The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Federal Signal (NYSE: FSS) and the rest of the heavy transportation equipment stocks fared in Q1.
Heavy transportation equipment companies are investing in automated vehicles that increase efficiencies and connected machinery that collects actionable data. Some are also developing electric vehicles and mobility solutions to address customers’ concerns about carbon emissions, creating new sales opportunities. Additionally, they are increasingly offering automated equipment that increases efficiencies and connected machinery that collects actionable data. On the other hand, heavy transportation equipment companies are at the whim of economic cycles. Interest rates, for example, can greatly impact the construction and transport volumes that drive demand for these companies’ offerings.
The 14 heavy transportation equipment stocks we track reported a strong Q1. As a group, revenues were in line with analysts’ consensus estimates.
Luckily, heavy transportation equipment stocks have performed well with share prices up 26.4% on average since the latest earnings results.
Federal Signal (NYSE: FSS)
Developing sirens that warned of air raid attacks or fallout during the Cold War, Federal Signal (NYSE: FSS) provides safety and emergency equipment for government agencies, municipalities, and industrial companies.
Federal Signal reported revenues of $463.8 million, up 9.2% year on year. This print exceeded analysts’ expectations by 1%. Overall, it was a strong quarter for the company with an impressive beat of analysts’ backlog estimates and a solid beat of analysts’ EBITDA estimates.
"With our teams' continued focus on operational execution and serving our customers, our businesses were able to deliver 9% year-over-year net sales growth, double-digit operating income improvement, gross margin expansion, and a 170-basis point increase in adjusted EBITDA margin during the first quarter," commented Jennifer L. Sherman, President and Chief Executive Officer.
Interestingly, the stock is up 40.8% since reporting and currently trades at $106.47.
Best Q1: Douglas Dynamics (NYSE: PLOW)
Once manufacturing snowplows designed for the iconic jeep vehicle precursor, Douglas Dynamics (NYSE: PLOW) offers snow and ice equipment for the roads and sidewalks.
Douglas Dynamics reported revenues of $115.1 million, up 20.3% year on year, outperforming analysts’ expectations by 6.7%. The business had an incredible quarter with a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.
Douglas Dynamics achieved the fastest revenue growth among its peers. The market seems happy with the results as the stock is up 18.6% since reporting. It currently trades at $28.96.
Is now the time to buy Douglas Dynamics? Access our full analysis of the earnings results here, it’s free.
Weakest Q1: Wabash (NYSE: WNC)
With its first trailer reportedly built on two sawhorses, Wabash (NYSE: WNC) offers semi trailers, liquid transportation containers, truck bodies, and equipment for moving goods.
Wabash reported revenues of $380.9 million, down 26.1% year on year, falling short of analysts’ expectations by 7.1%. It was a disappointing quarter as it posted full-year revenue guidance missing analysts’ expectations.
Wabash delivered the weakest performance against analyst estimates and weakest full-year guidance update in the group. As expected, the stock is down 1% since the results and currently trades at $9.86.
Read our full analysis of Wabash’s results here.
Cummins (NYSE: CMI)
With more than half of the heavy-duty truck market using its engines at one point, Cummins (NYSE: CMI) offers engines and power systems.
Cummins reported revenues of $8.17 billion, down 2.7% year on year. This result beat analysts’ expectations by 0.6%. It was an exceptional quarter as it also put up a solid beat of analysts’ EBITDA estimates.
The stock is up 15.2% since reporting and currently trades at $345.40.
Read our full, actionable report on Cummins here, it’s free.
Shyft (NASDAQ: SHYF)
Notably receiving an order from FedEx for electric vehicles, Shyft (NASDAQ: SHYF) offers specialty vehicles and truck bodies for various industries.
Shyft reported revenues of $204.6 million, up 3.4% year on year. This print surpassed analysts’ expectations by 2.8%. Overall, it was an incredible quarter as it also produced an impressive beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.
Shyft scored the highest full-year guidance raise among its peers. The stock is up 72% since reporting and currently trades at $12.54.
Read our full, actionable report on Shyft here, it’s free.
Market Update
Thanks to the Fed’s series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% in November), and a notable surge followed Donald Trump’s presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. The path forward holds both optimism and caution as new policies take shape.
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