Is McGrath RentCorp overvalued or undervalued?

As of 19 May 2025, McGrath RentCorp's valuation grade has moved from expensive to fair, indicating a shift in its perceived value. The company is currently fairly valued, with a P/E ratio of 20, a Price to Book Value of 2.47, and an EV to EBITDA of 9.78. In comparison to its peers, Air Lease Corp. has a P/E of 14.59 and an EV to EBITDA of 10.86, while Ryder System, Inc. stands out with a very attractive P/E of 11.77 and an EV to EBITDA of 4.89.
Despite the recent adjustments in valuation, McGrath RentCorp's stock has underperformed relative to the S&P 500 over the past year, returning 4.27% compared to the index's 10.26%. This performance, combined with its current ratios, suggests that while the company is fairly valued, there may be potential for growth if it can align more closely with its peers' performance metrics.