Back to top
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Ryder System, Inc. (R) - free report >>
Landstar System, Inc. (LSTR) - free report >>
We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Ryder System, Inc. (R) - free report >>
Landstar System, Inc. (LSTR) - free report >>
Image: Bigstock
Here's Why You Should Retain Ryder System (R) Stock Now
Ryder System, Inc. (R - Free Report) stock has surged 81.2% in the past year compared with 63.6% growth of the industry it belongs to.
For 2021, earnings and revenue are expected to grow at a rate of more than 100% and 11%, respectively, on a year-over-year basis.
Key Growth Drivers
Ryder is benefiting from an improvement in the economic and freight market conditions. The company’s Supply Chain Solutions (“SCS”) segment recovered from the second half of 2020. Segmental revenues increased year over year in the last four reported quarters owing to new business and higher volumes. The Fleet Management Solutions (“FMS”) segment generated higher year-over-year revenues in the first and the second quarter on increased rental pricing. As the freight environment continues to improve, the SCS and FMS segments are expected to continue to improve as well.
Ryder’s consistent cost-cutting measures support its bottom-line growth. Through 2020, it generated annualized savings of $50 million from its multi-year maintenance cost-saving initiative. The company expects to generate additional savings of $30 million in 2021.
Primary Concern
The company’s weak liquidity position is a concern. At the end of the second quarter, the company’s cash and cash equivalents stood at $268 million, much less than the current debt of $1,363 million. This implies that the company does not have sufficient cash to meet its current debt obligations. Moreover, the company's current ratio (a measure of liquidity) at the end of the June quarter was pegged at 0.59. A current ratio of less than 1 is not desirable as it implies that the company may have problems meeting its short-term obligations.
Zacks Rank & Stocks to Consider
Ryder’ currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Zacks Transportation sector are Schneider National, Inc. (SNDR - Free Report) , Werner Enterprises, Inc. (WERN - Free Report) and Landstar System, Inc. (LSTR - Free Report) . All the stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1(Strong Buy) Rank stocks here.
Long-term expected earnings per share (three to five years) growth rate for Schneider National, Werner and Landstar is pegged at 17.9%, 13.1% and 12%, respectively.