The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Hertz (NASDAQ:HTZ) and the rest of the ground transportation stocks fared in Q2.
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 satisfactory Q2. As a group, revenues were in line with analysts’ consensus estimates.
While some ground transportation stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 1.3% since the latest earnings results.
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 $2.19 billion, down 7.1% year on year. This print exceeded analysts’ expectations by 1.3%. Overall, it was a very strong quarter for the company with a solid beat of analysts’ sales volume estimates and an impressive beat of analysts’ EBITDA estimates.
“Our transformation is taking hold,” said Gil West, CEO of Hertz.
Interestingly, the stock is up 10.9% since reporting and currently trades at $6.19.
Is now the time to buy Hertz? Access our full analysis of the earnings results here, it’s free.
Best Q2: Werner (NASDAQ:WERN)
Conducting business in over a 100 countries, Werner (NASDAQ:WERN) offers full-truckload, less-than-truckload, and intermodal delivery services.
Werner reported revenues of $753.1 million, down 1% year on year, outperforming analysts’ expectations by 3%. The business had a stunning quarter with a beat of analysts’ EPS and adjusted operating income estimates.
The market seems content with the results as the stock is up 2.3% since reporting. It currently trades at $28.45.
Is now the time to buy Werner? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: 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 $210.4 million, down 23.4% year on year, falling short of analysts’ expectations by 10.4%. It was a disappointing quarter as it posted a significant miss of analysts’ adjusted operating income estimates and a significant miss of analysts’ EBITDA estimates.
Heartland Express delivered the weakest performance against analyst estimates and slowest revenue growth in the group. The stock is flat since the results and currently trades at $8.67.
Read our full analysis of Heartland Express’s results here.
RXO (NYSE:RXO)
With access to millions of trucks, RXO (NYSE:RXO) offers full-truckload, less-than-truckload, and last-mile deliveries.
RXO reported revenues of $1.42 billion, up 52.6% year on year. This number missed analysts’ expectations by 1%. In spite of that, it was an exceptional quarter as it recorded a solid beat of analysts’ sales volume estimates and a beat of analysts’ EPS estimates.
RXO pulled off the fastest revenue growth among its peers. The stock is up 11.1% since reporting and currently trades at $17.15.
Read our full, actionable report on RXO here, it’s free.
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 1.1% year on year. This print surpassed analysts’ expectations by 0.5%. Overall, it was a strong quarter as it also put up and a solid beat of analysts’ adjusted operating income estimates.
The stock is down 4% since reporting and currently trades at $132.43.
Read our full, actionable report on Landstar here, it’s free.
Market Update
As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.
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