Is U-Haul (UHAL) Overvalued Amid Deteriorating Financials and Market Volatility?

The stock market is a theater of contradictions, and U-Haul (UHAL) is currently playing a role that's as confusing as it is concerning. On one hand, the company's shares trade at a forward P/E ratio of 56.21-more than triple its five-year average of 15.82-suggesting investors are betting on a turnaround. On the other, UHAL's financials tell a story of declining profitability, with net income plunging from $924 million in 2023 to $367 million in 2025 and a jaw-dropping $82.3 million quarterly loss in Q4 2025. So, is UHAL a diamond in the rough or a classic case of valuation dislocation? Let's break it down.

The Financial Deterioration: A Closer Look

UHAL's revenue growth has been modest, hitting $5.83 billion for fiscal 2025, up slightly from prior years. But profitability? That's a different story. EBITDA for the full year rose to $1.619 billion, a $52 million increase, yet net income collapsed by 41% year-over-year to $367 million according to financial reports. The culprit? A perfect storm of rising fleet depreciation, shrinking gains on equipment sales, and declining interest income as reported in investor filings.

The Q3 2025 results were equally troubling. While revenue grew 3.7% to $1.72 billion, GAAP earnings per share fell 24.6% below estimates, dragged down by higher depreciation costs and losses on equipment sales. Operating margins contracted from 18.4% to 12.7% year-over-year according to Q3 earnings data, a red flag for any investor.

Valuation Dislocation: A Tale of Two Metrics

Here's where the rubber meets the road. UHAL's valuation metrics are all over the map. The forward P/E of 56.21 is astronomically high compared to its five-year average and the industry's 30.8x benchmark according to valuation analysis. Meanwhile, the EV/EBITDA of 8.58 sits in the "Fairly Valued" range as reported by financial data platforms, and the P/B ratio of 1.30 is below its historical averages according to market research. This inconsistency screams of a market trying to reconcile UHAL's struggling fundamentals with its expansion ambitions.

Management is betting on self-storage and dealer network growth to offset operational drag. Self-storage revenue rose 8.4% in Q4 2025 as reported in investor updates, and the company added 82 new storage locations in fiscal 2025 according to financial disclosures. But can these efforts justify a P/E that's 63% higher than its peers' average of 34x according to industry benchmarks? Unlikely, especially when UHAL's cash flow is being gobbled up by capital expenditures and debt repayments. Net cash from investing activities hit -$2.421 billion in 2023 and -$2.046 billion in 2024 according to financial statements, draining liquidity even as the company tries to grow.

Risk-Reward Imbalance: A Dangerous Proposition
The risk-reward equation here is deeply skewed. UHAL's liquidity- a $1.348 billion cash reserve as of December 2024-offers some comfort, but it's not enough to offset the earnings decline. With a quarterly loss of $82.3 million in Q4 2025 according to financial reports and a full-year net income drop of 41%, the company is burning through value faster than it can create it.

Investors are essentially paying a premium for a business that's struggling to maintain its core margins. The self-storage segment's 8.4% growth in Q4 according to investor updates is promising, but it's a small part of the business. Meanwhile, the equipment rental segment's 4.1% quarterly revenue increase according to market data is barely keeping up with inflation.

The Bottom Line: A Cautionary Call

UHAL's valuation is a classic case of "buying hope." The stock's lofty P/E ratio suggests investors believe management can turn the ship around, but the financials tell a different story. With deteriorating margins, a recent quarterly loss, and a debt-laden balance sheet, the risk-reward imbalance is too stark to ignore.

For now, this is a stock to watch from the sidelines. If UHAL can stabilize its earnings and prove that its expansion bets will pay off, the valuation might justify itself. But until then, the math doesn't add up. As always, your money's better off where it's not chasing a story-it's backing a business that can deliver.