Greenbrier Companies GBX is grappling with significant challenges that are resulting in weak operational efficiency. Weak liquidity is further hurting the company’s prospects, making it an unattractive choice for investors’ portfolios.

Let’s delve deeper.

GBX: Key Risks to Watch

Southward Earnings Estimate Revision: The Zacks Consensus Estimate for the current-year earnings has been revised 12.7% downward over the past 60 days and is pegged at $5.15 per share. Meanwhile, the Zacks Consensus Estimate for 2026 earnings is pegged at $5.40 per share, indicating a 13.6% fall over the past 60 days.

The unfavorable estimate revision indicates brokers’ lack of confidence in the stock.

Dim Price Performance:  The company’s price trend reveals that its shares have fallen 29.7% over the past year compared with the Transportation - Equipment and Leasing industry’s 18.5% decline.

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Unimpressive Earnings Surprise History: GBX has an encouraging earnings surprise history, having surpassed the Zacks Consensus Estimate in two of the trailing three quarters and missing once. The average negative surprise is 42.5%.

Weak Zacks Rank: GBX currently carries a Zacks Rank #4 (Sell).

Bearish Industry Rank: The industry to which Greenbrier belongs currently has a Zacks Industry Rank of 212 (out of 247). Such a favorable rank places it in the bottom 14% of Zacks Industries.Studies show that 50% of a stock price movement is directly related to the performance of the industry group it belongs to.

A mediocre stock within a strong group is likely to outclass a robust stock in a weak industry. Reckoning the industry’s performance becomes imperative.

Headwinds: Greenbrier is mired in significant challenges that are adversely impacting its performance. Revenues dropped from $875.9 million in the first quarter of 2025 to $762.1 million in the second quarter of 2025, primarily driven by fewer deliveries in North America and Europe, reflecting timing issues and production shifts. The gross margin declined from 19.8% to 18.2% in the same period, pressured by lower revenues and $2.4 million in European rationalization costs.

S&A expenses rose from $62 million in the first quarter of 2025 to $64.6 million in the second quarter of 2025, including $4.2 million in restructuring costs, highlighting cost pressures, even amid falling sales. Overall, the results reflect slowing revenue growth and emerging margin pressure, underscoring concerns about GBX’s operational efficiency.

Moreover, Greenbrier Companies is facing mounting pressure as its current ratio continues to deteriorate, reflecting growing liquidity concerns. The metric fell from 1.88 in 2022 to 1.63 in 2023, dipped further to 1.58 in 2024 and hit 1.50 in 2025. This consistent downtrend highlights the company’s declining ability to cover short-term liabilities, which could undermine operational flexibility. This sustained erosion in GBX’s current ratio is a clear red flag. Investors should approach with caution, as the company’s liquidity position appears to weaken year over year.

Stocks to Consider

Investors interested in the Transportation sector may consider Ryanair RYAAY and Expeditors International of Washington EXPD.

Ryanair currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

RYAAY has an expected earnings growth rate of 39.7% for the next quarter of 2025. The company has a mixed earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in two of the trailing four quarters and missed twice, delivering an average surprise of 44.5%.

Expeditors International of Washington carries a Zacks Rank of 2 at present.

The company has an encouraging track record regarding earnings surprise, having surpassed the Zacks Consensus Estimate in three of the trailing four quarters and meeting once. The average surprise was 11.6%.

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Ryanair Holdings PLC (RYAAY) : Free Stock Analysis Report

Expeditors International of Washington, Inc. (EXPD) : Free Stock Analysis Report

Greenbrier Companies, Inc. (The) (GBX) : Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

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