NEW YORK (TheStreet) -- United Rentals (URI) stock is plunging by 18.84% to $45.32 on heavy trading volume on Thursday afternoon, following disappointing 2015 fourth quarter financial results, which the company reported after the market close on Wednesday.
The equipment rental company posted earnings of $2.19 per share for the latest quarter, missing estimates of $2.31 per share. Revenue dropped by 2.6% year-over-year to $1.52 billion, just short of estimates for $1.53 billion.
United Rentals' weak results can be attributed to lower revenue and margins, as well as a higher tax rate, Wells Fargo analysts wrote in a note, according to Barron's.
"We continue to believe the U.S. business capital spending cycle has peaked and remind that a broad/sustained slowdown has always started within about 18 months," analysts added, Barron's reports. "Hence, we believe it's likely that United Rentals' earnings have peaked, and we remain cautious on the equipment rental space."
So far today, 9.09 million shares of United Rentals have exchanged hands, compared with its average daily volume of 1.95 million shares.
Separately, United Rentals has a "buy" rating and letter grade of B- at TheStreet Ratings because of the company's revenue and earnings per share growth, notable return on equity, expanding profit margins, and increase in net income.
You can view the full analysis from the report here: URI
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.