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Here's Why You Should Give Knight-Swift (KNX) a Miss Now
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Knight-Swift Transportation Holdings Inc. (KNX - Free Report) is mired in multiple headwinds, which, we believe, have made it an unimpressive investment option.
Let’s delve deeper.
Southward Earnings Estimate Revision: The Zacks Consensus Estimate for second-quarter 2024 earnings has been revised 47.2% downward over the past 90 days. For 2024, the consensus mark for earnings has moved 48.1% south in the same time frame. The bearish alterations in estimate revisions underscore a notable decline in brokers' confidence in the stock.
Weak Zacks Rank: Knight-Swift currently carries a Zacks Rank #4 (Sell).
Unimpressive Price Performance: Shares of KNX have lost 13.2% so far this year compared with the industry’s decline of 8.5%.
Image Source: Zacks Investment Research
Earnings Expectations: Downbeat earnings expectations cast a shadow over a company’s prospects. For second-quarter 2024, KNX’s earnings are expected to decline 42.86% year over year. For 2024, KNX’s earnings are expected to decline 26.74% year over year.
Negative Earnings Surprise History: KNX has a disappointing earnings surprise history. The company’s earnings lagged the Zacks Consensus Estimate in three of the last four quarters (outpaced the mark in the remaining quarter), delivering an average miss of 30.87%.
Other Headwinds: High costs related to driver wages, equipment, maintenance, fuel and other expenses are restricting Knight-Swift’s bottom-line growth. In the first quarter of 2024, salaries, wages and benefits expenses rose 29% year over year, while operations and maintenance expenses climbed 35.5%. Escalating fuel costs are flaring up the operating costs. Total operating expenses increased 20.8% year over year to $1.80 billion in first-quarter 2024. KNX expects net cash capital expenditures for 2024 in the $625-$675 million band.
Knight-Swift exited the first quarter of 2024 with cash and cash equivalents of $204.76 million, which is lower than its long-term debt (excluding current maturities) of $1.19 billion. This implies that the company does not have enough cash to meet its debt obligations.
SKYW flaunts a VGM Score of A and has a market capitalization of $3.28 billion. The Zacks Consensus Estimate for SKYW’s 2024 earnings per share has moved up 6.9% in the past 90 days. Shares of SKYW have surged 58.5% year to date.
SKYW’s expected growth rate for 2024 is more than 100%. SKYW has a trailing four-quarter earnings surprise of 128.09%, on average.
TRN raised 2024 earnings per share guidance to the range of $1.35 to $1.55 (which excludes items outside of the company’s core business operations) from $1.30 to $1.50 guided previously. Shares of TRN have gained 10.7% year to date.
Over the past 30 days, the Zacks Consensus Estimate for TRN’s 2024 earnings has been revised 2.7% upward. For 2024, TRN’s earnings are expected to grow 8.70% year over year.
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Here's Why You Should Give Knight-Swift (KNX) a Miss Now
Knight-Swift Transportation Holdings Inc. (KNX - Free Report) is mired in multiple headwinds, which, we believe, have made it an unimpressive investment option.
Let’s delve deeper.
Southward Earnings Estimate Revision: The Zacks Consensus Estimate for second-quarter 2024 earnings has been revised 47.2% downward over the past 90 days. For 2024, the consensus mark for earnings has moved 48.1% south in the same time frame. The bearish alterations in estimate revisions underscore a notable decline in brokers' confidence in the stock.
Weak Zacks Rank: Knight-Swift currently carries a Zacks Rank #4 (Sell).
Unimpressive Price Performance: Shares of KNX have lost 13.2% so far this year compared with the industry’s decline of 8.5%.
Image Source: Zacks Investment Research
Earnings Expectations: Downbeat earnings expectations cast a shadow over a company’s prospects. For second-quarter 2024, KNX’s earnings are expected to decline 42.86% year over year. For 2024, KNX’s earnings are expected to decline 26.74% year over year.
Negative Earnings Surprise History: KNX has a disappointing earnings surprise history. The company’s earnings lagged the Zacks Consensus Estimate in three of the last four quarters (outpaced the mark in the remaining quarter), delivering an average miss of 30.87%.
Other Headwinds: High costs related to driver wages, equipment, maintenance, fuel and other expenses are restricting Knight-Swift’s bottom-line growth. In the first quarter of 2024, salaries, wages and benefits expenses rose 29% year over year, while operations and maintenance expenses climbed 35.5%. Escalating fuel costs are flaring up the operating costs. Total operating expenses increased 20.8% year over year to $1.80 billion in first-quarter 2024. KNX expects net cash capital expenditures for 2024 in the $625-$675 million band.
Knight-Swift exited the first quarter of 2024 with cash and cash equivalents of $204.76 million, which is lower than its long-term debt (excluding current maturities) of $1.19 billion. This implies that the company does not have enough cash to meet its debt obligations.
Stocks to Consider
Some better-ranked stocks for investors’ consideration in the Zacks Transportation sector include SkyWest, Inc. (SKYW - Free Report) and Trinity Industries, Inc. (TRN - Free Report) . Each stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
SKYW flaunts a VGM Score of A and has a market capitalization of $3.28 billion. The Zacks Consensus Estimate for SKYW’s 2024 earnings per share has moved up 6.9% in the past 90 days. Shares of SKYW have surged 58.5% year to date.
SKYW’s expected growth rate for 2024 is more than 100%. SKYW has a trailing four-quarter earnings surprise of 128.09%, on average.
TRN raised 2024 earnings per share guidance to the range of $1.35 to $1.55 (which excludes items outside of the company’s core business operations) from $1.30 to $1.50 guided previously. Shares of TRN have gained 10.7% year to date.
Over the past 30 days, the Zacks Consensus Estimate for TRN’s 2024 earnings has been revised 2.7% upward. For 2024, TRN’s earnings are expected to grow 8.70% year over year.