Ryder System Inc. Common Stock (R)

FairStock Score: 41/100 — MIXED

Key Financials

Strengths

• Generates $753 million in annual free cash flow (7.8% yield on market cap)
• Solid return on equity of 16.2% above cost of capital
• Established organization with 51,600 employees providing operational scale

Concerns

• Trades significantly above Graham Number ($141) with negative 73% margin of safety—limited downside protection
• High leverage at 2.84x debt-to-equity increases financial risk and interest expense burden
• Revenue declining at 0.6% year-over-year signals potential demand weakness or market share loss
• Altman Z-Score of 0.8 places it in the financial distress zone—elevated bankruptcy risk

AI Analysis

Ryder System Inc. Common Stock is a small-cap industrials company valued at $9.7 billion. The business generates $12.7 billion in annual revenue with a 0.7% net margin and $753 million in free cash flow. From a quality standpoint, Ryder shows distressed Altman Z-Score of 0.8 warrants caution and adequate 16% ROE. On valuation, the stock is reasonably priced at 20.2x earnings, with trades above its Graham Number with a negative 73% margin. Growth dynamics show revenue growing at -0.6% and profit growth of -2.2%. The 1.6% dividend yield adds an income component for patient holders. Our composite FairStock Score of 41/100 reflects below-average fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

Improving fundamentals and sector tailwinds could drive meaningful earnings growth, compressing the effective multiple for patient investors. With $753 million in annual free cash flow (7.8% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

Elevated leverage at 2.8x D/E means rising interest rates or revenue weakness could strain debt covenants and force asset sales at distressed prices. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer