Commercial rental vehicle and delivery company Ryder (NYSE: R) beat Wall Street’s revenue expectations in Q2 CY2026, with sales up 5% year on year to $3.35 billion. Its non-GAAP profit of $3.73 per share was 1% above analysts’ consensus estimates.

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“Consistent execution on our strategic initiatives as well as improving used vehicle market conditions drove our 7th consecutive quarter of comparable EPS growth,” says Ryder Chief Executive Officer John Diez.

Company Overview

As one of the first companies to introduce the idea of leasing trucks, Ryder (NYSE: R) provides rental vehicles to businesses and delivers packages directly to homes or businesses.

Revenue Growth

A company’s long-term sales performance is one signal of its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Regrettably, Ryder’s sales grew at a mediocre 7.4% compounded annual growth rate over the last five years. This was below our standard 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. Ryder’s recent performance shows its demand has slowed as its annualized revenue growth of 2.4% over the last two years was below its five-year trend. We’re wary when companies in the sector see decelerations in revenue growth, as it could signal changing consumer tastes aided by low switching costs.

Ryder also breaks out the revenue for its most important segments, Fleet Management Solutions and Supply Chain Solutions, which are 46.6% and 44% of revenue. Over the last two years, Ryder’s Fleet Management Solutions revenue (leasing and rental) was flat while its Supply Chain Solutions revenue ( designing and managing customers' distribution) averaged 3.7% year-on-year growth.

This quarter, Ryder reported modest year-on-year revenue growth of 5% but beat Wall Street’s estimates by 1.3%.

Looking ahead, sell-side analysts expect revenue to grow 5.5% over the next 12 months. Although this projection suggests its newer products and services will catalyze better top-line performance, it is still below the sector average.

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Operating Margin

Ryder has done a decent job managing its cost base over the last five years. The company has produced an average operating margin of 8.3%, higher than the broader industrials sector.

Analyzing the trend in its profitability, Ryder’s operating margin decreased by 1.7 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.

This quarter, Ryder generated an operating margin profit margin of 8.1%, down 1 percentage points year on year. Since Ryder’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

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth — for example, a company could inflate its sales through excessive spending on advertising and promotions.

Ryder’s EPS grew at 19.4% compounded annual growth rate over the last five years, higher than its 7.4% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

Diving into Ryder’s quality of earnings can give us a better understanding of its performance. A five-year view shows that Ryder has repurchased its stock, shrinking its share count by 27.4%. This tells us its EPS outperformed its revenue not because of increased operational efficiency but financial engineering, as buybacks boost per share earnings.

Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

For Ryder, its two-year annual EPS growth of 7.3% was lower than its five-year trend. We hope its growth can accelerate in the future.

In Q2, Ryder reported adjusted EPS of $3.73, up from $3.32 in the same quarter last year. This print beat analysts’ estimates by 1%. Over the next 12 months, Wall Street expects Ryder’s full-year EPS to grow 19.8% from $13.43 to $16.09.

Key Takeaways from Ryder’s Q2 Results

It was good to see Ryder narrowly top analysts’ revenue and EPS expectations this quarter. Full-year EPS was also raised, which is a good sign. On the other hand, its EPS guidance for next quarter missed. Zooming out, we think this was a solid quarter. The stock traded up 1.4% to $280.12 immediately after reporting.

Big picture, is Ryder a buy here and now? 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).