As the Q1 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the ground transportation industry, including Old Dominion Freight Line (NASDAQ: ODFL) and its peers.
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 slower Q1. As a group, revenues missed analysts’ consensus estimates by 2.2%.
Luckily, ground transportation stocks have performed well with share prices up 15.4% on average since the latest earnings results.
Old Dominion Freight Line (NASDAQ: ODFL)
With its name deriving from the Commonwealth of Virginia’s nickname, Old Dominion (NASDAQ: ODFL) delivers less-than-truckload (LTL) and full-container load freight.
Old Dominion Freight Line reported revenues of $1.37 billion, down 5.8% year on year. This print was in line with analysts’ expectations, and overall, it was a strong quarter for the company with a solid beat of analysts’ adjusted operating income estimates.
Marty Freeman, President and Chief Executive Officer of Old Dominion, commented, “Old Dominion’s financial results for the first quarter reflect the ongoing softness in the domestic economy. While we were encouraged to see signs of improving demand during the first quarter, there continues to be uncertainty with the economy. We intend to continue to execute on the core elements of our long-term strategic plan, despite this uncertainty, and our team remains committed to delivering superior service at a fair price to our customers. This focus on delivering value has allowed us to strengthen our customer relationships and win market share over the long term.
Interestingly, the stock is up 6.5% since reporting and currently trades at $162.07.
Is now the time to buy Old Dominion Freight Line? Access our full analysis of the earnings results here, it’s free.
Best Q1: Schneider (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 reported revenues of $1.40 billion, up 6.3% year on year, in line with analysts’ expectations. The business had a very strong quarter with a solid beat of analysts’ EBITDA estimates.
The market seems happy with the results as the stock is up 16.7% since reporting. It currently trades at $25.07.
Is now the time to buy Schneider? Access our full analysis of the earnings results here, it’s free.
Weakest Q1: 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 $219.4 million, down 18.8% year on year, falling short of analysts’ expectations by 9%. It was a disappointing quarter as it posted a significant miss of analysts’ adjusted operating income estimates and a significant miss of analysts’ EBITDA estimates.
Interestingly, the stock is up 8.4% since the results and currently trades at $8.50.
Read our full analysis of Heartland Express’s results here.
Avis Budget Group (NASDAQ: CAR)
The parent company of brands such as Zipcar and Budget Truck Rental, Avis (NASDAQ: CAR) is a provider of car rental and mobility solutions.
Avis Budget Group reported revenues of $2.43 billion, down 4.7% year on year. This print lagged analysts' expectations by 2.9%. It was a slower quarter as it also recorded a significant miss of analysts’ adjusted operating income estimates.
The stock is up 91.9% since reporting and currently trades at $192.58.
Read our full, actionable report on Avis Budget Group here, it’s free.
RXO (NYSE: RXO)
With access to millions of trucks, RXO (NYSE: RXO) offers full-truckload, less-than-truckload, and last-mile deliveries.
RXO reported revenues of $1.43 billion, up 57% year on year. This number came in 3.5% below analysts' expectations. It was a slower quarter as it also produced a significant miss of analysts’ EPS estimates and a miss of analysts’ EBITDA estimates.
RXO pulled off the fastest revenue growth among its peers. The stock is up 17.7% since reporting and currently trades at $16.17.
Read our full, actionable report on RXO here, it’s free.
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 U.S. 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, leaving much uncertainty around 2025.
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