Freight delivery company Werner (NASDAQ: WERN) fell short of the market’s revenue expectations in Q4 CY2025, with sales falling 2.3% year on year to $737.6 million. Its non-GAAP profit of $0.05 per share was 52.3% below analysts’ consensus estimates.

Is now the time to buy Werner? Find out by accessing our full research report, it’s free.

Company Overview

Conducting business in over a 100 countries, Werner (NASDAQ: WERN) offers full-truckload, less-than-truckload, and intermodal delivery services.

Revenue Growth

A company’s long-term performance is an indicator of its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Unfortunately, Werner’s 4.6% annualized revenue growth over the last five years was tepid. This fell short of our benchmark for the industrials sector and is a rough starting point for our analysis.

We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. Werner’s performance shows it grew in the past but relinquished its gains over the last two years, as its revenue fell by 4.8% annually.

We can dig further into the company’s revenue dynamics by analyzing its most important segments, Truckload Transportation and Logistics, which are 69.5% and 28.1% of revenue. Over the last two years, Werner’s Truckload Transportation revenue (deliveries made with Werner's fleet) averaged 5.7% year-on-year declines while its Logistics revenue (brokered deliveries using third-party fleets) averaged 2.8% declines.

This quarter, Werner missed Wall Street’s estimates and reported a rather uninspiring 2.3% year-on-year revenue decline, generating $737.6 million of revenue.

Looking ahead, sell-side analysts expect revenue to grow 8.8% over the next 12 months, an improvement versus the last two years. This projection is above the sector average and indicates its newer products and services will catalyze better top-line performance.

Software is eating the world and there is virtually no industry left that has been untouched by it. That drives increasing demand for tools helping software developers do their jobs, whether it be monitoring critical cloud infrastructure, integrating audio and video functionality, or ensuring smooth content streaming. Click here to access a free report on our 3 favorite stocks to play this generational megatrend.

Operating Margin

Operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses – everything from the cost of goods sold to advertising and wages. It’s also useful for comparing profitability across companies with different levels of debt and tax rates because it excludes interest and taxes.

Werner was profitable over the last five years but held back by its large cost base. Its average operating margin of 5.8% was weak for an industrials business. This result isn’t too surprising given its low gross margin as a starting point.

Analyzing the trend in its profitability, Werner’s operating margin decreased by 10.9 percentage points over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability. Werner’s performance was poor no matter how you look at it - it shows that costs were rising and it couldn’t pass them onto its customers.

In Q4, Werner generated an operating margin profit margin of negative 4.9%, down 6.6 percentage points year on year. Conversely, its gross margin actually rose, so we can assume its recent inefficiencies were driven by increased operating expenses like marketing, R&D, and administrative overhead.

Earnings Per Share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Sadly for Werner, its EPS declined by 67.1% annually over the last five years while its revenue grew by 4.6%. This tells us the company became less profitable on a per-share basis as it expanded due to non-fundamental factors such as interest expenses and taxes.

Diving into the nuances of Werner’s earnings can give us a better understanding of its performance. As we mentioned earlier, Werner’s operating margin declined by 10.9 percentage points over the last five years. This was the most relevant factor (aside from the revenue impact) behind its lower earnings; interest expenses and taxes can also affect EPS but don’t tell us as much about a company’s fundamentals.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

For Werner, its two-year annual EPS declines of 92.8% show it’s continued to underperform. These results were bad no matter how you slice the data.

In Q4, Werner reported adjusted EPS of $0.05, down from $0.08 in the same quarter last year. This print missed analysts’ estimates. Over the next 12 months, Wall Street expects Werner’s full-year EPS of $0.01 to grow 8,896%.

Key Takeaways from Werner’s Q4 Results

We struggled to find many positives in these results. Its Logistics revenue missed and its revenue fell short of Wall Street’s estimates. Overall, this quarter could have been better. The stock traded down 1.2% to $37.44 immediately following the results.

Werner’s earnings report left more to be desired. Let’s look forward to see if this quarter has created an opportunity to buy the stock. When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here (it’s free).