Earnings results often indicate what direction a company will take in the months ahead. With Q3 behind us, let’s have a look at XPO (NYSE: XPO) 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 14 ground transportation stocks we track reported a mixed Q3. As a group, revenues beat analysts’ consensus estimates by 0.7%.
While some ground transportation stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 2.1% since the latest earnings results.
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 $2.11 billion, up 2.8% year on year. This print exceeded analysts’ expectations by 1.9%. Overall, it was a strong quarter for the company with an impressive beat of analysts’ European Transportation revenue estimates and a solid beat of analysts’ revenue estimates.
Interestingly, the stock is up 11.7% since reporting and currently trades at $139.40.
Is now the time to buy XPO? Access our full analysis of the earnings results here, it’s free for active Edge members.
Best Q3: 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 $2.48 billion, down 3.8% year on year, outperforming analysts’ expectations by 3.1%. The business had a stunning quarter with a beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.
Hertz delivered the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 27.2% since reporting. It currently trades at $6.30.
Is now the time to buy Hertz? Access our full analysis of the earnings results here, it’s free for active Edge members.
Weakest Q3: U-Haul (NYSE: UHAL)
Founded by a husband and wife duo, U-Haul (NYSE: UHAL) is a provider of rental trucks and storage facilities.
U-Haul reported revenues of $1.72 billion, up 3.7% year on year, in line with analysts’ expectations. It was a disappointing quarter as it posted a significant miss of analysts’ EBITDA estimates and a significant miss of analysts’ EPS estimates.
As expected, the stock is down 1% since the results and currently trades at $52.89.
Read our full analysis of U-Haul’s results here.
Covenant Logistics (NYSE: 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 $296.9 million, up 3.1% year on year. This number was in line with analysts’ expectations. It was a strong quarter as it also recorded an impressive beat of analysts’ adjusted operating income estimates and a decent beat of analysts’ EBITDA estimates.
The stock is down 10.4% since reporting and currently trades at $19.57.
Read our full, actionable report on Covenant Logistics here, it’s free for active Edge members.
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 $3.52 billion, up 1.1% year on year. This result topped analysts’ expectations by 1.8%. Overall, it was a very strong quarter as it also logged a solid beat of analysts’ adjusted operating income estimates and an impressive beat of analysts’ EBITDA estimates.
The stock is down 7.5% since reporting and currently trades at $143.53.
Read our full, actionable report on Avis Budget Group here, it’s free for active Edge members.
Market Update
The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.
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