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Here's Why Investors Should Give Ryder System Stock a Miss Now
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Key Takeaways
Ryder's Q1 2025 operating expenses rose 0.44% year over year due to higher service costs.
Cost of services, making up 59% of expenses, increased 1.7% year over year in the latest quarter.
Ryder ended the quarter with a current ratio of 0.73, highlighting liquidity concerns.
Ryder System (R - Free Report) is grappling with challenges arising from increased operating expenses and weak liquidity, which are adversely impacting the company’s performance, making it an unattractive choice for investors’ portfolios.
Let’s delve deeper.
Ryder: Key Risks to Watch
Southward Earnings Estimate Revision: The Zacks Consensus Estimate for current-year earnings has moved 2.2% south in the past 60 days. For the next year, the consensus mark for earnings has been revised 3.3% downward in the same time frame. The unfavorable estimate revisions indicate brokers’ lack of confidence in the stock.
Image Source: Zacks Investment Research
Dim Price Performance: The company’s price trend reveals that its shares have dropped 4% year to date compared to the industry’s 4.6% rise.
Image Source: Zacks Investment Research
Weak Zacks Rank: Ryder currently carries a Zacks Rank #4 (Sell).
Headwinds: Ryder continues to face significant financial pressure due to elevated operating costs and weak liquidity. In the first quarter of 2025, the company’s operating expenses remained high, registering a year-over-year increase of 0.44%. This uptick was primarily driven by a 1.7% rise in the cost of services, which constitutes approximately 59% of total operating expenses.
The trend of rising costs is not new for Ryder. The company has experienced a consistent increase in operating expenses over recent years, with year-over-year growth of 7.3% in 2024, 3.4% in 2023 and a notable 20.4% in 2022. This sustained upward trajectory in expenses poses a substantial risk to R’s operational and financial stability.
Moreover, the company exited the March-end quarter with a current ratio (a measure of liquidity) of 0.73. A current ratio of less than 1 is not desirable as it indicates that the company may not hold sufficient cash to meet its short-term obligations.
CPA has an expected earnings growth rate of 14.3% for the current year. The company has an impressive earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average beat of 5.5%. Shares of CPA have risen 22.8% year to date.
RYAAY currently sports a Zacks Rank of 1.
RYAAY has an expected earnings growth rate of 30.5% for the current year. The company has a mixed earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in two of the trailing four quarters and missed twice, delivering an average beat of 46.6%. Shares of RYAAY have rallied 31.1% year to date.
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Here's Why Investors Should Give Ryder System Stock a Miss Now
Key Takeaways
Ryder System (R - Free Report) is grappling with challenges arising from increased operating expenses and weak liquidity, which are adversely impacting the company’s performance, making it an unattractive choice for investors’ portfolios.
Let’s delve deeper.
Ryder: Key Risks to Watch
Southward Earnings Estimate Revision: The Zacks Consensus Estimate for current-year earnings has moved 2.2% south in the past 60 days. For the next year, the consensus mark for earnings has been revised 3.3% downward in the same time frame. The unfavorable estimate revisions indicate brokers’ lack of confidence in the stock.
Image Source: Zacks Investment Research
Dim Price Performance: The company’s price trend reveals that its shares have dropped 4% year to date compared to the industry’s 4.6% rise.
Image Source: Zacks Investment Research
Weak Zacks Rank: Ryder currently carries a Zacks Rank #4 (Sell).
Headwinds: Ryder continues to face significant financial pressure due to elevated operating costs and weak liquidity. In the first quarter of 2025, the company’s operating expenses remained high, registering a year-over-year increase of 0.44%. This uptick was primarily driven by a 1.7% rise in the cost of services, which constitutes approximately 59% of total operating expenses.
The trend of rising costs is not new for Ryder. The company has experienced a consistent increase in operating expenses over recent years, with year-over-year growth of 7.3% in 2024, 3.4% in 2023 and a notable 20.4% in 2022. This sustained upward trajectory in expenses poses a substantial risk to R’s operational and financial stability.
Moreover, the company exited the March-end quarter with a current ratio (a measure of liquidity) of 0.73. A current ratio of less than 1 is not desirable as it indicates that the company may not hold sufficient cash to meet its short-term obligations.
Stocks to Consider
Investors interested in the Transportation sector may consider Copa Holdings (CPA - Free Report) and Ryanair (RYAAY - Free Report) .
CPA currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
CPA has an expected earnings growth rate of 14.3% for the current year. The company has an impressive earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average beat of 5.5%. Shares of CPA have risen 22.8% year to date.
RYAAY currently sports a Zacks Rank of 1.
RYAAY has an expected earnings growth rate of 30.5% for the current year. The company has a mixed earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in two of the trailing four quarters and missed twice, delivering an average beat of 46.6%. Shares of RYAAY have rallied 31.1% year to date.