Here's Why Investors Should Give Werner Stock a Miss Now

Werner Enterprises (WERN) is currently mired in multiple headwinds, which, we believe, have made it an unimpressive investment option.

Let’s delve deeper.

WERN: Key Risks to Watch

Southward Earnings Estimate Revision: The Zacks Consensus Estimate for second-quarter 2025 earnings has moved 78.5% south in the past 60 days. For the current year, the consensus mark for earnings has been revised 65.8% downward in the same time frame. The unfavorable estimate revisions indicate brokers’ lack of confidence in the stock.

Dim Price Performance:  The company’s price trend reveals that its shares have lost 23.5% so far this year compared with the transportation-truck industry’s 16.1% decline.

WERN Stock YTD Price Comparison

Unimpressive Earnings Surprise History: WERN has a discouraging earnings surprise history, having missed the Zacks Consensus Estimate in each of the trailing four quarters. The average miss is 79.95%.

Weak Zacks Rank and Style Score:WERN currently carries a Zacks Rank #5 (Strong Sell). The company’s current Value Score of C shows its unattractiveness.

Earnings Expectations: Downbeat earnings expectations cast a shadow over a company’s prospects. For second-quarter 2025, WERN’s earnings are expected to decline 64.71% year over year. For 2025, WERN’s earnings are expected to decrease 24.53% year over year.

Other Headwinds: Werner's top line continues to grapple with weakness across both of its business segments.  Notably, WERN reported first-quarter 2025 revenues of $712.11 million which lagged the Zacks Consensus Estimate of $746.8 million and dipped 7% on a year-over-year basis due to a $49.3 million, or 9% decrease in Truckload Transportation Services (TTS) revenues and a $6.9 million, or 3% decline in Logistics revenues.

The truck industry, of which Werner is an integral part, has been persistently battling a driver shortage for several years. As old drivers are retiring, trucking companies are finding it difficult to find new drivers to take their place since the low-paying job mostly does not appeal to the younger generation.

Bearish Industry Rank: The industry to which WERN belongs currently has a Zacks Industry Rank of 234 (out of 250). Such an unfavorable rank places it in the bottom 4% of Zacks industries. Studies show that 50% of a stock price movement is directly related to the performance of the industry group it belongs to.

In fact, a robust stock in a weak industry is likely to underperform an ordinary stock in a strong group. Therefore, considering the industry’s performance becomes imperative.

Stocks to Consider

Investors interested in the Transportation sector may also consider Copa Holdings CPA and SkyWest, Inc. (SKYW).

CPA currently flaunts a Zacks Rank #1 (Strong Buy).  You can see the complete list of today’s Zacks #1 Rank 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 24.2% year to date.

SkyWest, founded in 1972, is based in St. George and operates regional jets for major U.S. airlines. SKYW is the holding company for SkyWest Airlines, SkyWest Charter and SkyWest Leasing, an aircraft leasing company. SKYW currently carries a Zacks Rank of 2 (Buy).

SKYW has an impressive earnings surprise track record, having surpassed the Zacks Consensus Estimate in each of the last four quarters. The average beat was 17.1%. The Zacks Consensus Estimate for current and next-year earnings has been revised upward over the past 60 days.

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This article originally published on Zacks Investment Research (zacks.com).

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