We came across a bullish thesis on Custom Truck One Source, Inc. on Crack The Market’s Substack by Ozeco and Unemployed Value Degen. In this article, we will summarize the bulls’ thesis on CTOS. Custom Truck One Source, Inc.’s share was trading at $6.28 as of January 16th. CTOS’s trailing and forward P/E were 50.11 and 125.00 respectively according to Yahoo Finance.
Pixabay/Public Domain
Custom Truck One Source (CTOS) is a $1.3 billion market cap specialty truck dealership and rental company trading at a depressed 0.70x price-to-sales, offering one of the purest public-market exposures to the power grid and transmission-and-distribution (T&D) capex supercycle. Operating more than 40 locations across the U.S. and Canada, CTOS functions as a one-stop shop providing rental, sales, parts, service, and, most critically, deep customization of highly specialized utility equipment.
Roughly 60% of revenue is directly tied to T&D, with its 9,600+ unit rental fleet comprising bucket trucks, digger derricks, cranes, and other utility-specific vehicles that require extensive upfitting beyond standard OEM offerings. This customization capability, spanning over 250 product variations, positions CTOS as a manufacturing layer within the utility supply chain and underpins an estimated ~20% share of the niche custom utility truck market. The secular grid investment theme has already driven strong growth, with revenue rising from $1.17 billion in 2021 to nearly $2.0 billion today, implying a mid-teens CAGR despite the stock’s discounted valuation.
CTOS benefits from a diversified customer base, favorable floor plan financing dynamics that add leverage to both operating performance and falling interest rates, and management alignment evidenced by insider buying. However, elevated leverage, private equity overhang from Platinum Equity’s 70% ownership, and the absence of shareholder capital returns remain key constraints.
Management is balancing deleveraging, potential ownership transition, and rental fleet expansion, which could ultimately unlock higher free cash flow and multiple expansion. While lower-margin parts and service exposure tempers profitability versus peers, sustained organic growth and debt reduction could drive a meaningful rerating, offering compelling upside over a multi-year horizon.
Previously, we covered a bullish thesis on Custom Truck One Source (CTOS) by Unemployed Value Degen in September 2024, which highlighted infrastructure tailwinds, inventory build ahead of demand, and valuation upside from depressed price-to-sales. CTOS’s stock price has appreciated by approximately 70% since our coverage as the thesis played out. Ozeco and Unemployed Value Degen share a similar view but emphasizes on customization-driven moat and T&D capex exposure.
