Rush Enterprises Stock Plunges 10% on Q1 Earnings Miss

Rush Enterprises' stock price dropped 10% in pre-market trading on May 1, 2025, marking a significant decline for the commercial vehicle retailer.

Rush Enterprises reported its Q1 CY2025 results, which showed a 1.1% year-on-year decline in sales to $1.85 billion, but managed to beat Wall Street's revenue expectations. The company's GAAP profit of $0.73 per share exceeded analysts' consensus estimates by 1.4%. However, the adjusted EBITDA of $109.1 million fell short of estimates by 25.4%, with a 5.9% margin. The operating margin remained consistent with the same quarter last year at 5%.

Rush Enterprises' Chairman, Chief Executive Officer, and President, W.M. "Rusty" Rush, attributed the challenges in the first quarter to the ongoing freight recession, economic uncertainty, and concerns related to U.S. trade policy, tariffs, and emissions regulations. Despite these challenges, the company's strategic initiatives and diversified customer base helped it slightly outperform the industry. The strength of sales to vocational and public sector customers partially offset the sluggishness from over-the-road customers.

Rush Enterprises, headquartered in Texas, provides truck-related services and solutions, including sales, leasing, parts, and maintenance for commercial vehicles. The company's long-term sales performance has been mediocre, with a 6.3% annualized revenue growth over the last five years, falling short of the benchmark for the industrials sector. The recent performance shows a slowdown in demand, with an annualized revenue growth of 2.2% over the last two years, below its five-year trend. The company's Vehicles revenue (new and used commercial trucks) averaged 3.5% year-on-year growth, while its Aftermarket revenue (parts and services) was flat over the last two years.