Ryder (R): Buy, Sell, or Hold Post Q3 Earnings?

While the S&P 500 is up 16.9% since May 2025, Ryder (currently trading at $169.50 per share) has lagged behind, posting a return of 8.3%. This might have investors contemplating their next move.

Is there a buying opportunity in Ryder, or does it present a risk to your portfolio? Get the full stock story straight from our expert analysts, it’s free for active Edge members.

Why Do We Think Ryder Will Underperform?

We don't have much confidence in Ryder. Here are three reasons we avoid R and a stock we'd rather own.

1. Lackluster Revenue Growth

Long-term growth is the most important, but within industrials, a stretched historical view may miss new industry trends or demand cycles. Ryder’s recent performance shows its demand has slowed as its annualized revenue growth of 3.5% over the last two years was below its five-year trend. We also note many other Ground Transportation businesses have faced declining sales because of cyclical headwinds. While Ryder grew slower than we’d like, it did do better than its peers.

2. EPS Took a Dip Over the Last Two Years

Although long-term earnings trends give us the big picture, we like to analyze EPS over a shorter period to see if we are missing a change in the business.

Sadly for Ryder, its EPS declined by 4% annually over the last two years while its revenue grew by 3.5%. This tells us the company became less profitable on a per-share basis as it expanded.

3. Free Cash Flow Margin Dropping

Free cash flow isn't a prominently featured metric in company financials and earnings releases, but we think it's telling because it accounts for all operating and capital expenses, making it tough to manipulate. Cash is king.

As you can see below, Ryder’s margin dropped by 5.8 percentage points over the last five years. It may have ticked higher more recently, but shareholders are likely hoping for its margin to at least revert to its historical level. Almost any movement in the wrong direction is undesirable because it’s already burning cash. If the longer-term trend returns, it could signal it’s becoming a more capital-intensive business. Ryder’s free cash flow margin for the trailing 12 months was breakeven.

Final Judgment

Ryder doesn’t pass our quality test. With its shares lagging the market recently, the stock trades at 12× forward P/E (or $169.50 per share). While this valuation is reasonable, we don’t see a big opportunity at the moment. There are superior stocks to buy right now. Let us point you toward our favorite semiconductor picks and shovels play.

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