WillScot Mobile Mini (WSC)

Temporary space provider WillScot (NASDAQ:WSC) fell short of the markets revenue expectations in Q3 CY2025, with sales falling 5.8% year on year to $566.8 million. Next quarter’s revenue guidance of $545 million underwhelmed, coming in 6.6% below analysts’ estimates. Its non-GAAP profit of $0.30 per share was 3.9% above analysts’ consensus estimates.

Company Overview

Originally focusing on mobile offices for construction sites, WillScot (NASDAQ:WSC) provides ready-to-use temporary spaces, largely for longer-term lease.

Construction and maintenance services companies not only boast technical know-how in specialized areas but also may hold special licenses and permits. Those who work in more regulated areas can enjoy more predictable revenue streams - for example, fire escapes need to be inspected every five years. More recently, services to address energy efficiency and labor availability are also creating incremental demand. But like the broader industrials sector, construction and maintenance services companies are at the whim of economic cycles as external factors like interest rates can greatly impact the new construction that drives incremental demand for these companies’ offerings.

Competitors in the modular space and portable storage industry include Mobile Modular Management (NASDAQ:MGRC), and private companies Modular Space, AKA ModSpace, and Pac-Van.

Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Luckily, WillScot Mobile Mini’s sales grew at an exceptional 13.9% compounded annual growth rate over the last five years. Its growth beat the average industrials company and shows its offerings resonate with customers.

We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. WillScot Mobile Mini’s recent performance shows its demand has slowed significantly as its revenue was flat over the last two years.

We can better understand the company’s revenue dynamics by analyzing its most important segments, Leasing and Delivery and Installation, which are 76.6% and 17.4% of revenue. Over the last two years, WillScot Mobile Mini’s Leasing revenue (recurring) was flat while its Delivery and Installation revenue (non-recurring) averaged 5.8% year-on-year declines.

This quarter, WillScot Mobile Mini missed Wall Street’s estimates and reported a rather uninspiring 5.8% year-on-year revenue decline, generating $566.8 million of revenue. Company management is currently guiding for a 9.5% year-on-year decline in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 1.3% over the next 12 months. While this projection suggests its newer products and services will fuel better top-line performance, it is still below average for the sector.

WillScot Mobile Mini has best-in-class unit economics for an industrials company, enabling it to invest in areas such as research and development. Its margin also signals it sells differentiated products, not commodities. As you can see below, it averaged an elite 54.4% gross margin over the last five years. Said differently, roughly $54.42 was left to spend on selling, marketing, R&D, and general administrative overhead for every $100 in revenue.

WillScot Mobile Mini produced a 49.7% gross profit margin in Q3, marking a 3.8 percentage point decrease from 53.5% in the same quarter last year. WillScot Mobile Mini’s full-year margin has also been trending down over the past 12 months, decreasing by 2 percentage points. If this move continues, it could suggest a more competitive environment with some pressure to lower prices and higher input costs (such as raw materials and manufacturing expenses).

WillScot Mobile Mini has been a well-oiled machine over the last five years. It demonstrated elite profitability for an industrials business, boasting an average operating margin of 20.6%. This result isn’t surprising as its high gross margin gives it a favorable starting point.

Looking at the trend in its profitability, WillScot Mobile Mini’s operating margin rose by 5.2 percentage points over the last five years, as its sales growth gave it immense operating leverage.

This quarter, WillScot Mobile Mini generated an operating margin profit margin of 21%, up 26.8 percentage points year on year. The increase was solid, and because its revenue and gross margin actually decreased, we can assume it was more efficient because it trimmed its operating expenses like marketing, R&D, and administrative overhead.

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

WillScot Mobile Mini’s EPS grew at a spectacular 17.4% compounded annual growth rate over the last five years, higher than its 13.9% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

Diving into the nuances of WillScot Mobile Mini’s earnings can give us a better understanding of its performance. As we mentioned earlier, WillScot Mobile Mini’s operating margin expanded by 5.2 percentage points over the last five years. On top of that, its share count shrank by 19.4%. These are positive signs for shareholders because improving profitability and share buybacks turbocharge EPS growth relative to revenue growth.

Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

For WillScot Mobile Mini, its two-year annual EPS declines of 12.5% mark a reversal from its (seemingly) healthy five-year trend. We hope WillScot Mobile Mini can return to earnings growth in the future.

In Q3, WillScot Mobile Mini reported adjusted EPS of $0.30, down from $0.38 in the same quarter last year. Despite falling year on year, this print beat analysts’ estimates by 3.9%. Over the next 12 months, Wall Street expects WillScot Mobile Mini’s full-year EPS of $1.30 to grow 6.6%.

Although earnings are undoubtedly valuable for assessing company performance, we believe cash is king because you can’t use accounting profits to pay the bills.

WillScot Mobile Mini has shown terrific cash profitability, putting it in an advantageous position to invest in new products, return capital to investors, and consolidate the market during industry downturns. The company’s free cash flow margin was among the best in the industrials sector, averaging 26.4% over the last five years.

Taking a step back, we can see that WillScot Mobile Mini’s margin dropped by 4.2 percentage points during that time. It may have ticked higher more recently, but shareholders are likely hoping for its margin to at least revert to its historical level. If the longer-term trend returns, it could signal increasing investment needs and capital intensity.

WillScot Mobile Mini’s free cash flow clocked in at $122.2 million in Q3, equivalent to a 21.6% margin. This result was good as its margin was 22.2 percentage points higher than in the same quarter last year, but we wouldn’t read too much into the short term because investment needs can be seasonal, leading to temporary swings. Long-term trends carry greater meaning.

EPS and free cash flow tell us whether a company was profitable while growing its revenue. But was it capital-efficient? Enter ROIC, a metric showing how much operating profit a company generates relative to the money it has raised (debt and equity).

WillScot Mobile Mini historically did a mediocre job investing in profitable growth initiatives. Its five-year average ROIC was 6.9%, somewhat low compared to the best industrials companies that consistently pump out 20%+.

We like to invest in businesses with high returns, but the trend in a company’s ROIC is what often surprises the market and moves the stock price. Unfortunately, WillScot Mobile Mini’s ROIC has stayed the same over the last few years. If the company wants to become an investable business, it must improve its returns by generating more profitable growth.

WillScot Mobile Mini reported $14.76 million of cash and $3.91 billion of debt on its balance sheet in the most recent quarter. As investors in high-quality companies, we primarily focus on two things: 1) that a company’s debt level isn’t too high and 2) that its interest payments are not excessively burdening the business.

With $1.01 billion of EBITDA over the last 12 months, we view WillScot Mobile Mini’s 3.9× net-debt-to-EBITDA ratio as safe. We also see its $118.3 million of annual interest expenses as appropriate. The company’s profits give it plenty of breathing room, allowing it to continue investing in growth initiatives.

It was good to see WillScot Mobile Mini beat analysts’ EPS expectations this quarter. On the other hand, its Delivery and Installation revenue missed and its revenue guidance for next quarter fell short of Wall Street’s estimates. Overall, this quarter could have been better. The stock traded down 6.6% to $18.29 immediately after reporting.

Updated: December 4, 2025 at 10:05 PM EST

The latest quarterly earnings matters, sure, but we actually think longer-term fundamentals and valuation matter more. Investors should consider all these pieces before deciding whether or not to invest in WillScot Mobile Mini.

WillScot Mobile Mini isn’t a terrible business, but it isn’t one of our picks. Although its revenue growth was exceptional over the last five years, it’s expected to deteriorate over the next 12 months and its projected EPS for the next year is lacking. And while the company’s admirable gross margins indicate the mission-critical nature of its offerings, the downside is its cash profitability fell over the last five years.

WillScot Mobile Mini’s P/E ratio based on the next 12 months is 19.1x. This valuation multiple is fair, but we don’t have much faith in the company. We're pretty confident there are superior stocks to buy right now.

Wall Street analysts have a consensus one-year price target of $24.75 on the company (compared to the current share price of $21.26).

Although the price target is bullish, readers should exercise caution because analysts tend to be overly optimistic. The firms they work for, often big banks, have relationships with companies that extend into fundraising, M&A advisory, and other rewarding business lines. As a result, they typically hesitate to say bad things for fear they will lose out. We at StockStory do not suffer from such conflicts of interest, so we’ll always tell it like it is.