Financial Review: Custom Truck One Source (NYSE:CTOS) versus Gentherm (NASDAQ:THRM)

Custom Truck One Source (NYSE:CTOS) and Gentherm (NASDAQ:THRM) are both small-cap auto/tires/trucks companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, institutional ownership, earnings, analyst recommendations, valuation, profitability and risk.

Risk & Volatility

Custom Truck One Source has a beta of 1.22, indicating that its share price is 22% more volatile than the S&P 500. Comparatively, Gentherm has a beta of 1.42, indicating that its share price is 42% more volatile than the S&P 500.

Earnings & Valuation

This table compares Custom Truck One Source and Gentherm”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Custom Truck One Source	$1.80 billion	0.72	-$28.66 million	($0.16)	-35.77
Gentherm	$1.45 billion	0.73	$64.95 million	$1.02	34.13

Gentherm has lower revenue, but higher earnings than Custom Truck One Source. Custom Truck One Source is trading at a lower price-to-earnings ratio than Gentherm, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

90.1% of Custom Truck One Source shares are held by institutional investors. Comparatively, 97.1% of Gentherm shares are held by institutional investors. 4.5% of Custom Truck One Source shares are held by insiders. Comparatively, 1.4% of Gentherm shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of recent ratings and target prices for Custom Truck One Source and Gentherm, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Custom Truck One Source	1	2	2	0	2.20
Gentherm	0	2	2	1	2.80

Custom Truck One Source currently has a consensus price target of $6.38, indicating a potential upside of 11.39%. Gentherm has a consensus price target of $46.00, indicating a potential upside of 32.15%. Given Gentherm’s stronger consensus rating and higher possible upside, analysts clearly believe Gentherm is more favorable than Custom Truck One Source.

Profitability

This table compares Custom Truck One Source and Gentherm’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Custom Truck One Source	-1.89%	-6.61%	-1.54%
Gentherm	2.18%	9.90%	4.95%

Summary

Gentherm beats Custom Truck One Source on 12 of the 14 factors compared between the two stocks.

About Custom Truck One Source

Custom Truck One Source, Inc. provides specialty equipment rental and sale services to the electric utility transmission and distribution, telecommunications, rail, forestry, waste management, and other infrastructure-related industries in the United States and Canada. The company operates through three segments: Equipment Rental Solutions (ERS), Truck and Equipment Sales (TES), and Aftermarket Parts and Services (APS). The ERS segment owns new and used specialty equipment, including truck-mounted aerial lifts, cranes, service trucks, dump trucks, trailers, digger derricks, and other machinery and equipment. The TES segment offers new equipment for sale to be used for end-markets, which can be modified to meet customers specific needs. The APS segment provides truck and equipment maintenance and repair services; and rents and sells specialized tools, including stringing blocks, insulated hot stick, and rigging equipment, as well as sale of specialized aftermarket parts. The company was formerly known as Nesco Holdings, Inc. and changed its name to Custom Truck One Source, Inc. in April 2021. Custom Truck One Source, Inc. was founded in 1988 and is headquartered in Kansas City, Missouri.

About Gentherm

Gentherm Incorporated designs, develops, manufactures, and sells thermal management and pneumatic comfort technologies in the United States and internationally. The company operates in two segments, Automotive and Medical. The Automotive segment offers climate comfort systems, which include seat heaters, blowers, and thermoelectric devices for variable temperature climate control seats and steering wheel heaters that are designed to provide thermal comfort to automobile passengers; integrated electronic components, such as electronic control units; and other climate comfort systems, including neck and shoulder conditioners and climate control system products for door panels, armrests, cupholders, and storage bins. It also provides battery performance solutions comprising cell connecting devices and battery cable technologies used for various types of automotive batteries; thermal management products for heating and cooling; and automotive electronic and software systems, including electronic control units for climate comfort systems, as well as for memory seat modules and other devices. In addition, it offers lumbar and massage comfort solutions, such as lumbar support, side bolster adjustment, multi-contour seats, and massage systems; automotive cable systems, including ready-made individual cables, and ready-to-install cable networks; and valve systems products consisting of applications that offer solutions in fuel management, and other valves for brake and engine systems. This segment serves light vehicle original equipment manufacturers and tier 1s, such as automotive seat manufacturers, and aftermarket seat distributors and installers. The Medical segment offers patient temperature management systems. The company was formerly known as Amerigon Incorporated and changed its name to Gentherm Incorporated in September 2012. Gentherm Incorporated was incorporated in 1991 and is headquartered in Northville, Michigan.