Update: Electro Rent Q2 Earnings - Revenues Up Slightly But Margin Pressure Continues
- Revenue eked out a 1% gain Y/Y in Q2 but was down 3% for the full fiscal year. Operating margin fell to 11.9% from 16.2% and EPS was $0.19.
- As I expected, ELRC performance was mediocre. Thanks to high dividends, investors are breaking even on my advice to buy on dips if they didn’t sell the 25% November spike.
- I confirm my long ELRC thesis and the $16.7 target price within two years, offering a 10% two-year upside plus the 5% annual yield but the performance will remain mediocre.