The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how ground transportation stocks fared in Q3, starting with Heartland Express (NASDAQ:HTLD).
The growth of e-commerce and global trade continues to drive demand for shipping services, especially last-mile delivery, presenting opportunities for ground transportation companies. The industry continues to invest in data, analytics, and autonomous fleets to optimize efficiency and find the most cost-effective routes. Despite the essential services this industry provides, ground transportation companies are still at the whim of economic cycles. Consumer spending, for example, can greatly impact the demand for these companies’ offerings while fuel costs can influence profit margins.
The 16 ground transportation stocks we track reported a softer Q3. As a group, revenues missed analysts’ consensus estimates by 1.9%.
Thankfully, share prices of the companies have been resilient as they are up 9.8% on average since the latest earnings results.
Heartland Express (NASDAQ:HTLD)
Founded by the son of a trucker, Heartland Express (NASDAQ:HTLD) offers full-truckload deliveries across the United States and Mexico.Heartland Express reported revenues of $259.9 million, down 11.9% year on year. This print fell short of analysts’ expectations by 3.2%. Overall, it was a disappointing quarter for the company with a significant miss of analysts’ adjusted operating income estimates.
Heartland Express Chief Executive Officer Mike Gerdin commented on the quarterly operating results and ongoing initiatives of the Company, "Our consolidated operating results for the three and nine months ended September 30, 2024, continue to be hampered by a challenging freight environment."
Heartland Express delivered the slowest revenue growth of the whole group. Interestingly, the stock is up 7.1% since reporting and currently trades at $12.19.
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Best Q3: XPO (NYSE:XPO)
Owning a mobile game simulating freight operations for the Tour de France, XPO (NYSE:XPO) is a transportation company specializing in expedited shipping services.XPO reported revenues of $2.05 billion, up 3.7% year on year, outperforming analysts’ expectations by 1.8%. The business had a very strong quarter with an impressive beat of analysts’ EBITDA estimates.
XPO delivered the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 25.8% since reporting. It currently trades at $151.28.
Werner (NASDAQ:WERN)
Conducting business in over a 100 countries, Werner (NASDAQ:WERN) offers full-truckload, less-than-truckload, and intermodal delivery services.Werner reported revenues of $745.7 million, down 8.8% year on year, falling short of analysts’ expectations by 2.6%. It was a disappointing quarter as it posted a significant miss of analysts’ adjusted operating income estimates.
Interestingly, the stock is up 3% since the results and currently trades at $39.42.
Schneider National (NYSE:SNDR)
Employing thousands of drivers across the country to make deliveries, Schneider (NYSE:SNDR) makes full truckload and intermodal deliveries regionally and across borders.Schneider National reported revenues of $1.32 billion, down 2.7% year on year. This result came in 1.1% below analysts' expectations. Overall, it was a disappointing quarter as it also produced full-year EPS guidance missing analysts’ expectations significantly.
The stock is up 8.3% since reporting and currently trades at $31.51.
Covenant Logistics (NASDAQ:CVLG)
Started with 25 trucks and 50 trailers, Covenant Logistics (NASDAQ:CVLG) is a provider of expedited long haul freight services, offering a range of logistics solutions.Covenant Logistics reported revenues of $287.9 million, flat year on year. This print came in 2.8% below analysts' expectations. Zooming out, it was a mixed quarter as it also produced an impressive beat of analysts’ EBITDA estimates but a miss of analysts’ Freight revenue estimates.
The stock is up 11.6% since reporting and currently trades at $57.48.
Market Update
As a result of the Fed's rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed's 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump's victory in the US Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain. Said differently, there's still much uncertainty around 2025.Want to invest in winners with rock-solid fundamentals? Check out our and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
This content was originally published on Stock Story
