The case for & against
Bull & Bear analysis
U-Haul Holding Company (NYSE: UHAL) is a leading provider of rental equipment and storage solutions in the United States and Canada. The company holds a dominant market position in the moving and self-storage industry, offering a comprehensive range of services, including truck and trailer rentals, self-storage units, and portable storage solutions. U-Haul operates its own fleet and has a significant presence in the economy-sharing sector. With a focus on affordability and convenience, the company caters mostly to residential customers and small businesses, benefiting from steady and predictable demand during relocation seasons and educational transitions.
Bull says
- ↑Announced $350M buyback accelerates EPS growth and underpins share price
- ↑Shares up ~31% YTD, showing defensive strength amid market volatility
- ↑Pays $0.05 quarterly dividend for 15th consecutive issuance
- ↑Depreciation expenses expected to decline in FY2027, easing cost pressures
- ↑High earnings yield and book-to-price ratio indicate potential undervaluation
- ↑Positive earnings revisions suggest growing analyst confidence
Bear says
- ↓Negative growth metrics imply challenges in driving revenue expansion
- ↓Poor profitability metrics highlight operational inefficiencies and margin pressures
- ↓Volatile trading increases investment risk amid significant price swings
- ↓Very low liquidity may impede trading and deter new capital inflows
- ↓High short interest reflects bearish market sentiment toward U-Haul
- ↓P/E of 277 suggests a stretched valuation vulnerable to correction
Investment themes with UHAL
Companies with weak ability to set prices
Earnings Call · Q2 2023 · Mgmt. Guidance
Transcript signals
Bull points
- Performance of self-storage remains strong. Storage revenues were up $32 million, which is about a 21% increase. Looking at our occupied unit count at the end of September, we had an increase of 61,000 occupied rooms compared to September of last year. In addition to the increased occupancy, we experienced nearly 10% growth in average revenue per foot. Our occupancy ratio across the entire portfolio of storage locations increased 1% to 85% year over year. Within that group of properties, About 84% of our storage locations are operating at or above 80% occupancy as of September 30th. And of those properties, their average occupancy is at 95%.
- For the first six months of this year, we've invested $584 million in real estate acquisitions, along with self-storage and Huebox warehouse development. That's up from $444 million last year. Over the last 12 months, we've added 70,000 new storage units, which translates to about 5.4 million net rentable square feet. We currently have about 5.8 million new square feet being developed across 131 projects. And then we have an additional 146 or so projects where we own the land or buildings, but we haven't started the construction yet. I would expect these projects to result in approximately 8.7 million new net rentable square feet.
- we continue to have a strong cash and liquidity balance. At September 30th of this year, we had, at the moving and storage segment, $3,175,000,000 of cash and available credit.
Bear points
- Yesterday, we reported second quarter earnings of $17.95 a share compared to $20.90 a share for the same period in fiscal 2020.
- we saw a decrease of 1%, or approximately $17 million.
- In the moving and storage segment, we saw expense growth outpace revenue growth, leading to a decrease in our operating margin. This resulted in operating earnings in our moving and storage segment decreasing $41 million to $515 million for the quarter. Operating expenses increased $114 million. We highlighted in the press release the $34 million increase in fleet repair and maintenance.