Ground Transportation Stocks Q3 Highlights: Avis Budget Group (NASDAQ:CAR)

November 22, 2024 at 03:39 AM EST

CAR Cover Image

As the Q3 earnings season wraps, let’s dig into this quarter’s best and worst performers in the ground transportation industry, including Avis Budget Group (NASDAQ: CAR) 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 softer Q3. As a group, revenues missed analysts’ consensus estimates by 1.9%.

Thankfully, share prices of the companies have been resilient as they are up 8.6% on average since the latest earnings results.

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 $3.48 billion, down 2.4% year on year. This print fell short of analysts’ expectations by 1.5%. Overall, it was a disappointing quarter for the company with a significant miss of analysts’ adjusted operating income and earnings estimates.

“We maintained a strong focus on pricing throughout the quarter, prioritizing higher margin business which allowed us to keep our revenue per day stable with the Americas nearly flat,” said Joe Ferraro, Avis Budget Group Chief Executive Officer.

Interestingly, the stock is up 22.6% since reporting and currently trades at $101.64.

Read our full report on Avis Budget Group 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 an impressive beat of analysts’ EBITDA estimates.

XPO achieved the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 23.9% since reporting. It currently trades at $149.

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

Weakest Q3: 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, falling short of analysts’ expectations by 3.2%. It was a disappointing quarter as it posted a significant miss of analysts’ adjusted operating income estimates.

Heartland Express delivered the slowest revenue growth in the group. Interestingly, the stock is up 6.3% since the results and currently trades at $12.10.

Read our full analysis of Heartland Express’s results here.

Landstar (NASDAQ: LSTR)

Covering billions of miles throughout North America, Landstar (NASDAQ: LSTR) is a transportation company specializing in freight and last-mile delivery services.

Landstar reported revenues of $1.22 billion, down 5.8% year on year. This print was in line with analysts’ expectations. Taking a step back, it was a softer quarter as it recorded a miss of analysts’ revenue and earnings estimates.

The stock is flat since reporting and currently trades at $179.45.

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

Universal Logistics (NASDAQ: ULH)

Founded in 1932, Universal Logistics (NASDAQ: ULH) is a provider of customized transportation and logistics solutions operating throughout the United States and in Mexico, Canada, and Colombia.

Universal Logistics reported revenues of $426.8 million, up 1.3% year on year. This number lagged analysts' expectations by 8%. All in all, it was a slower quarter for the company.

Universal Logistics had the weakest performance against analyst estimates among its peers. The stock is up 13.2% since reporting and currently trades at $49.14.

Read our full, actionable report on Universal Logistics 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 has thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% in November), 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 potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. The path forward holds both optimism and caution as new policies take shape.

Want to invest in winners with rock-solid fundamentals? Check out our Hidden Gem Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

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