Werner Enterprises, Inc. (WERN) | Investment Case

1. Company Snapshot

1.a. Company Description

Werner Enterprises, Inc., a transportation and logistics company, engages in transporting truckload shipments of general commodities in interstate and intrastate commerce in the United States, Mexico, and internationally.It operates through Truckload Transportation Services and Werner Logistics segments.The Truckload Transportation Services segment operates medium-to-long-haul van fleet that transports various consumer nondurable products and other commodities in truckload quantities using dry van trailers; the expedited fleet, which offers time-sensitive truckload services using driver teams; regional short-haul fleet that provides comparable truckload van service in the United States; and temperature controlled fleet, which offers truckload services for temperature sensitive products using temperature-controlled trailers.

It transports retail store merchandise, consumer products, food and beverage products, and manufactured products.The Werner Logistics segment provides non-asset-based transportation and logistics services, including truck brokerage; logistics management services and solutions; rail transportation through alliances with rail and drayage providers; and residential and commercial deliveries of large or heavy items using liftgate straight truck.As of December 31, 2021, the company had a fleet of 8,340 trucks, which included 8,050 company-operated, as well as 290 owned and operated by independent contractors;27,225 company-owned trailers that comprised dry vans, flatbeds, temperature-controlled, and other trailers; and 55 intermodal drayage trucks.

Werner Enterprises, Inc.was founded in 1956 and is headquartered in Omaha, Nebraska.

Show Full description

1.b. Last Insights on WERN

Werner Enterprises' recent performance was driven by a series of positive developments. The company's institutional investor base has shown increased confidence, with Allianz Asset Management GmbH boosting its stake by 52.3% and Thrivent Financial for Lutherans lifting its holdings by 19.0% during the quarter. Additionally, Werner's share price crossed above its 200-day moving average, indicating a potential shift in investor sentiment. Furthermore, the company's M&A activity has been a focus, with a recent call highlighting its strategic efforts.

1.c. Company Highlights

Last Price	35.43
Change Percentage	2.16%
Open	34.54
Previous Close	34.68
Market Cap ( Millions)	2121
Volume	928862
Year High	38.45
Year Low	23.02
M A 50	32.87
M A 200	28.7

FCF Yield	-2.58%
Dividend Yield	1.58%
ROE	-1.03%
Debt / Equity	55.18%
Net Debt / EBIDTA	227.22%
Price To Book	1.56
Price Earnings Ratio	-147.26
Price To FCF	-38.72
Price To sales	0.71
EV / EBITDA	9.24

2. Werner Enterprises' Q4 Earnings: A Strategic Restructuring

Werner Enterprises reported fourth-quarter revenues of $738 million, down 2% year over year, with adjusted operating income of $11.3 million and an adjusted operating margin of 1.5%. The company's EPS came in at $0.05, missing estimates of $0.09. The Dedicated fleet growth, lower insurance costs, and higher equipment gains were more than offset by margin degradation in the One Way Trucking business. The average trucks in the TTS fleet were 7,340 during the quarter, down 2.1% year over year.

Publication Date: Feb -22

                                    📋 Highlights
                                    FirstFleet Acquisition Impact::
                                                Acquisition grows dedicated revenue by 50%, contributing to $3.6B pro forma revenue with $18M annual cost synergies.
Q4 Financial Performance::
                                                Revenue declined 2% YoY to $738M, with adjusted operating margin at 1.5%, offset by dedicated fleet growth and lower insurance costs.
One Way Restructuring::
                                                Trucking revenue net of fuel fell 8%, but revenue per truck rose 2.2%, aiming for profitability improvement by Q2 2026.
2026 Guidance::
                                                Truck fleet growth of 23-28%, dedicated revenue per truck guidance down 1-2%, and $40-45M net interest expense projected.
Balance Sheet Strength::
                                                $702M liquidity with $60M cash and $642M credit facilities, despite $752M debt up 16% YoY, reflecting disciplined capital allocation.

                                

Business Restructuring and Growth Strategy

The company has been executing its strategy to position the business for revenue and earnings growth, including a strategic restructuring of its One Way Trucking business to focus on specialized services. This restructuring is expected to result in profitability enhancement, noticeable in the second quarter. The acquisition of First Fleet, a large dedicated carrier, is immediately accretive and grows Dedicated by 50%. As noted by the management, "We're expecting First Fleet's margins to converge with Werner's traditional dedicated margins within 18-24 months."

Financial Performance and Outlook

The company's financial performance was impacted by the challenging environment, but the actions taken over the last several years are beginning to show tangible progress. Werner expects to capture more market share in Dedicated as customers look for stable, financially viable carriers. The 2026 guidance includes First Fleet, with an average truck fleet guidance range of up 23% to 28%. The company's net interest expense is expected to be between $40 million and $45 million.

Valuation and Growth Prospects

With a P/E Ratio of -147.26 and a P/S Ratio of 0.71, the market is pricing in significant growth prospects. Analysts estimate next year's revenue growth at 7.0%. The company's focus on driving growth in core business, operational excellence, and capital efficiency is expected to drive long-term value creation. The acquisition of First Fleet and the restructuring of One Way Trucking are key steps in this direction.

Conclusion on Future Prospects

The company's proactive approach to restructuring and its focus on long-term dedicated relationships are expected to position Werner for long-term success. With a strong balance sheet and access to capital, the company is well-positioned to navigate the challenges and opportunities in the market. The expected margin improvement and revenue growth prospects make Werner an attractive investment opportunity.

3. NewsRoom

Werner Enterprises, Inc. (WERN) Presents at Barclays 43rd Annual Industrial Select Conference Transcript

Feb -18

Source: seekingalpha.com

Werner Enterprises, Inc. (WERN) Presents at Citi's Global Industrial Tech & Mobility Conference 2026 Transcript

Feb -17

Source: seekingalpha.com

Werner Enterprises Touts FirstFleet Deal, Sees Supply-Driven Truckload Cycle Inflection at Conference

Feb -16

Source: defenseworld.net

Werner Enterprises, Inc. (NASDAQ:WERN) Given Consensus Rating of “Reduce” by Analysts

Feb -13

Source: defenseworld.net

Werner Stock Price Declines 7.8% Since Q4 Earnings Release

Feb -11

Source: zacks.com

Werner Adds Leverage At The Bottom Of The Cycle

Feb -10

Source: seekingalpha.com

Allianz Asset Management GmbH Purchases 197,155 Shares of Werner Enterprises, Inc. $WERN

Feb -08

Source: defenseworld.net

Thrivent Financial for Lutherans Grows Stock Position in Werner Enterprises, Inc. $WERN

Feb -08

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.66%)

6. Segments

Truckload Transportation Services

Expected Growth: 4%

Werner Enterprises' Truckload Transportation Services growth is driven by increasing demand for e-commerce and online shopping, resulting in higher freight volumes. Additionally, the company's investments in digitalization, such as its Werner EDGE platform, have improved operational efficiency and attracted more customers. Furthermore, the ongoing driver shortage has led to increased pricing power for carriers like Werner, contributing to revenue growth.

Werner Logistics

Expected Growth: 3%

Werner Logistics' 3% growth is driven by increasing demand for dedicated transportation services, strategic fleet expansion, and investments in digital freight matching technology. Additionally, the company's focus on operational efficiency, cost savings, and customer retention also contribute to its growth momentum.

Other

Expected Growth: 2%

Werner Enterprises' 'Other' segment growth is driven by increased demand for logistics and transportation services, expansion of its final mile delivery network, and strategic acquisitions. Additionally, growth in e-commerce and the need for efficient supply chain management solutions also contribute to this segment's growth.

Inter-segment Eliminations

Expected Growth: 0%

Werner Enterprises' Inter-segment Eliminations with 0% growth is driven by stagnant freight volumes, flat fuel prices, and stable operating expenses, indicating a neutral market environment. The lack of growth is also attributed to the company's diversified business model, which offsets gains in one segment with losses in another, resulting in no net change.

Corporate

Expected Growth: 1%

Werner Enterprises, Inc.'s corporate segment growth is driven by increasing demand for logistics and transportation services, strategic acquisitions, and investments in technology and digitalization. Additionally, the company's focus on operational efficiency, cost savings, and customer relationships contributes to its growth. Furthermore, the rising e-commerce trend and growing need for supply chain management solutions also support the segment's growth.

7. Detailed Products

Truckload Services

Werner Enterprises provides truckload services, offering one-way, round-trip, and dedicated truckload solutions to meet customers' unique needs.

Dedicated Services

Werner's dedicated services offer customized transportation solutions, including dedicated fleets, warehousing, and distribution services.

Intermodal Services

Werner's intermodal services combine truck and rail transportation to provide efficient and cost-effective solutions for long-haul shipments.

Logistics Services

Werner's logistics services provide comprehensive supply chain management solutions, including freight brokerage, warehousing, and distribution services.

Final Mile Delivery

Werner's final mile delivery services provide last-mile delivery solutions for businesses, including same-day, next-day, and two-day delivery options.

Freight Brokerage

Werner's freight brokerage services connect shippers with qualified carriers, providing access to a vast network of transportation providers.

8. Werner Enterprises, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Werner Enterprises, Inc. is medium due to the availability of alternative transportation services, but the company's strong brand and customer loyalty mitigate this threat.

Bargaining Power Of Customers

The bargaining power of customers is low due to Werner Enterprises, Inc.'s large customer base and diversified revenue streams, making it difficult for individual customers to negotiate prices.

Bargaining Power Of Suppliers

The bargaining power of suppliers is medium due to the company's dependence on fuel suppliers, but Werner Enterprises, Inc.'s large scale of operations and long-term contracts mitigate this threat.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the trucking industry, including significant capital requirements and regulatory hurdles.

Intensity Of Rivalry

The intensity of rivalry is high due to the competitive nature of the trucking industry, with many established players competing for market share.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	29.80%
Debt Cost	6.80%
Equity Weight	70.20%
Equity Cost	8.25%
WACC	7.82%
Leverage	42.45%

11. Quality Control: Werner Enterprises, Inc. passed 5 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Inefficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Trinity Industries

A-Score: 5.5/10

Value: 6.1

Growth: 5.9

Quality: 3.2

Yield: 8.0

Momentum: 2.5

Volatility: 7.0

1-Year Total Return ->

Installed Building Products

A-Score: 5.0/10

Value: 2.1

Growth: 9.0

Quality: 5.7

Yield: 2.0

Momentum: 7.0

Volatility: 4.3

1-Year Total Return ->

Schneider National

A-Score: 4.3/10

Value: 5.9

Growth: 3.4

Quality: 5.1

Yield: 3.0

Momentum: 1.5

Volatility: 7.0

1-Year Total Return ->

Werner Enterprises

A-Score: 4.1/10

Value: 6.4

Growth: 3.7

Quality: 4.4

Yield: 3.0

Momentum: 1.0

Volatility: 6.3

1-Year Total Return ->

Saia

A-Score: 3.8/10

Value: 4.8

Growth: 7.4

Quality: 6.0

Yield: 0.0

Momentum: 1.5

Volatility: 3.3

1-Year Total Return ->

RXO

A-Score: 2.4/10

Value: 5.8

Growth: 1.2

Quality: 4.4

Yield: 0.0

Momentum: 0.5

Volatility: 2.3

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

34.78%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

7.82%

Werner Enterprises, Inc. - US9507551086

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on WERN

1.c. Company Highlights

Weak Momentum

Less Volatile

Average Quality

Earnings Miss

Revenues Miss

Stable Momentum

Lower Quality

Average Growth

Medium Volatility

Earnings Beats

Fairly Valued

2. Werner Enterprises' Q4 Earnings: A Strategic Restructuring

Business Restructuring and Growth Strategy

Financial Performance and Outlook

Valuation and Growth Prospects

Conclusion on Future Prospects

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.66%)

6. Segments

Truckload Transportation Services

Expected Growth: 4%

Werner Logistics

Expected Growth: 3%

Other

Expected Growth: 2%

Inter-segment Eliminations

Expected Growth: 0%

Corporate

Expected Growth: 1%

7. Detailed Products

Truckload Services

Dedicated Services

Intermodal Services

Logistics Services

Final Mile Delivery

Freight Brokerage

8. Werner Enterprises, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Werner Enterprises, Inc. passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

35.43$

Current Price

35.43$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA