear risks, including high net leverage and pressure on TES and ERS margins if demand or pricing softens.

Find out about the key risks to this Custom Truck One Source narrative.

Another View on Custom Truck One Source Valuation

The first narrative points to Custom Truck One Source trading below a fair value of $11.50. On earnings based measures, the picture looks very different. CTOS trades on a P/E of 95.3x compared with 25x for the US Trade Distributors industry and a fair ratio of 40.4x. That is a wide premium. Does this reflect future growth or add valuation risk if expectations cool?

For investors weighing these contrasting signals, it can help to see how the numbers stack up in a structured valuation breakdown, not just at headline level. See what the numbers say about this price — find out in our valuation breakdown.

Next Steps

With both optimism and concern running through this Custom Truck One Source story, it makes sense to check the full picture yourself and not rely on one angle. To see how the positives stack up against the issues investors are watching, start with the 4 key rewards and 2 important warning signs.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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