Bull case
Custom Truck One Source is well positioned because demand across its transmission-led utility end markets remains exceptionally strong, with management reporting no slowdown, improved visibility into multiple years of projects, and even datacenter developers requesting on-site technicians and parts to avoid equipment bottlenecks. Its higher-margin ERS platform is showing durable economics, with utilization at 81.6%, average OEC on rent of $1.37 billion, and management expecting adj. EBITDA margins to stay in the low-50s through 2H26, supported by rental gross margins in the mid-70s and about a 5% rental price increase that is still rolling through. The company also appears set up for improving cash flow and deleveraging as pricing tailwinds, transmission mix benefits, and a manageable 2027 emissions-related cost increase of roughly $4,500-$7,000 per chassis should flow through to customers rather than impair demand.