2024-04-29 18:15:08 ET
Summary
- U-Haul is the largest "Do-It-Yourself" moving and storage operator in North America with 1,904 self-storage locations and 949,000 rental storage units.
- U-Haul's revenue growth has turned negative due to a decline in temporary or permanent moves induced by the pandemic.
- The company's high CapEx spending and debt levels are unsustainable, in our opinion, and its earnings are expected to decline in the coming quarters.
- A trend has formed that US workers are less willing to relocate. The geographic reshuffle after the pandemic is coming to an end.
Investment Thesis
U-Haul's (UHAL) substantial rise due to the pandemic has stalled and reversed, but the company has continued the extraordinary spending in CapEx, resulting in a historical low of its free cash flow. With a weaker demand picture emerging and less room for other strategic spending, the company could face headwinds in the near to medium term.
Company Overview
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For further details see:
U-Haul: Free Cash Flow Decline Approaching Its Limit