Ryder has followed the market’s trajectory closely, rising in tandem with the S&P 500 over the past six months. The stock has climbed by 14.8% to $246.96 per share while the index has gained 11.7%.
Is there a buying opportunity in Ryder, or does it present a risk to your portfolio? See what our analysts have to say in our full research report, it’s free.
Why Is Ryder Not Exciting?
We’re sitting this one out for now. Here are three reasons we avoid R, plus one stock we’d rather own.
1. Long-Term Revenue Growth Disappoints
A company’s long-term sales performance is one signal of its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Unfortunately, Ryder’s 7.4% annualized revenue growth over the last five years was mediocre. This was below our standard for the industrials sector.
2. Low Gross Margin Reveals Weak Structural Profitability
For industrial businesses, cost of sales is usually comprised of the direct labor, raw materials, and supplies needed to offer a product or service. These costs can be impacted by inflation and supply chain dynamics in the short term and a company’s purchasing power and scale over the long term.
Ryder has bad unit economics for an industrials business, signaling it operates in a competitive market. As you can see below, it averaged a 19.7% gross margin over the last five years. That means Ryder paid its suppliers a lot of money ($80.27 for every $100 in revenue) to run its business.
3. Cash Burn Ignites Concerns
If you’ve followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can’t use accounting profits to pay the bills.
While Ryder posted positive free cash flow this quarter, the broader story hasn’t been so clean. Ryder’s demanding reinvestments have drained its resources over the last five years, putting it in a pinch and limiting its ability to return capital to investors. Its free cash flow margin averaged negative 1.2%, meaning it lit $1.20 of cash on fire for every $100 in revenue.
Final Judgment
Ryder isn’t a terrible business, but it isn’t one of our picks. That said, the stock currently trades at 14.9× forward P/E (or $246.96 per share). This valuation multiple is fair, but we don’t have much faith in the company. We’re fairly confident there are better stocks to buy right now. Let us point you toward an all-weather company that owns household favorite Taco Bell.
Stocks We Would Buy Instead of Ryder
ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.
Find out which 5 stocks it’s flagging this month — FREE. Get Our Top 5 Growth Stocks for Free HERE.
Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.
