3 Reasons to Avoid TWI and 1 Stock to Buy Instead

April 22, 2025 at 05:03 AM EDT

TWI Cover Image

Titan International trades at $6.51 per share and has stayed right on track with the overall market, losing 10.5% over the last six months while the S&P 500 is down 11%. This might have investors contemplating their next move.

Is now the time to buy Titan International, or should you be careful about including it in your portfolio? Get the full stock story straight from our expert analysts, it’s free.

Despite the more favorable entry price, we're cautious about Titan International. Here are three reasons why there are better opportunities than TWI and a stock we'd rather own.

Why Do We Think Titan International Will Underperform?

Acquiring Goodyear’s farm tire business in 2005, Titan (NSYE:TWI) is a manufacturer and supplier of wheels, tires, and undercarriages used in off-highway vehicles such as construction vehicles.

1. Long-Term Revenue Growth Disappoints

Examining a company’s long-term performance can provide clues about its quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Regrettably, Titan International’s sales grew at a tepid 5% compounded annual growth rate over the last five years. This fell short of our benchmark for the industrials sector. Titan International Quarterly Revenue

2. Low Gross Margin Reveals Weak Structural Profitability

At StockStory, we prefer high gross margin businesses because they indicate the company has pricing power or differentiated products, giving it a chance to generate higher operating profits.

Titan International has bad unit economics for an industrials business, signaling it operates in a competitive market. As you can see below, it averaged a 14% gross margin over the last five years. Said differently, Titan International had to pay a chunky $86.00 to its suppliers for every $100 in revenue. Titan International Trailing 12-Month Gross Margin

3. EPS Took a Dip Over the Last Two Years

While long-term earnings trends give us the big picture, we also track EPS over a shorter period because it can provide insight into an emerging theme or development for the business.

Sadly for Titan International, its EPS declined by more than its revenue over the last two years, dropping 63.8%. This tells us the company struggled to adjust to shrinking demand.

Titan International Trailing 12-Month EPS (Non-GAAP)

Final Judgment

We cheer for all companies making their customers lives easier, but in the case of Titan International, we’ll be cheering from the sidelines. After the recent drawdown, the stock trades at 43.4× forward price-to-earnings (or $6.51 per share). This multiple tells us a lot of good news is priced in - we think there are better opportunities elsewhere. We’d recommend looking at a top digital advertising platform riding the creator economy.

Stocks We Like More Than Titan International

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