Ryder’s third quarter results drew a significant negative market reaction, as the company’s flat revenue and cautious commentary highlighted ongoing freight market softness. Management pointed to persistent weak demand in both rental and used vehicle sales, which offset gains from contractual business and operational improvements. CEO Robert Sanchez noted, “Rental demand increased sequentially, but the increase was below historical seasonal demand trends.” The quarter’s performance also reflected ongoing challenges in the e-commerce segment of the supply chain business and selective cost increases, such as higher medical expenses. Management’s tone was notably cautious, particularly regarding the duration of freight market headwinds and the muted transactional activity in vehicle sales.
Is now the time to buy R? Find out in our full research report (it’s free for active Edge members).
Ryder (R) Q3 CY2025 Highlights:
- Revenue: $3.17 billion vs analyst estimates of $3.19 billion (flat year on year, 0.7% miss)
- Adjusted EPS: $3.57 vs analyst estimates of $3.54 (0.7% beat)
- Adjusted EBITDA: $738.8 million vs analyst estimates of $728.8 million (23.3% margin, 1.4% beat)
- Management lowered its full-year Adjusted EPS guidance to $12.95 at the midpoint, a 1% decrease
- Operating Margin: 8.7%, in line with the same quarter last year
- Market Capitalization: $6.90 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Ryder’s Q3 Earnings Call
- Scott Group (Wolfe Research) asked about the impact of new CDL driver regulations on Ryder’s business mix and used truck pricing. CEO Robert Sanchez responded that a tighter driver market could benefit dedicated outsourcing, but the ultimate impact is uncertain and may pressure wages over time.
- Ben Moore (Citi) inquired about the effect of truck tariffs and higher new truck prices on used truck valuations and leasing demand. Sanchez explained that higher new truck prices could be passed through to customers, potentially lifting used truck values and increasing outsourcing demand.
- David Zazula (Barclays) questioned the durability of supply chain segment headwinds, specifically around e-commerce network performance. President Steve Sensing noted that much of the underperformance was due to lower volumes at certain accounts and higher network optimization costs, but expects improvement as new business ramps up.
- Ravi Shanker (Morgan Stanley) probed the timing of regulatory impacts on the driver market and the structural trends in private fleet growth. Sanchez explained that any tightening would likely play out over several years and could favor Ryder’s dedicated and leasing services as private fleets adjust.
- Brian Ossenbeck (JPMorgan) asked for more detail on rental demand softness and e-commerce performance. Division leaders clarified that rental demand was weaker than seasonal norms, especially among lease customers, and that e-commerce productivity misses were largely isolated to specific accounts.
Catalysts in Upcoming Quarters
In coming quarters, the StockStory team will be monitoring (1) the pace at which new supply chain and dedicated contracts begin contributing to top-line growth, (2) signs of recovery in rental utilization and used vehicle pricing as freight market conditions evolve, and (3) the effectiveness of Ryder’s network optimization and digital technology investments. Execution on these fronts will be crucial for validating management’s strategy as the company navigates extended freight and macroeconomic uncertainty.
Ryder currently trades at $170.80, down from $182.75 just before the earnings. At this price, is it a buy or sell? See for yourself in our full research report (it’s free for active Edge members).
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