Why Custom Truck One Source stock is back on investors’ radar

Custom Truck One Source (CTOS) is drawing attention after reporting a return to profitability in the second quarter of 2026, alongside raised full year guidance and continued strength in transmission and distribution demand.

Custom Truck One Source’s share price has eased slightly in the past week, yet the 90 day share price return of 7.26% and year to date share price return of 83.45% suggest momentum has been building, supported by August’s earnings beat, raised 2026 guidance, and record transmission and distribution demand.

If the Custom Truck One Source story has you watching infrastructure and power-related trends, this is a useful moment to see what else is moving through 36 power grid technology and infrastructure stocks.

After an 83.45% year-to-date move, the question for Custom Truck One Source is whether recent earnings and guidance still leave meaningful upside on the table or if most of the easy gains are already priced in.

Most Popular Narrative: 7.5% Undervalued

The most followed narrative on Custom Truck One Source pegs fair value at $11.50 per share, which sits modestly above the last close of $10.64. That gap frames how analysts are thinking about the company’s earnings power and balance sheet over the coming years.

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 sits behind that $11.50 fair value for Custom Truck One Source? The narrative focuses on recurring equipment rentals, improving margins, and an earnings profile built around higher utilization and disciplined growth assumptions.

Result: Fair Value of $11.50 (UNDERVALUED)

However, Custom Truck One Source still carries elevated leverage and faces margin pressure, so any drop in demand or backlog could quickly challenge this undervalued narrative.

Another view on Custom Truck One Source’s valuation

The popular fair value of $11.50 for Custom Truck One Source rests on long term earnings forecasts, yet the current P/E of 113x tells a different story. It sits well above both the US Trade Distributors average of 26.8x and Custom Truck One Source’s own fair ratio of 43.9x, which points to valuation risk if expectations cool.

For a closer look at what the current pricing gap might mean in practice, See what the numbers say about this price — find out in our valuation breakdown.

Next Steps

Balancing the upbeat Custom Truck One Source narrative with its open questions on risk and reward, you may want to move quickly and test the numbers yourself by weighing up the 3 key rewards and 2 important warning signs.

Looking for more investment ideas beyond Custom Truck One Source?

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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.