Custom Truck One Source (CTOS) is back in focus after reporting record Q4 2025 revenue of US$528.18 million, alongside strong rental fleet utilization and earnings that exceeded profit and adjusted EBITDA expectations.

The recent Q4 2025 update and 2026 revenue guidance came after a weak 7 day share price return of 14.87% and a 30 day share price return of 12.90%, even though the 1 year total shareholder return sits at 26.00%, so momentum has been choppy rather than moving in a single direction.

If these swings in sentiment have you looking beyond a single name, it could be a good moment to broaden your watchlist with our 23 power grid technology and infrastructure stocks as potential infrastructure beneficiaries.

With the shares down over the past month yet still ahead over the past year, and trading at a reported intrinsic discount of about 54%, the key question now is whether there is still a buying opportunity here or if markets are already pricing in future growth.

Most Popular Narrative: 22.5% Undervalued

Custom Truck One Source’s most followed narrative pins fair value at about $7.75 per share versus the last close of $6.01, which helps frame the current discount and the assumptions sitting behind it.

Sustained and growing demand from electricity grid modernization and maintenance, fueled by increasing electricity usage and multi-year utility infrastructure upgrades, is driving recurring rental revenue and supporting long-term top-line growth.

Strategic and ongoing investments expanding the rental fleet and maintaining high utilization rates (above 75%) are increasing recurring revenue and providing margin stability, supporting consistent adjusted EBITDA growth and improved free cash flow generation.

Want to see what turns those recurring grid and rental cash flows into that higher fair value? The narrative leans heavily on steady revenue expansion, improving margins, and a richer earnings multiple to justify the gap between $6.01 and $7.75, but the exact mix of those ingredients is where the story really gets interesting.

Result: Fair Value of $7.75 (UNDERVALUED)

However, this hinges on TES backlog stabilising and leverage trending toward the sub 3x target, with any demand slowdown or higher funding costs quickly challenging that setup.

Next Steps

If this setup has you leaning one way or the other, it is worth acting quickly to test the numbers yourself and pressure test the story. To see what optimism in the market is focusing on, take a closer look at the 4 key rewards.

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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.