Custom Truck One Source (NYSE:CTOS) and Allison Transmission (NYSE:ALSN) Critical Comparison

Custom Truck One Source (NYSE:CTOS) and Allison Transmission (NYSE:ALSN) are both mid-cap auto/tires/trucks companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, dividends, institutional ownership, profitability, earnings, analyst recommendations and risk.

Valuation and Earnings

This table compares Custom Truck One Source and Allison Transmission”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Custom Truck One Source	$1.94 billion	1.24	-$31.05 million	($0.09)	-118.29
Allison Transmission	$3.65 billion	2.75	$623.00 million	$6.43	18.85

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

Insider and Institutional Ownership

90.1% of Custom Truck One Source shares are held by institutional investors. Comparatively, 96.9% of Allison Transmission shares are held by institutional investors. 4.7% of Custom Truck One Source shares are held by insiders. Comparatively, 1.1% of Allison Transmission shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Custom Truck One Source	-0.88%	-2.18%	-0.49%
Allison Transmission	14.88%	37.50%	10.74%

Analyst Recommendations

This is a summary of recent recommendations for Custom Truck One Source and Allison Transmission, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Custom Truck One Source	2	1	4	0	2.29
Allison Transmission	0	5	2	1	2.50

Custom Truck One Source presently has a consensus price target of $10.14, indicating a potential downside of 4.73%. Allison Transmission has a consensus price target of $127.17, indicating a potential upside of 4.93%. Given Allison Transmission’s stronger consensus rating and higher probable upside, analysts plainly believe Allison Transmission is more favorable than Custom Truck One Source.

Volatility and Risk

Custom Truck One Source has a beta of 1.37, indicating that its share price is 37% more volatile than the S&P 500. Comparatively, Allison Transmission has a beta of 0.94, indicating that its share price is 6% less volatile than the S&P 500.

Summary

Allison Transmission beats Custom Truck One Source on 12 of the 15 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 Allison Transmission

Allison Transmission Holdings, Inc., together with its subsidiaries, designs, manufactures, and sells fully automatic transmissions for medium- and heavy-duty commercial vehicles and medium- and heavy-tactical U.S. defense vehicles, and electrified propulsion systems worldwide. It provides commercial-duty on-highway, off-highway and defense fully automatic transmissions, and electric hybrid and fully electric systems. The company offers transmissions for various applications, including distribution, refuse, construction, fire, and emergency on-highway trucks; school and transit buses; motor homes; energy, mining, and construction off-highway vehicles and equipment; and wheeled and tracked defense vehicles. It provides its transmissions and electric propulsion solutions under the Allison Transmission brand name; and remanufactured transmissions under the ReTran brand name. The company also sells branded replacement parts, support equipment, aluminum die cast components, and other products necessary to service the installed base of vehicles utilizing its solutions, as well as defense kits, engineering services, and extended transmission coverage services to various original equipment manufacturers, distributors, and the U.S. government. It serves customers through an independent network of approximately 1,600 independent distributor and dealer locations. The company was formerly known as Clutch Holdings, Inc. Allison Transmission Holdings, Inc. was founded in 1915 and is headquartered in Indianapolis, Indiana.