Custom Truck One Source (NYSE:CTOS) & Lear (NYSE:LEA) Critical Contrast

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

Earnings and Valuation

This table compares Custom Truck One Source and Lear”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Custom Truck One Source	$1.94 billion	0.85	-$31.05 million	($0.15)	-48.43
Lear	$23.26 billion	0.26	$436.80 million	$8.15	14.62

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Custom Truck One Source	-1.60%	-3.88%	-0.88%
Lear	1.88%	13.40%	4.58%

Insider and Institutional Ownership

90.1% of Custom Truck One Source shares are held by institutional investors. Comparatively, 97.0% of Lear shares are held by institutional investors. 4.5% of Custom Truck One Source shares are held by company insiders. Comparatively, 1.0% of Lear shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Volatility & Risk

Custom Truck One Source has a beta of 1.12, indicating that its share price is 12% more volatile than the S&P 500. Comparatively, Lear has a beta of 1.24, indicating that its share price is 24% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings for Custom Truck One Source and Lear, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Custom Truck One Source	2	2	3	0	2.14
Lear	0	10	3	1	2.36

Custom Truck One Source currently has a consensus price target of $7.40, indicating a potential upside of 1.86%. Lear has a consensus price target of $136.17, indicating a potential upside of 14.25%. Given Lear’s stronger consensus rating and higher probable upside, analysts plainly believe Lear is more favorable than Custom Truck One Source.

Summary

Lear 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 Lear

Lear Corporation designs, develops, engineers, manufactures, assembles, and supplies automotive seating, and electrical distribution systems and related components for automotive original equipment manufacturers in North America, Europe, Africa, Asia, and South America. Its Seating segment offers seat systems, seat subsystems, keyseat components, seat trim covers, seat mechanisms, seat foams, and headrests, as well as surface materials, such as leather and fabric for automobiles and light trucks, compact cars, pick-up trucks, and sport utility vehicles. The company’s E-Systems segment provides electrical distribution and connection systems that route electrical signals and networks; and manage electrical power within the vehicle for various powertrains. This segment’s products comprise wire harnesses, terminals and connectors, engineered components, and junction boxes; electronic system products, including body domain control modules, smart and passive junction boxes, gateway and communication modules, integrated power modules, and high voltage switching and power control systems. It also offers software and connected services comprising Xevo Market, an in-vehicle commerce and service platform; and software and services for the cloud, vehicles, and mobile devices. In addition, this segment provides cybersecurity software; advanced vehicle positioning for automated and autonomous driving applications; and short-range communication and cellular protocols for vehicle connectivity. It offers its products and services under the XEVO, GUILFORD, EAGLE OTTAWA, ConfigurE+, INTUTM, LEAR CONNEXUSTM, EXO, JOURNEYWARE, ProTec, SMART JUNCTION BOX, STRUCSURE, AVENTINO, and TeXstyle brands. Lear Corporation was founded in 1917 and is headquartered in Southfield, Michigan.