Commercial Vehicle Group (NASDAQ:CVGI) Reports Sales Below Analyst Estimates In Q3 Earnings, Stock Drops

Vehicle systems manufacturer Commercial Vehicle Group (NASDAQ:CVGI) fell short of the markets revenue expectations in Q3 CY2025, with sales falling 11.2% year on year to $152.5 million. The company’s full-year revenue guidance of $645 million at the midpoint came in 1.6% below analysts’ estimates. Its non-GAAP loss of $0.14 per share was 16.7% below analysts’ consensus estimates.

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• Revenue: $152.5 million vs analyst estimates of $157.4 million (11.2% year-on-year decline, 3.1% miss)

• Adjusted EPS: -$0.14 vs analyst expectations of -$0.12 (16.7% miss)

• Adjusted EBITDA: $4.6 million vs analyst estimates of $4.78 million (3% margin, relatively in line)

• The company dropped its revenue guidance for the full year to $645 million at the midpoint from $660 million, a 2.3% decrease

• EBITDA guidance for the full year is $18 million at the midpoint, below analyst estimates of $21.01 million

• Operating Margin: -0.7%, down from 1.7% in the same quarter last year

• Free Cash Flow was -$3.50 million compared to -$20.35 million in the same quarter last year

• Market Capitalization: $46.53 million

James Ray, President and Chief Executive Officer, said, “In the face of ongoing lower demand in our key Construction, Agriculture, and Class 8 truck end markets, we were pleased with the resilience seen in our third quarter results. We continued to benefit from our operational efficiency improvement and right sizing our manufacturing footprint and enterprise structural cost, evidenced by the continued sequential expansion in our adjusted gross margin in the quarter, despite the lower demand environment. Furthermore, as part of our efforts to preserve margins and position CVG for an eventual end market recovery, we remain focused on reducing SG&A expenses, and we have made demonstrable progress with customers as it relates to mitigating tariff impacts. I want to sincerely thank every member of the CVG team for their commitment, resilience, and focus on execution.”

Formed from a partnership between two distinct companies, CVG (NASDAQ:CVGI) offers various components used in vehicles and systems used in warehouses.

A company’s long-term sales performance can indicate its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Unfortunately, Commercial Vehicle Group struggled to consistently increase demand as its $657.5 million of sales for the trailing 12 months was close to its revenue five years ago. This wasn’t a great result and is a sign of poor business quality.

Long-term growth is the most important, but within industrials, a half-decade historical view may miss new industry trends or demand cycles. Commercial Vehicle Group’s recent performance shows its demand remained suppressed as its revenue has declined by 17.4% annually over the last two years. Commercial Vehicle Group isn’t alone in its struggles as the Heavy Transportation Equipment industry experienced a cyclical downturn, with many similar businesses observing lower sales at this time.

This quarter, Commercial Vehicle Group missed Wall Street’s estimates and reported a rather uninspiring 11.2% year-on-year revenue decline, generating $152.5 million of revenue.

Looking ahead, sell-side analysts expect revenue to remain flat over the next 12 months. While this projection suggests its newer products and services will catalyze better top-line performance, it is still below the sector average.

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Commercial Vehicle Group was profitable over the last five years but held back by its large cost base. Its average operating margin of 2.9% was weak for an industrials business. This result isn’t too surprising given its low gross margin as a starting point.

Looking at the trend in its profitability, Commercial Vehicle Group’s operating margin decreased by 5.3 percentage points over the last five years. Commercial Vehicle Group’s performance was poor no matter how you look at it – it shows that costs were rising and it couldn’t pass them onto its customers.

In Q3, Commercial Vehicle Group’s breakeven margin was down 2.4 percentage points year on year. Since Commercial Vehicle Group’s operating margin decreased more than its gross margin, we can assume it was less efficient because expenses such as marketing, R&D, and administrative overhead increased.

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Commercial Vehicle Group’s earnings losses deepened over the last five years as its EPS dropped 29.3% annually. We tend to steer our readers away from companies with falling EPS, where diminishing earnings could imply changing secular trends and preferences. If the tide turns unexpectedly, Commercial Vehicle Group’s low margin of safety could leave its stock price susceptible to large downswings.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

Sadly for Commercial Vehicle Group, its EPS declined by more than its revenue over the last two years, dropping 59.2%. This tells us the company struggled to adjust to shrinking demand.

We can take a deeper look into Commercial Vehicle Group’s earnings to better understand the drivers of its performance. Commercial Vehicle Group’s operating margin has declined over the last two yearswhile its share count has grown 1.6%. This means the company not only became less efficient with its operating expenses but also diluted its shareholders.

In Q3, Commercial Vehicle Group reported adjusted EPS of negative $0.14, down from negative $0.01 in the same quarter last year. This print missed analysts’ estimates. Over the next 12 months, Wall Street expects Commercial Vehicle Group to improve its earnings losses. Analysts forecast its full-year EPS of negative $0.46 will advance to negative $0.10.

We struggled to find many positives in these results. Its full-year EBITDA guidance missed and its revenue fell short of Wall Street’s estimates. Overall, this was a weaker quarter. The stock traded down 7.2% to $1.41 immediately after reporting.

Commercial Vehicle Group may have had a tough quarter, but does that actually create an opportunity to invest right now? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here, it’s free for active Edge members.