Reflecting On Ground Transportation Stocks’ Q3 Earnings: Ryder (NYSE:R)

December 27, 2024 at 04:10 AM EST

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As the Q3 earnings season wraps, let’s dig into this quarter’s best and worst performers in the ground transportation industry, including Ryder (NYSE: R) and its peers.

The growth of e-commerce and global trade continues to drive demand for shipping services, especially last-mile delivery, presenting opportunities for ground transportation companies. The industry continues to invest in data, analytics, and autonomous fleets to optimize efficiency and find the most cost-effective routes. Despite the essential services this industry provides, ground transportation companies are still at the whim of economic cycles. Consumer spending, for example, can greatly impact the demand for these companies’ offerings while fuel costs can influence profit margins.

The 16 ground transportation stocks we track reported a softer Q3. As a group, revenues missed analysts’ consensus estimates by 1.9%.

In light of this news, share prices of the companies have held steady. On average, they are relatively unchanged since the latest earnings results.

Ryder (NYSE: R)

As one of the first companies to introduce the idea of leasing trucks, Ryder (NYSE: R) provides rental vehicles to businesses and delivers packages directly to homes or businesses.

Ryder reported revenues of $3.17 billion, up 8.3% year on year. This print fell short of analysts’ expectations by 3.8%. Overall, it was a slower quarter for the company with a significant miss of analysts’ EBITDA estimates and EPS guidance for next quarter missing analysts’ expectations.

"Ryder’s solid third-quarter performance reflects continued execution of our balanced growth strategy," says Ryder Chairman and CEO Robert Sanchez.

Interestingly, the stock is up 8.6% since reporting and currently trades at $157.51.

Read our full report on Ryder here, it’s free.

Best Q3: XPO (NYSE: XPO)

Owning a mobile game simulating freight operations for the Tour de France, XPO (NYSE: XPO) is a transportation company specializing in expedited shipping services.

XPO reported revenues of $2.05 billion, up 3.7% year on year, outperforming analysts’ expectations by 1.8%. The business had a very strong quarter with a solid beat of analysts’ EBITDA estimates.

XPO pulled off the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 9.8% since reporting. It currently trades at $132.01.

Is now the time to buy XPO? Access our full analysis of the earnings results here, it’s free.

Weakest Q3: Werner (NASDAQ: WERN)

Conducting business in over a 100 countries, Werner (NASDAQ: WERN) offers full-truckload, less-than-truckload, and intermodal delivery services.

Werner reported revenues of $745.7 million, down 8.8% year on year, falling short of analysts’ expectations by 2.6%. It was a disappointing quarter as it posted a significant miss of analysts’ adjusted operating income estimates.

As expected, the stock is down 4.9% since the results and currently trades at $36.40.

Read our full analysis of Werner’s results here.

Avis Budget Group (NASDAQ: CAR)

The parent company of brands such as Zipcar and Budget Truck Rental, Avis (NASDAQ: CAR) is a provider of car rental and mobility solutions.

Avis Budget Group reported revenues of $3.48 billion, down 2.4% year on year. This number came in 1.5% below analysts' expectations. Overall, it was a disappointing quarter as it also produced a significant miss of analysts’ EBITDA estimates.

The stock is flat since reporting and currently trades at $82.42.

Read our full, actionable report on Avis Budget Group here, it’s free.

RXO (NYSE: RXO)

With access to millions of trucks, RXO (NYSE: RXO) offers full-truckload, less-than-truckload, and last-mile deliveries.

RXO reported revenues of $1.04 billion, up 6.6% year on year. This result missed analysts’ expectations by 0.6%. It was a softer quarter as it also produced a significant miss of analysts’ adjusted operating income estimates and EBITDA guidance for next quarter missing analysts’ expectations.

The stock is down 24.4% since reporting and currently trades at $24.13.

Read our full, actionable report on RXO 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 has thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% each in November and December), 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 the pace and magnitude of future rate cuts as well as potential changes in trade policy and corporate taxes once the Trump administration takes over. The path forward is marked by uncertainty.

Want to invest in winners with rock-solid fundamentals? Check out our Hidden Gem Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

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