Unpacking Q2 Earnings: Saia (NASDAQ:SAIA) In The Context Of Other Ground Transportation Stocks

Looking back on ground transportation stocks’ Q2 earnings, we examine this quarter’s best and worst performers, including Saia (NASDAQ:SAIA) 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 Q2. As a group, revenues missed analysts’ consensus estimates by 1%.

After much suspense, the Federal Reserve cut its policy rate by 50bps (half a percent) in September 2024. This marks the central bank’s first easing of monetary policy since 2020 and the end of its most pointed inflation-busting campaign since the 1980s. Inflation had begun to run hot in 2021 post-COVID due to a confluence of factors such as supply chain disruptions, labor shortages, and stimulus spending. While CPI (inflation) readings have been supportive lately, employment measures have prompted some concern. Going forward, the markets will debate whether this rate cut (and more potential ones in 2024 and 2025) is perfect timing to support the economy or a bit too late for a macro that has already cooled too much.

While some ground transportation stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 2.3% since the latest earnings results.

Saia (NASDAQ:SAIA)

After realizing that there was more success in delivering produce rather than selling it, Saia (NASDAQ:SAIA) makes less-than-truckload deliveries in the United States.

Saia reported revenues of $823.2 million, up 18.5% year on year. This print was in line with analysts’ expectations, but overall, it was a slower quarter for the company with a miss of analysts’ earnings estimates.

Saia President and CEO, Fritz Holzgrefe, commented on the quarter stating, “During the quarter, we successfully opened six new terminals and relocated two others in new and established markets, while maintaining our high service standards. Successfully opening and relocating terminals required investments in employee hiring, training and other costs that come in advance of opening and revenue generation. We are pleased to see the continued customer acceptance of these facilities, as well as the 23 other terminals opened in the last three years. We are excited about the opening of our new Stockton, California and Davenport, Iowa terminals earlier this week, and as we move through the rest of 2024, we plan to continue executing on our opening timeline, with the potential to open an additional 10 to 13 new terminals this year.”

Unsurprisingly, the stock is down 10.4% since reporting and currently trades at $436.81.

Is now the time to buy Saia? Access our full analysis of the earnings results here, it’s free.

Best Q2: 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 $274.8 million, down 10.3% year on year, in line with analysts’ expectations. The business had an exceptional quarter with an impressive beat of analysts’ earnings and operating margin estimates.

Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 7.2% since reporting. It currently trades at $11.56.

Is now the time to buy Heartland Express? Access our full analysis of the earnings results here, it’s free.

Weakest Q2: Hertz (NASDAQ:HTZ)

Started with a dozen Model T Fords, Hertz (NASDAQ:HTZ) is a global car rental company providing vehicle rental services to leisure and business travelers.

Hertz reported revenues of $2.35 billion, down 3.4% year on year, falling short of analysts’ expectations by 4.3%. It was a disappointing quarter as it posted a miss of analysts’ earnings estimates.

Hertz delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 19.3% since the results and currently trades at $3.30.

Read our full analysis of Hertz’s results here.

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 $930 million, down 3.4% year on year. This number was in line with analysts’ expectations. Overall, it was a very strong quarter as it also logged an impressive beat of analysts’ volume estimates.

The stock is down 7.6% since reporting and currently trades at $27.62.

Read our full, actionable report on RXO here, it’s free.

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 $287.5 million, up 4.9% year on year. This print came in 4% below analysts' expectations. Taking a step back, it was still a strong quarter as it produced an impressive beat of analysts’ Freight revenue revenue estimates.

The stock is up 2% since reporting and currently trades at $51.93.

Read our full, actionable report on Covenant Logistics here, it’s free.

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