What Happened?
Shares of heavy equipment distributor Custom Truck One Source (NYSE: CTOS) fell 14.7% in the morning session after the company reported third-quarter financial results that missed analyst expectations for revenue and earnings per share.
Although total revenue grew 7.8% year-over-year to $482.1 million, it fell short of the consensus estimate of about $490 million. The company's loss of $0.03 per share was also wider than the anticipated $0.02 loss. However, this result marked an improvement from the $0.07 loss per share reported in the same quarter of the previous year. Despite the misses for the quarter, Custom Truck One Source reaffirmed its full-year revenue guidance. The market's reaction focused on the short-term performance, leading to the sharp decline in the stock price.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Custom Truck One Source? Access our full analysis report here.
What Is The Market Telling Us
Custom Truck One Source’s shares are extremely volatile and have had 34 moves greater than 5% over the last year. But moves this big are rare even for Custom Truck One Source and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 14 days ago when the stock gained 2.6% on the news that JP Morgan raised its price target on the company's stock to $6.00 from $5.50. The adjustment reflected a 9.09% increase in the price target for the company. Despite this change, the bank's analyst, Tami Zakaria, maintained an 'Underweight' rating on the shares. This suggested that while the firm saw a slightly higher valuation for the company, it still held a cautious long-term view on the stock's performance.
Custom Truck One Source is up 21.2% since the beginning of the year, but at $5.87 per share, it is still trading 13% below its 52-week high of $6.74 from October 2025. Investors who bought $1,000 worth of Custom Truck One Source’s shares 5 years ago would now be looking at an investment worth $1,383.
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