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KnightSwift Down 49.5% YTD: What's Hurting the Stock?
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KnightSwift Transportation (KNX - Free Report) shares have declined 49.5% on a year-to-date basis compared to the industry’s 5.9% fall. The S&P 500 composite index rose 17.9% in the same time frame, while the Zacks Transportation sector gained 1.8%. This North America’s largest and most diversified freight transportation company currently has a market capitalization of $8.35 billion.
KNX presently carries a Zacks Rank #3 (Hold). The company has a disappointing track record of missing estimates in three of the trailing four quarters, the average miss being 30.9%.
YTD Price Performance
Image Source: Zacks Investment Research
Factors Impeding KNX's Growth
The Zacks Consensus Estimate for KNX’s 2024 earnings is pegged at $1.12 per share, which indicates a decline of 35% from 2023’s actuals. The same for revenues stands at $7.61 billion, which implies a 3.5% decrease from the prior year's actual.
The consensus mark for current-quarter earnings is pegged at 35 cents per share, indicating a 14.6% decline year over year. The same for revenues stands at $1.95 billion, which suggests a fall of 3.5% year over year. Weakness in freight demand is hurting revenues. High costs related to driver wages, equipment, maintenance, fuel and other expenses are hurting the bottom line.
KNX’s liquidity position is discouraging. The airline ended the second quarter of 2024 with cash and cash equivalents of $336 million and a current ratio (a measure of liquidity) of 0.88. A current ratio of less than 1 implies that the company does not have sufficient cash to meet its current debt obligations. The company’s times interest earned ratio of 1.5 compares unfavorably with the industry’s ratio of 9.
Some Tailwinds to Consider for KNX Stock
KnightSwift posted a significant year-over-year increase of 18.9% in revenues in the second quarter of 2024 . The increase in the top line was driven by the acquisition of U.S. Xpress Enterprises, Inc. (U.S. Xpress), effective July 1, 2023. Revenues, excluding truckload and LTL fuel surcharge, grew 18.1% year over year to $ 1.64 billion.
The Less-Than-Truckload segment generated revenues (excluding fuel surcharges) worth $263.09 million in the second quarter of 2024, up 15.1% year over year.
While Knight-Swift has areas of strength, the projected declines in earnings and revenues, combined with liquidity concerns, suggest that the company may face challenges in retaining its momentum.
Stocks to Consider
Some better-ranked stocks for investors’ consideration in the Zacks Transportation sector include C.H. Robinson Worldwide (CHRW - Free Report) and ZIM Integrated Shipping Services (ZIM - Free Report) .
The company has an impressive earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in three of the trailing four quarters and missed once, delivering an average surprise of 7.3%. Shares of CHRW have risen 9.8% in the past year.
ZIM also sports a Zacks Rank #1 at present and has an expected earnings growth rate of 257.2% for the current year.
Shares of ZIM have climbed 63.8% in the past year.
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KnightSwift Down 49.5% YTD: What's Hurting the Stock?
KnightSwift Transportation (KNX - Free Report) shares have declined 49.5% on a year-to-date basis compared to the industry’s 5.9% fall. The S&P 500 composite index rose 17.9% in the same time frame, while the Zacks Transportation sector gained 1.8%. This North America’s largest and most diversified freight transportation company currently has a market capitalization of $8.35 billion.
KNX presently carries a Zacks Rank #3 (Hold). The company has a disappointing track record of missing estimates in three of the trailing four quarters, the average miss being 30.9%.
YTD Price Performance
Image Source: Zacks Investment Research
Factors Impeding KNX's Growth
The Zacks Consensus Estimate for KNX’s 2024 earnings is pegged at $1.12 per share, which indicates a decline of 35% from 2023’s actuals. The same for revenues stands at $7.61 billion, which implies a 3.5% decrease from the prior year's actual.
The consensus mark for current-quarter earnings is pegged at 35 cents per share, indicating a 14.6% decline year over year. The same for revenues stands at $1.95 billion, which suggests a fall of 3.5% year over year. Weakness in freight demand is hurting revenues. High costs related to driver wages, equipment, maintenance, fuel and other expenses are hurting the bottom line.
KNX’s liquidity position is discouraging. The airline ended the second quarter of 2024 with cash and cash equivalents of $336 million and a current ratio (a measure of liquidity) of 0.88. A current ratio of less than 1 implies that the company does not have sufficient cash to meet its current debt obligations. The company’s times interest earned ratio of 1.5 compares unfavorably with the industry’s ratio of 9.
Some Tailwinds to Consider for KNX Stock
KnightSwift posted a significant year-over-year increase of 18.9% in revenues in the second quarter of 2024 . The increase in the top line was driven by the acquisition of U.S. Xpress Enterprises, Inc. (U.S. Xpress), effective July 1, 2023. Revenues, excluding truckload and LTL fuel surcharge, grew 18.1% year over year to $ 1.64 billion.
The Less-Than-Truckload segment generated revenues (excluding fuel surcharges) worth $263.09 million in the second quarter of 2024, up 15.1% year over year.
While Knight-Swift has areas of strength, the projected declines in earnings and revenues, combined with liquidity concerns, suggest that the company may face challenges in retaining its momentum.
Stocks to Consider
Some better-ranked stocks for investors’ consideration in the Zacks Transportation sector include C.H. Robinson Worldwide (CHRW - Free Report) and ZIM Integrated Shipping Services (ZIM - Free Report) .
C.H. Robinson Worldwide currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. CHRW has an expected earnings growth rate of 25.2% for the current year.
The company has an impressive earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in three of the trailing four quarters and missed once, delivering an average surprise of 7.3%. Shares of CHRW have risen 9.8% in the past year.
ZIM also sports a Zacks Rank #1 at present and has an expected earnings growth rate of 257.2% for the current year.
Shares of ZIM have climbed 63.8% in the past year.