WillScot’s Q1 Slump Sparks Caution, But This Pivot Could Keep Investors Rolling

The numbers are in, and they’re not pretty: WillScot’s (WSC) first-quarter 2025 revenue and earnings both took a hit. But here’s the thing—this isn’t a full-blown crisis. It’s a speed bump in a company that’s built for the long haul. Let me break it down.

First, the bad news: Revenue dipped to $560 million from $587 million a year ago, and adjusted EPS plummeted to $0.24 from $0.35. EBITDA also fell, down to $229 million from $248 million, while free cash flow held steady at $145 million. Yikes. But here’s where the story gets interesting: willscot isn’t panicking. It’s keeping its full-year revenue and EBITDA guidance unchanged, and that’s a bold move.

Let’s dig deeper. The company’s pending order book—the deals lined up for future activation—is up 7% year-over-year. That’s a big deal because it means Q2 could be a rebound quarter. Think of it like a retailer’s holiday inventory: if the warehouse is full, you know sales are coming. Management is betting on this pipeline to offset the Q1 slump, and I’m inclined to trust them.

Now, let’s talk about the elephant in the room: the stock. WSC has been hammered lately, down roughly 20% over the past year as investors worry about a slowdown in construction and events—the bread and butter of WillScot’s portable storage and workspace rentals. But here’s the kicker: the company just refinanced $527 million in debt, pushing its next maturity out to 2027. That’s a balance sheet win, giving management breathing room to weather any macro headwinds.

What’s more, WillScot is returning cash to shareholders. It spent $32 million on buybacks and paid out $13 million in dividends in Q1 alone. With a net debt-to-EBITDA ratio of 3.5x—well within investment-grade territory—the company isn’t over-leveraged, even with $3.6 billion in total debt. That’s a critical point: unlike some peers, WillScot isn’t drowning in red ink.

But wait—should you buy the dip? Let’s look at the long game. The company’s three-to-five-year targets are ambitious: $3 billion in revenue, $1.5 billion in EBITDA, and $700 million in free cash flow. If it hits those, WSC could be a cash cow. And with a 40.9% EBITDA margin in Q1—still robust—there’s no sign of a structural decline in profitability.

The risks? Sure. A recession or a prolonged slowdown in construction could crimp demand. But WillScot’s diversified customer base—spanning energy, telecom, and government projects—gives it a buffer. Plus, its recurring revenue model (leases often last months or years) insulates it from short-term swings.

So, here’s my call: Hold the stock, but don’t chase it. If WSC dips below $15—a key support level—it might be a buying opportunity. But don’t ignore the facts: the company’s $2.275 billion to $2.475 billion full-year revenue guidance is still achievable, and the order book is a leading indicator that demand is stabilizing.

In short, WillScot’s Q1 stumble isn’t a death sentence. It’s a test of whether investors can look past a single quarter and see the $3 billion revenue vision on the horizon. This isn’t a sprint—it’s a marathon. And right now, WSC is still in the race.

Final Take: Hold WSC for now, but keep a close eye on Q2 order activations and macroeconomic data. If the company meets its full-year targets, this could be a steal at current prices. The pivot to long-term debt management and shareholder returns? That’s the kind of discipline that turns temporary dips into buying opportunities. Stay vigilant, but don’t panic.