Werner's first quarter results were met with a negative market reaction, driven by a combination of elevated insurance claims, disruptive weather, and increased technology investment that weighed on profitability. CEO Derek Leathers was candid about the company's underperformance, citing a significant insurance verdict and weather-related disruptions as key drivers of the loss. Leathers stated, “Our first quarter results did not meet our expectations,” and highlighted that adverse insurance outcomes, including a single large verdict, had a meaningful impact. Management also pointed to higher IT spending and isolated operating inefficiencies as compounding factors.
Is now the time to buy WERN? Find out in our full research report (it’s free).
Werner (WERN) Q1 CY2025 Highlights:
- Revenue: $712.1 million vs analyst estimates of $737.2 million (7.4% year-on-year decline, 3.4% miss)
- Adjusted EPS: -$0.12 vs analyst estimates of $0.12 (significant miss)
- Adjusted EBITDA: $65.73 million vs analyst estimates of $89.32 million (9.2% margin, 26.4% miss)
- Operating Margin: -0.8%, down from 2% in the same quarter last year
- Market Capitalization: $1.7 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Werner’s Q1 Earnings Call
- Jason Seidl (TD Cowen) asked about the margin dynamics between dedicated and One-Way divisions. CEO Derek Leathers clarified that dedicated margins outperformed One-Way, which remained under pressure, and that new dedicated wins should be margin accretive as they ramp up.
- Ari Rosa (Citigroup) pressed on structural changes to address insurance cost volatility. Leathers acknowledged the unpredictability, emphasizing ongoing focus on safety and legislative advocacy but conceding that outsized verdicts remain a material industry risk.
- Scott Group (Wolfe Research) questioned whether recent M&A activity contributed to the operating loss. Leathers responded that acquisitions occurred before the freight downturn and have yet to deliver full operating leverage, but customer growth remains positive within acquired businesses.
- Bascome Majors (Susquehanna) inquired about the effects of tariff uncertainty on retailer customer discussions and bid season. Management noted that retail customers are seeking execution certainty, with more business shifting from spot to contract, and that bid outcomes and actual volumes are tracking more closely this year.
- Chris Wetherbee (Wells Fargo) sought clarity on the timeline and financial benefits of the EDGE TMS technology rollout. Leathers stated that full productivity gains are expected to materialize late Q3 into Q4, with logistics operations already seeing some improvement.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will be monitoring (1) the successful onboarding and performance of newly awarded dedicated fleet contracts, (2) progress toward achieving the increased cost savings target and the resulting impact on margins, and (3) the pace and effectiveness of the EDGE TMS technology rollout across all business lines. Developments in tariff policy and insurance claim trends will also be important external factors to watch.
Werner currently trades at $27.55, in line with $27.66 just before the earnings. Is the company at an inflection point that warrants a buy or sell? See for yourself in our full research report (it’s free).
Our Favorite Stocks Right Now
The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.
While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio by checking out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
