New Idea ($WNC) | Trailer Cycle Troughs While Investors Panic

Wabash (WNC) is quietly building backlog, cutting costs, and buying back stock all while the market assumes freight is dead.

Hello All 👋

Welcome to 📉 DeepValue Capital 📈

Every Friday, I break down one early-stage setup the market’s overlooking.

It’s not a buy call, it’s a head start to the research. You get the idea. I do the work.

This week’s First Look covers a stock that’s fallen 72% from its highs… just as orders and backlogs start building again.

But before we get there, let me show you why this process works.

📈 From January 2024 to April 2024, my portfolio is up 129.23%.

YTD, after an incredible start to May, I’m up about 66%. All from setups like this. Mispriced, misunderstood, and loaded with optionality.

TWR of portfolio vs major indexes from 1/1/24 to 4/30/25

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This week’s First Look: Wabash National (WNC)

The market sees a busted trailer stock. I’m watching what looks like the start of a classic demand reset.

WNC is down over 70% since last year. But backlog is building, buybacks are rolling, and cost-cutting is in full swing.

This post will walk you through:

✅ What Wabash actually does

✅ What’s quietly shifting in their favor

✅ Key questions and early upside math

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🧠 What Wabash Actually Does

Wabash National ($WNC) is a U.S.-based manufacturer of trailers and truck bodies, serving logistics, freight, and industrial transport customers.

But this isn’t just a trailer business anymore.

Core Segments:

• Transportation Solutions (Primary Revenue Driver):
  Dry and refrigerated trailers, flatbeds, tankers

• Parts & Services:
  Aftermarket sales, maintenance, and upfitting are growing in strategic importance

Innovation Stack:

• DuraPlate® Panels: Composite materials for longer trailer life

• EcoNex™ Materials: ESG-compliant, sustainability-focused trailer tech

• TaaS (Trailers-as-a-Service): Subscription-based model targeting fleet customers

Strategic Moves:

• Wabash Marketplace (Fernweh JV): Digitizing trailer sales and customer interactions

• Wabash Parts (HTI JV): Expanding into higher-margin aftermarket

• Electric + Autonomous Trailers: Early investment phase

WNC isn’t just a cyclical metal bender it’s trying to evolve the trailer business model itself.

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🔥 Why It’s Interesting Now

The freight cycle has been brutal. Orders collapsed ~30% in 2024, and WNC’s stock followed down more than 70% from highs.

But something is quietly shifting under the surface:

• Backlogs now cover 9 months of production, up from trough levels

• WNC says 2025 deliveries despite increasing YOY will remain below replacement levels, meaning 2026 demand could be even stronger

• Their CEO is already playing offense:

“We’re running our downturn playbook… to take costs out where necessary and align with near-term demand conditions.”

• Historical capital efficiency has been strong: ROIC and ROCE averaged ~13% from 2016–2023

• Buybacks are real: Share count down 5% annually since 2016

(Green) Share Count, (Blue) ROCE

This isn’t just a bounce, it’s a start of a new cycle.

Backlog strength plus shareholder discipline is a combo I always look for in early turnarounds.

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⚠ Questions I still Have

This is still an early-stage idea. Here’s what I need answered before this would become a position:

• What does “normal” trailer demand look like over a full cycle?

• How does WNC stack up to Competitors?

• Do management incentives align with long-term shareholder returns?

• Can WNC turn its parts, TaaS, and electrification efforts into real margin drivers?

• What is the operating history of their current CEO and does he have the expertise to capitalize as the cycle turns?

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📉 Back-of-the-Napkin Valuation (FCF-Based)

Let’s say WNC returns to $200M in FCF at the top of the next cycle, a level they’ve hit before.

Apply a 6x multiple, conservative for a cyclical manufacturer.

That gets you to:

• $1.2B market cap

• Current = $349M

• 243% upside, or a 51% CAGR over 3 years

That’s if execution and the cycle cooperate certainly still a big if.

WNC checks a lot of boxes:

✅ Real buybacks
✅ Backlog bottoming
✅ FCF leverage at scale
✅ Optionality from parts, tech, and services

It’s not in the portfolio yet, and may never be but if this cycle turns, WNC has the upside optionality I’m tracking early.

If the cycle plays out, and management keeps executing… Wabash could go from “left for dead” to a 3x in 3 years or more.

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