Vehicle systems manufacturer Commercial Vehicle Group (NASDAQ: CVGI) reported Q2 CY2025 results exceeding the market’s revenue expectations, but sales fell by 25.2% year on year to $172 million. The company expects the full year’s revenue to be around $660 million, close to analysts’ estimates. Its non-GAAP loss of $0.09 per share was 28.6% below analysts’ consensus estimates.

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James Ray, President and Chief Executive Officer, said, “Despite continued macroeconomic volatility, particularly a softening in Construction and Agriculture and Class 8 end markets and ongoing concerns around tariff impacts, we were pleased with continued momentum in our second quarter results, which were highlighted by strong free cash generation. During the quarter, we made progress in implementing operational improvements and right sizing our manufacturing footprint, which drove sequential gross margin improvement for the second consecutive quarter. Additionally, as part of our efforts to preserve margin performance, we are continuing our efforts to further reduce our targeted SG&A levels, and we are having constructive negotiations with customers as it relates to mitigating tariff impacts.”

Company Overview

Formed from a partnership between two distinct companies, CVG (NASDAQ: CVGI) offers various components used in vehicles and systems used in warehouses.

Revenue Growth

A company’s long-term sales performance is one signal of its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Commercial Vehicle Group struggled to consistently generate demand over the last five years as its sales dropped at a 1.5% annual rate. This was below our standards and is a sign of poor business quality.

We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. Commercial Vehicle Group’s recent performance shows its demand remained suppressed as its revenue has declined by 18.2% annually over the last two years. Commercial Vehicle Group isn’t alone in its struggles as the Heavy Transportation Equipment industry experienced a cyclical downturn, with many similar businesses observing lower sales at this time.

This quarter, Commercial Vehicle Group’s revenue fell by 25.2% year on year to $172 million but beat Wall Street’s estimates by 6.4%.

Looking ahead, sell-side analysts expect revenue to remain flat over the next 12 months. Although this projection implies its newer products and services will fuel better top-line performance, it is still below the sector average.

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Operating Margin

Commercial Vehicle Group was profitable over the last five years but held back by its large cost base. Its average operating margin of 3.1% was weak for an industrials business. This result isn’t too surprising given its low gross margin as a starting point.

Analyzing the trend in its profitability, Commercial Vehicle Group’s operating margin decreased by 4.8 percentage points over the last five years. Commercial Vehicle Group’s performance was poor no matter how you look at it - it shows that costs were rising and it couldn’t pass them onto its customers.

This quarter, Commercial Vehicle Group’s breakeven margin was down 1.9 percentage points year on year. Since Commercial Vehicle Group’s operating margin decreased more than its gross margin, we can assume it was less efficient because expenses such as marketing, R&D, and administrative overhead increased.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Sadly for Commercial Vehicle Group, its EPS declined by 82.7% annually over the last five years, more than its revenue. However, its operating margin actually improved during this time, telling us that non-fundamental factors such as interest expenses and taxes affected its ultimate earnings.

We can take a deeper look into Commercial Vehicle Group’s earnings to better understand the drivers of its performance. As we mentioned earlier, Commercial Vehicle Group’s operating margin declined by 4.8 percentage points over the last five years. Its share count also grew by 9.4%, meaning the company not only became less efficient with its operating expenses but also diluted its shareholders.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

For Commercial Vehicle Group, its two-year annual EPS declines of 55.5% show it’s still underperforming. These results were bad no matter how you slice the data.

In Q2, Commercial Vehicle Group reported adjusted EPS at negative $0.09, down from $0.06 in the same quarter last year. This print missed analysts’ estimates. Over the next 12 months, Wall Street is optimistic. Analysts forecast Commercial Vehicle Group’s full-year EPS of negative $0.33 will reach break even.

Key Takeaways from Commercial Vehicle Group’s Q2 Results

We were impressed by how significantly Commercial Vehicle Group blew past analysts’ revenue expectations this quarter. We were also glad its full-year EBITDA guidance trumped Wall Street’s estimates. On the other hand, its EPS missed. Overall, we think this was a decent quarter with some key metrics above expectations. The stock traded up 3.2% to $1.92 immediately after reporting.

Commercial Vehicle Group may have had a good quarter, but does that mean you should invest right now? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.