Semi trailers and liquid transportation container manufacturer Wabash (NYSE: WNC) beat Wall Street’s revenue expectations in Q2 CY2026, but sales fell by 9.1% year on year to $417.2 million. Next quarter’s revenue guidance ($450 million at the midpoint) was surprisingly good and 8.6% above what analysts were expecting, but non-GAAP EPS guidance for Q3 was below estimates. Its non-GAAP loss of $0.53 per share was 5.4% above analysts’ consensus estimates.

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Company Overview

With its first trailer reportedly built on two sawhorses, Wabash (NYSE: WNC) offers semi trailers, liquid transportation containers, truck bodies, and equipment for moving goods.

Revenue Growth

A company’s long-term sales performance can indicate its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Over the last five years, Wabash’s demand was weak and its revenue declined by 2.3% per year. This was below our standards and suggests it’s a low quality business.

Long-term growth is the most important, but within industrials, a half-decade historical view may miss new industry trends or demand cycles. Wabash’s recent performance shows its demand remained suppressed as its revenue has declined by 21.2% annually over the last two years.

We can dig further into the company’s revenue dynamics by analyzing its backlog, or the value of its outstanding orders that have not yet been executed or delivered. Wabash’s backlog reached $956 million in the latest quarter and averaged 24.9% year-on-year declines over the last two years. Because this number is lower than its revenue growth, we can see the company hasn’t secured enough new orders to maintain its growth rate in the future.

This quarter, Wabash’s revenue fell by 9.1% year on year to $417.2 million but beat Wall Street’s estimates by 3.6%. Company management is currently guiding for a 17.9% year-on-year increase in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 25.9% over the next 12 months, an improvement versus the last two years. This projection is eye-popping and indicates its newer products and services will catalyze better top-line performance.

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Operating Margin

Wabash was profitable over the last five years but held back by its large cost base. Its average operating margin of 3.9% 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, Wabash’s operating margin decreased by 8.7 percentage points over the last five years. Wabash’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.

This quarter, Wabash generated an operating margin profit margin of negative 6.1%, down 5 percentage points year on year. Since Wabash’s gross margin decreased more than its operating margin, we can assume its recent inefficiencies were driven more by weaker leverage on its cost of sales rather than increased marketing, R&D, and administrative overhead expenses.

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 Wabash, its EPS declined by 54.6% annually over the last five years, more than its revenue. This tells us the company struggled because its fixed cost base made it difficult to adjust to shrinking demand.

We can take a deeper look into Wabash’s earnings to better understand the drivers of its performance. As we mentioned earlier, Wabash’s operating margin declined by 8.7 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 Wabash, its two-year annual EPS declines of 72.1% show it’s continued to underperform. These results were bad no matter how you slice the data.

In Q2, Wabash reported adjusted EPS of negative $0.53, down from negative $0.15 in the same quarter last year. Despite falling year on year, this print beat analysts’ estimates by 5.4%. Over the next 12 months, Wall Street is optimistic. Analysts forecast Wabash’s full-year EPS will flip from negative $3.14 to positive $0.63.

Key Takeaways from Wabash’s Q2 Results

We were impressed by how significantly Wabash beat revenue expectations this quarter but are disappointed non-GAAP EPS guidance for Q3 was below analyst estimates. Zooming out, we think this was a mixed print. The stock remained flat at $13.32 immediately after reporting.

Sure, Wabash had a solid quarter, but if we look at the bigger picture, is this stock a buy? 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).