Stifel reiterates Buy rating on Custom Truck One Source stock

Investing.com - Stifel has reiterated its Buy rating and $8.00 price target on Custom Truck One Source (NYSE:CTOS) stock, citing multiple avenues for potential outperformance. The current stock price of $5.59 represents a potential 43% upside to Stifel’s target, according to InvestingPro data.

The investment firm expressed an incrementally positive view on CTOS following recent meetings with the company’s CEO and CFO, according to Stifel analyst Brian Brophy.

Stifel identified three key factors supporting its bullish outlook: ongoing recovery in the Transmission & Distribution (T&D) segment, which accounts for approximately 55% of company revenue; the aging of the young fleet, which is expected to drive outsized free cash flow and debt reduction; and potential normalization of valuation multiples.

The firm noted that Custom Truck One Source currently trades at approximately 7.3 times next-twelve-months EV/EBITDA, compared to about 8.7 times for a broad basket of peers, suggesting potential for multiple expansion. However, InvestingPro data indicates the company’s trailing EV/EBITDA ratio is considerably higher at 20.6x, with EBITDA of $181.7 million for the last twelve months.

Stifel believes Custom Truck One Source is well positioned to benefit from the ongoing upswing in T&D investment to support load growth.

In other recent news, Custom Truck One Source reported mixed results for its third-quarter earnings in 2025. The company announced revenue of $482 million, which fell short of the consensus estimate of $490 million. This shortfall was primarily due to underperformance in the Truck and Equipment Sales segment, which generated $275 million compared to the expected $282 million. Additionally, the company posted an earnings per share (EPS) of -$0.03, missing the forecasted -$0.02, resulting in a 50% negative surprise. Stifel maintained its Buy rating for Custom Truck One Source, with a price target of $8.00, despite these mixed results. The rating reflects confidence in the company’s future potential, as noted by the firm. These developments are part of the company’s recent financial updates.

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