Due to supply chain disruptions and rising input material costs, the trucking industry has been under operational headwinds. In addition, as oil prices climbed to 13 week-high recently, profit margins of trucking companies have been shrinking tremendously.
However, the rising need for logistics companies to automate operations and foster the flow of goods in an efficient manner could drive the industry’s growth. Moreover, trucking companies are taking active steps to optimize their warehouse logistics and transportation amid the continued global supply chain disruptions. Also, advanced technologies such as driverless vehicles, robotics, de-carbonization of transportation, autonomous control, and wearable computing are expected to drive the demand of the truck industry.
Trucking stocks, Schneider National, Inc. (SNDR), USA Truck, Inc. (USAK), ArcBest Corporation (ARCB), P.A.M. Transportation Services, Inc. (PTSI), and Daseke, Inc. (DSKE) are currently trading at a discount to their peers. Thus, these stocks could be ideal additions to your portfolio now.
Schneider National, Inc. (SNDR)
SNDR provides surface transportation and logistics solutions in the U.S., Canada, and Mexico. The company operates in three segments: Truckload; Intermodal; and Logistics. SNDR offers long-haul and regional shipping services, door-to-door container on flat car services, freight brokerage, and import/ export services.
On June 7, SNDR acquired Wisconsin-based carrier deBoer Transportation. With this acquisition, the company should be able to expand its business and boost earnings.
On April 6, the company marked its fifth year since the IPO as it significantly expanded its footprint and achieved meaningful progress over the years. With solid first-quarter results, its growth is only expected to drive SNDR forward.
SNDR’s operating revenue increased 32% year-over-year to $1.62 billion in the fiscal first quarter (ended March 31). The company’s income from operations increased 77% from the year-ago value to $135.10 million. Its adjusted net income grew 86% from the year-ago value to $102.10 million, while its EPS increased 84% from the year-ago value to $0.57.
SNDR is relatively undervalued compared to its peers. In terms of forward non-GAAP P/E, SNDR is currently trading at 8.56x, 46.9% lower than the industry average of 16.69x. Its forward EV/Sales multiple of 0.61 is 62.8% lower than the industry average of 1.65x.
The consensus EPS estimate of $0.68 for its fiscal second quarter (ending June 2022) represents a 13.5% improvement year-over-year. The consensus revenue estimate of $1.66 billion for the current quarter indicates a 22.2% increase from the same period last year. The company has an excellent earnings surprise history; it surpassed the consensus EPS estimates in each of the trailing four quarters. Over the past nine months, the stock has gained 4.9% to close its last trading day at $23.36.
SNDR’s POWR Ratings reflect this promising outlook. The company has an overall B rating, which translates to Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting.
It has a B grade for Value and Momentum. Among the 22 stocks in the A-rated Trucking Freight industry, it is ranked #7. Click here to see the POWR ratings of SNDR for Growth, Stability, Sentiment, and Quality.
USA Truck, Inc. (USAK)
USAK provides comprehensive capacity solutions to a broad and diverse customer base throughout North America. The company operates in two segments: Trucking; and USAT Logistics. Its Trucking segment offers motor carrier services and freight services, while the USAT Logistics segment provides freight brokerage, logistics, and intermodal rail services.
On May 11, USAK was named National Truckload Carrier of the Year at Transplace’s 2022 Carrier Symposium. This reflects the company’s excellent customer experience to Transplace.
In the fiscal 2022 first quarter (ended March 31, 2022), USAK’s operating revenues increased 26.8% year-over-year to $201.06 million. Its operating income increased 19.6% from the year-ago value to $182.38 million, while its net income grew 264.5% year-over-year to $13.11 million. The company’s EPS came in at $1.45, representing a 262.5% year-over-year improvement.
USAK is trading at a discount to its peers. The stock’s forward non-GAAP P/E multiple of 3.55 is 78.8% lower than the industry average of 16.69. In addition, USAK’s forward EV/EBIT and EV/EBITDA ratios of 4.53 and 3.98 are significantly lower than the industry averages of 14.65 and 12.63, respectively.
Analysts expect USAK’s EPS and revenue to increase 132% and 26.9% year-over-year to $1.16 and $215.70 million, respectively, in the fiscal second quarter (ending June 2022). USAK has surpassed the consensus EPS estimates in each of the trailing four quarters, which is impressive. USAK has gained 15.4% over the past nine months.
USAK’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of A, which equates to a Strong Buy in our POWR Ratings system. USAK also has an A grade for Growth, Value, and a B grade for Momentum and Sentiment. The stock is ranked #2 of 22 stocks in the same industry. Click here to see the ratings of USAK for Stability and Quality.
ArcBest Corporation (ARCB)
ARCB is a freight transportation and logistics company. The company operates through three segments: Asset-Based; ArcBest; and FleetNet. ARCB provides transportation services for general commodities, motor carrier transportation services to customers in Mexico, and expedited freight transportation services to commercial and government customers.
On May 18, the company announced that five of its ABF Freight service centers received the President’s Quality Award. In the same month, ARCB’s LTL carrier was also recognized with Excellence in Cargo Claims and Loss Prevention Award by ATA for the ninth time. Such recognition reflects the company’s outstanding performance in the industry.
On April 28, ARCB’s Board of Directors increased the company’s quarterly cash dividend by 50% to $0.12 per share and also increased its share repurchase program to $75 million. This reflects the company’s strong cash flows and should accelerate shareholders' returns.
ARCB’s net revenues increased 61% year-over-year to $1.34 billion in the first quarter ended March 31, 2022. The company’s operating income increased 194.9% from the year-ago value to $94.93 million, while its net income grew 197.8% year-over-year to $69.57 billion. ARCB’s EPS rose 208% from the prior-year quarter to $2.68.
ARCB is relatively undervalued compared to its peers. The stock’s forward Price/Sales multiple of 0.36 is 73.9% lower than the industry average of 1.36. In addition, its forward EV/EBITDA ratio of 3.67 is 65.1% lower than the industry average of 10.53.
For the fiscal second quarter (ending June 2022), ARCB’s revenue is expected to increase 44% year-over-year to $1.37 billion, respectively. Its EPS is expected to increase 99% to $3.92 in the ongoing quarter. The stock surpassed the consensus EPS estimates in each of the trailing four quarters, which is excellent. ARCB has gained 28.8% over the past year to close yesterday’s trading session at $78.61.
The company has an overall rating of B, which translates to Buy in our proprietary rating system. It is no surprise that ARCB has an A grade for Growth and a B grade for Value and Momentum. In the same A-rated industry, it is ranked #4 of 22 stocks.
Beyond what we’ve stated above, we have also given ARCB grades for Stability, Sentiment, and Quality. Get all the ARCB ratings here.
P.A.M. Transportation Services, Inc. (PTSI)
PTSI is a truckload transportation and logistics company. It operates as a truckload dry van carrier, transporting general commodities, including automotive parts; expedited goods; consumer goods; and manufactured goods. Its operations are classified into truckload services or brokerage and logistics services.
During the fiscal first quarter (ended March 31, 2022), PTSI’s total revenue increased 47.4% year-over-year to $219.45 million. Its operating income rose 129.6% from the year-ago value to $31.34 million. Net income grew 121.5% from the same period last year to $23.47 million, while its non-GAAP EPS came in at $1.18, representing a 126.9% increase year-over-year.
PTSI is relatively undervalued compared to its peers. In terms of forward non-GAAP P/E, PTSI is currently trading at 6.31x, 62.2% lower than the industry average of 16.69x. Its forward Price/Sales multiple of 0.71 is 47.9% lower than the industry average of 1.36x.
Analysts expect PTSI’s revenues to increase 26.1% year-over-year to $891.30 million in fiscal 2022 (ending December 2022). Its EPS is expected to increase 27.7% year-over-year to $4.50 in the current year. Over the past year, the stock has gained 102.8% to close the last trading session at $28.69.
PTSI’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of A, which equates to a Strong Buy in our POWR Ratings system. PTSI also has an A grade for Sentiment and a B grade for Growth, Value, Momentum, and Quality. The stock is ranked #1 of 22 stocks in the A-rated Trucking Freight industry. Click here to see the ratings of PTSI for Stability.
Daseke, Inc. (DSKE)
DSKE provides transportation and logistics solutions focused on flatbed and specialized freight in the United States, Canada, and Mexico. The Company operates through two segments: Flatbed Solutions and Specialized Solutions. It also provides logistical planning and warehousing services to customers and operates a fleet of more than 4,500 tractors and 11,000 flatbed and specialized trailers.
In the first quarter ended March 31, 2022, DSKE’s total revenue increased 26.1% year-over-year to $421 billion. Its net income improved 278.1% from the year-ago value to $13 million, while its EPS came in at $0.18, representing a 238.5% year-over-year improvement.
DSKE is trading at a discount to its peers. The stock’s forward EV/Sales multiple of 0.65 is 60.3% lower than the industry average of 1.65. In addition, DSKE’s forward EV/EBIT and EV/EBITDA ratios of 8.50 and 4.52 are significantly lower than the industry averages of 14.65 and 10.53, respectively.
The consensus EPS estimate of $0.36 for the fiscal third quarter (ending September 2022) represents a 20% improvement year-over-year. The consensus revenue estimate of $428.09 million for the present quarter represents a marginal increase from the same period last year. DSKE surpassed the EPS estimates in three of the trailing four quarters, which is impressive. Over the past year, the stock has gained marginally, closing yesterday’s trading session at $7.64.
DSKE has an overall B rating, which translates to Buy in our proprietary rating system. It also has a B grade for Value and Momentum. The stock is ranked #5 of 22 stocks in the same industry. To see the other ratings of DSKE for Growth, Stability, Sentiment, and Quality, click here.
SNDR shares closed at $23.15 on Friday, down $-0.21 (-0.90%). Year-to-date, SNDR has declined -13.41%, versus a -17.67% rise in the benchmark S&P 500 index during the same period.
About the Author: Shweta Kumari
Shweta's profound interest in financial research and quantitative analysis led her to pursue a career as an investment analyst. She uses her knowledge to help retail investors make educated investment decisions.
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