Ashtead Technology: Trading Update

Stock rallies on favourable performance

I last covered Ashtead Technology in Sept 2025, arguing that the market was mispricing the company despite its increasingly resilient offshore services model.

Find the report here.

The stock then did what markets often do best which was to ignore the thesis and sold off anyway.

Today’s FY25 trading update, however, forced a rethink for the market.

FY25 Trading Update: The Bits That Matter

Ashtead’s update was short, clean, and to the point. And the numbers did most of the talking:

1. FY25 revenue guided at £203m (+21% YoY).

2. Margins move to the top end of management expectations.

3. Net debt is expected to drop to 1.0x, down from 1.9x in FY24, giving management room to fund £35m of capex in 2026 without balance sheet stress.

The stock responded accordingly: +13% on the day (as I’m seeing now on ibkr), a clear signal that expectations had drifted too low.

Despite the stock’s uptick to £3.80, Ashtead continues to trade at 8.6 P/E based on sell-side estimates of £0.44 eps for FY25.

What’s Changed Since My Sept 2025 Report

When I last wrote, the stock traded between £3.40–£4.00. It later slid to a low of £3.00 (or thereabouts). This was mostly driven by news of falling oil prices and supply glut fears.

Of course, geopolitical tensions (Russia, Venezuela, Iran and now Greenland) helped oil prices bounce, but that wasn’t the real catalyst here.

This rally was about earnings confidence returning.

Ashtead continues to be treated as an oil beta, but that framing is increasingly wrong. As covered in my previous report, around 85% of its equipment supports both O&G and renewables, allowing utilization to hold even as project mix shifts.

Most importantly: none of the core investment theses from my original report have been disproven.

What we’re waiting for now is detail - utilization, backlog, full financials, the usual deets, which will come with the FY25 earnings presentation in 2 months’ time.

Also found some interesting updates from Mr James Emmanuel, a lawyer turned investor with a subscriber base over 250x larger than mine (substack goals! and much appreciated for letting me reference the note).

A few of his compelling observations included the following:

Major offshore operators are under pressure to return cash to shareholders, so they are increasingly outsourcing specialized subsea technical needs. Ashtead’s "rental and services" model thrives in this environment because it converts what would be high CAPEX for an operator into manageable OPEX.

…

The binding merger agreement between Saipem and Subsea 7 to create "Saipem7" (expected to close later in 2026) is a seismic event for the industry. While it creates a titan with a €43 billion backlog, it is arguably very good news for Ashtead Technology. Saipem7 will control over 25% of the UK North Sea SURF (Subsea Umbilicals, Risers, and Flowlines) market. For a supplier like Ashtead, this creates a massive, singular "anchor customer" with predictable, long-term equipment needs.

I’ve quoted him directly there (he’s a former lawyer, so I’m not taking any risks of misrepresenting him), but check out his detailed note here.

Quick Self-Reflection

Perhaps, one thing I got wrong was the LSE listing as a catalyst. I had hoped that greater visibility would help offset the short interest in the stock, but instead, the shorts pressed even harder. That said, I believe the reason for the short interest has changed over time, or at least, the weightage has shifted.

Initially, the short pressure was most likely technical - A significant portion of Ashtead’s shareholder base held the stock for the inheritance tax benefits associated with its AIM listing. Once the company uplisted to the LSE, these funds were effectively forced sellers. Momentum traders quickly picked up on this forced offloading and piled in, extending the selloff beyond what fundamentals alone would justify.

Today, the short thesis appears to be more macro-driven. I believe the stock is now being shorted primarily on the view that financial performance is tightly linked to oil supply gluts and declining oil prices.

The upcoming March earnings call will be important in clarifying this narrative, particularly around utilization, backlog, and earnings durability. Until then, volatility should be expected, this is still a $400m market cap comp in a “cyclical” industry, after all.

Closing Thoughts

Today’s update didn’t change the story, it just reminded the market what it had forgotten: Ashtead’s business is more resilient than its share price suggests, and sometimes, all it takes is one clean set of numbers to reset expectations.

Until the March earnings call brings more clarity, volatility is part of the deal and that’s the price of owning a small, misunderstood company in a cyclical sector. I’m already invested, so the plan is straightforward: stay patient, stay disciplined, and let time (and data) do its thing.