Let’s dig into the relative performance of Heartland Express (NASDAQ: HTLD) and its peers as we unravel the now-completed Q4 ground transportation earnings season.
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 Q4. As a group, revenues were in line with analysts’ consensus estimates.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 24.4% 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 $242.6 million, down 11.9% year on year. This print fell short of analysts’ expectations by 3.1%, but it was still a strong quarter for the company with a solid beat of analysts’ EPS estimates and an impressive beat 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 fourth quarter reflected both sequential and year-over year operating improvement due to a combination of continued progress with acquisition integration, enterprise-wide cost controls, and a modestly better freight environment. While it is early in the quarter and extreme winter weather conditions so far in 2025 make comparison difficult, we are seeing a positive shift in customer rate and volume negotiations that we expect to strengthen as the year unfolds. Additionally, we generated a 15.6% operating cash flow margin (cash flow from operations as a percentage of operating revenue) for the quarter and paid down $100.3 million of debt during the year."
Heartland Express delivered the slowest revenue growth of the whole group. Unsurprisingly, the stock is down 27.7% since reporting and currently trades at $8.55.
Is now the time to buy Heartland Express? Access our full analysis of the earnings results here, it’s free.
Best Q4: 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 $1.92 billion, flat year on year, in line with analysts’ expectations. The business had an exceptional quarter with an impressive beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.
Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 29.6% since reporting. It currently trades at $96.01.
Is now the time to buy XPO? Access our full analysis of the earnings results here, it’s free.
Weakest Q4: 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 $2.71 billion, down 2% year on year, falling short of analysts’ expectations by 1%. It was a disappointing quarter as it posted a significant miss of analysts’ adjusted operating income estimates.
As expected, the stock is down 21% since the results and currently trades at $70.87.
Read our full analysis of Avis Budget Group’s results here.
ArcBest (NASDAQ: ARCB)
Historically owning furniture, banking, and other subsidiaries, ArcBest (NASDAQ: ARCB) offers full-truckload, less-than-truckload, and intermodal deliveries of freight.
ArcBest reported revenues of $1.00 billion, down 8.1% year on year. This print was in line with analysts’ expectations. It was a very strong quarter as it also recorded an impressive beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.
The stock is down 32.8% since reporting and currently trades at $63.41.
Read our full, actionable report on ArcBest here, it’s free.
Ryder (NYSE: R)
As one of the first companies to introduce the idea of leasing trucks, Ryder (NYSE: R) provides rental vehicles to businesses and delivers packages directly to homes or businesses.
Ryder reported revenues of $3.19 billion, up 5.5% year on year. This result lagged analysts' expectations by 1.5%. Overall, it was a slower quarter as it also logged a significant miss of analysts’ EBITDA estimates and EPS guidance for next quarter missing analysts’ expectations.
The stock is down 13% since reporting and currently trades at $137.64.
Read our full, actionable report on Ryder here, it’s free.
Market Update
In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.
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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