As the craze of earnings season draws to a close, here’s a look back at some of the most exciting (and some less so) results from Q3. Today, we are looking at ground transportation stocks, starting with Covenant Logistics (NASDAQ:CVLG).
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%.
In light of this news, share prices of the companies have held steady as they are up 2.9% on average since the latest earnings results.
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 fell short of analysts’ expectations by 2.8%. Overall, it was a mixed quarter for the company with an impressive beat of analysts’ EBITDA estimates but a miss of analysts’ Freight revenue estimates.
Interestingly, the stock is up 7.2% since reporting and currently trades at $27.61.
Is now the time to buy Covenant Logistics? Access our full analysis of the earnings results here, it’s free.
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 a solid beat of analysts’ EBITDA estimates.
XPO scored the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 14.4% since reporting. It currently trades at $137.58.
Is now the time to buy XPO? Access our full analysis of the earnings results here, it’s free.
Weakest Q3: 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.
As expected, the stock is down 4.8% since the results and currently trades at $36.42.
Read our full analysis of Werner’s results here.
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 print came in 1.1% below analysts' expectations. Overall, it was a disappointing quarter as it also produced full-year EPS guidance missing analysts’ expectations.
The stock is up 2.2% since reporting and currently trades at $29.72.
Read our full, actionable report on Schneider National here, it’s free.
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 result lagged analysts' expectations by 3.2%. It was a disappointing quarter as it also recorded a significant miss of analysts’ adjusted operating income estimates.
Heartland Express had the slowest revenue growth among its peers. The stock is down 1.2% since reporting and currently trades at $11.25.
Read our full, actionable report on Heartland Express here, it’s free.
Market Update
Thanks to the Fed's series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% each in November and December), and a notable surge followed Donald Trump's presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by the pace and magnitude of future rate cuts as well as potential changes in trade policy and corporate taxes once the Trump administration takes over. The path forward is marked by uncertainty.
Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Quality Compounder Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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