# Werner Enterprises Inc. (WERN) — Financial Analysis

**Exchange:** NASDAQ  
**Coverage as of:** 2026-Q2  
**Updated:** 2026-05-29  
**Tier:** Free primer (step 2 of 19)  
**Sibling pages:** /stocks/WERN/thesis · /stocks/WERN/memo

## Financial Snapshot

---
source: coverage-next-full
ticker: WERN
step: "04"
title: Financial Snapshot — Three-Year P&L Analysis
created: 2026-05-29
---

### Step 04 — Financial Snapshot

#### Three-Year Income Statement Summary

| Metric | FY2021 | FY2022 | FY2023 |
|--------|--------|--------|--------|
| Total Revenues | $2,793M | $3,286M | $2,748M |
| Revenue Growth | +29% | +18% | -16% |
| Operating Income | $318M | $393M | $188M |
| Operating Margin | 11.4% | 12.0% | 6.8% |
| Operating Ratio (OR) | 88.6% | 88.0% | 93.2% |
| Net Income | $252M | $310M | $153M |
| Net Margin | 9.0% | 9.4% | 5.6% |
| Diluted EPS | $3.65 | $4.58 | $2.27 |
| Adjusted EPS | $3.72 | $4.64 | $2.35 |
| EBITDA (est.) | ~$595M | ~$680M | ~$480M |
| EBITDA Margin | ~21.3% | ~20.7% | ~17.5% |

*Note: EPS figures reflect actual reported results; revenue and operating income from 10-K filings. EBITDA estimated from operating income + D&A.*

#### Freight Cycle Context

The three-year financial history tells a freight cycle story:

**FY2021**: Post-COVID goods demand surge. Werner benefited substantially — one-way TL spot rates were at historic highs, contract rates repriced upward with a 6-12 month lag. Revenue grew 29%, EPS reached $3.65, and Werner's OR improved meaningfully. Dedicated provided the stable floor; OWT generated windfall earnings.

**FY2022**: Cycle peak. Werner's best year in recent history: revenue $3.3B, EPS $4.58, OR 88.0%. The dedicated book was renewing at favorable rates locked in during the 2021-2022 environment. One-way TL remained strong through mid-2022, then started to soften in H2 2022 as goods demand moderated.

**FY2023**: Freight downcycle hit hard. One-way TL rates fell ~15-20% from peak levels. Werner's OR deteriorated to 93.2% — a 520 basis point expansion from FY2022. EPS fell to $2.27, nearly 50% below peak. Werner Logistics was also compressed as brokerage spot rates collapsed.

#### Margin Analysis

##### Operating Ratio (OR) Decomposition

The OR (total operating expenses / total revenues) is the primary trucking profitability metric. A lower OR is better (higher profitability).

**Werner's OR Components (FY2023 approximation):**

| Line Item | % of Revenue |
|-----------|-------------|
| Salaries, wages & benefits | ~36-37% |
| Fuel & fuel taxes | ~12-13% |
| Supplies & maintenance | ~8-9% |
| Depreciation (tractors/trailers) | ~8-9% |
| Independent contractor costs | ~6-7% |
| Insurance & claims | ~4-5% |
| Revenue equipment rental (leases) | ~2-3% |
| General & administrative | ~4-5% |
| Other operating expenses | ~3-4% |
| **Total Operating Expenses / Revenue** | **~93%** |

**Key margin levers:**
- **Driver wages**: Largest cost line, ~37% of revenue. Werner has indexed driver pay to freight rates to some extent, but wages are sticky downward — driver retention requires competitive pay even when revenue per mile falls.
- **Fuel**: Fuel surcharges offset ~90-95% of fuel cost fluctuations, but the hedge is imperfect. Net fuel cost is a real P&L risk if diesel moves faster than the surcharge index resets.
- **Depreciation**: Relatively fixed in the near term based on fleet size. Werner has been moderating CapEx to manage this line.
- **Insurance & claims**: A volatile line — large liability verdicts (nuclear verdicts) in trucking have been inflating insurance premiums industry-wide since 2019. Werner has maintained a self-insured retention layer.

##### EBITDA Bridge FY2022→FY2023

| Item | $ Impact |
|------|----------|
| Revenue decline (-$538M) | -$538M |
| Operating leverage (fixed cost dilution) | -$120M |
| Fuel surcharge partially offset | +$40M |
| Driver wage/benefit cost reduction | +$50M |
| D&A reduction (lower CapEx) | +$15M |
| **Approximate EBITDA decline** | **-$200M** |

#### EPS Bridge FY2022→FY2023

| Item | Per Share Impact |
|------|-----------------|
| Revenue/rate compression (OWT) | -$2.00 |
| Logistics margin compression | -$0.35 |
| Cost reductions/fleet rightsizing | +$0.15 |
| Tax rate change | +$0.05 |
| Share count reduction (buybacks) | +$0.05 |
| Other | -$0.21 |
| **Reported EPS change** | **-$2.31** |

#### Key Valuation Multiples (Indicative — Based on $26-30 Share Price Range 2024)

| Metric | FY2022 (Peak) | FY2023 (Trough) | Normalized (Est.) |
|--------|---------------|-----------------|-------------------|
| P/E | 6-7x | 12-14x | 10-12x |
| EV/EBITDA | 4.5-5.5x | 6.5-8.0x | 6.0-7.0x |
| Price/Sales | 0.85-1.0x | 0.9-1.1x | ~1.0x |
| EV/Revenue | 1.0-1.2x | 1.1-1.3x | ~1.1x |

#### Tax Rate

Werner's effective tax rate is approximately 24-26%, consistent with typical US large-cap industrials with no significant foreign tax jurisdictions. Werner generates the vast majority of income in the US. The tax-deductible nature of fleet depreciation (accelerated depreciation/bonus depreciation) has periodically reduced cash taxes below GAAP rates.

#### Free Cash Flow Profile

| Metric | FY2022 | FY2023 |
|--------|--------|--------|
| Operating Cash Flow | ~$560M | ~$430M |
| CapEx | ~$520M | ~$380M |
| Free Cash Flow | ~$40M | ~$50M |
| FCF Margin | ~1.2% | ~1.8% |

Werner's FCF conversion is structurally low due to capital-intensive fleet replacement. CapEx consists almost entirely of revenue equipment (tractors + trailers). The company manages fleet age aggressively — older trucks increase maintenance costs and driver dissatisfaction. FCF improves meaningfully when CapEx falls (as in 2023-2024 fleet rightsizing) but this comes at the cost of aging the fleet.

#### Freight Cycle Recovery Scenario

If OWT rates recover to mid-cycle levels by 2025-2026:
- Revenue recovery to ~$3.0-3.1B
- OR improvement to ~91.5-92.5%
- Operating income ~$220-260M
- EPS recovery to $3.00-3.50
- This would represent 30-50% upside to 2023 EPS from the trough

The market's pricing of the recovery trajectory is the central investment debate.

## Deeper Financial Analysis

The fundamental tier ($1.00) adds 8 dimensions not included here:

- Revenue Breakdown — segment revenue, geographic mix, product-line margins
- Financial Trends — QoQ momentum, leading indicators, inflection points
- Balance Sheet — debt structure, dilution risk, working capital dynamics
- Capital Allocation — ROIC, buyback cadence, reinvestment efficiency
- Earnings Analysis — beats/misses, guidance vs actuals, transcript highlights
- Competitive Positioning — market share, pricing power, peer benchmarks
- Industry Context — TAM, sector tailwinds/headwinds, regulatory backdrop

**API endpoint:** GET /api/v1/research/WERN/fundamental

## Navigation

- Overview: /stocks/WERN
- Financials (this page): /stocks/WERN/financials
- Thesis: /stocks/WERN/thesis
- Investment Memo: /stocks/WERN/memo
- Coverage universe: /stocks