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Arcbest (ARCB)
:ARCB
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ArcBest
(NASDAQ:ARCB)
Rating:73Outperform
Price Target:
$70.00
▲( 12.81% Upside)
Positive Factors
Pricing Strategy
Contract renewals in the quarter grew to 4.9% from 4.5% last quarter, indicating management noted continued rational pricing.
Revenue per Hundredweight
Revenue per hundredweight increased by 8%, which was a bright spot despite other metrics falling below expectations.
Negative Factors
Earnings Performance
ArcBest posted adjusted EPS down 62% from a year ago, below analyst expectations.
Industrial Economy
Ongoing softness in the industrial economy and reduction in heavier-weight LTL shipments are concerns.
Market Pressures
The asset-light segment posted a revenue decline, facing ongoing market pressures.
ArcBest (ARCB) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.42B
Dividend Yield0.76%
Average Volume (3M)417.17K
Price to Earnings (P/E)8.2
Beta (1Y)1.45
Revenue Growth-5.69%
EPS Growth51.78%
CountryUS
Employees14,000
SectorIndustrials
Sector Strength90
IndustryTrucking
Share Statistics
EPS (TTM)0.51
Shares Outstanding22,911,352
10 Day Avg. Volume426,511
30 Day Avg. Volume417,172
Financial Highlights & Ratios
PEG Ratio2.27
Price to Book (P/B)1.11
Price to Sales (P/S)0.00
P/FCF Ratio23.45
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$81.50Price Target Upside31.35% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering11
ArcBest Business Overview & Revenue Model
Company DescriptionArcBest Corporation provides freight transportation and integrated logistics services. It operates through three segments: Asset-Based, ArcBest, and FleetNet. The Asset-Based segment transports general commodities, such as food, textiles, apparel, furniture, appliances, chemicals, nonbulk petroleum products, rubber, plastics, metal and metal products, wood, glass, automotive parts, machinery, and miscellaneous manufactured products through less-than-truckload services. It also offers motor carrier freight transportation services to customers in Mexico through arrangements with trucking companies. The ArcBest segment provides expedite freight transportation services to commercial and government customers; premium logistics services, such as deployment of specialized equipment to meet linehaul requirements; and international freight transportation with air, ocean, and ground services. It also offers third-party transportation brokerage services by sourcing various capacity solutions, including dry van over the road and intermodal, temperature-controlled and refrigerated, flatbed, intermodal or container shipping, and specialized equipment; full-container and less-than-container load ocean transportation services; warehousing and distribution services; managed transportation services; and moving services to 'do-it-yourself' consumer, as well as provides final mile, time critical, product launch, warehousing, retail logistics, supply chain optimization, and trade show shipping services. The FleetNet segment provides roadside repair solutions and vehicle maintenance management services for commercial and private fleets through a network of third-party service providers. The company was formerly known as Arkansas Best Corporation and changed its name to ArcBest Corporation in May 2014. ArcBest Corporation was founded in 1923 and is headquartered in Fort Smith, Arkansas.
How the Company Makes MoneyArcBest makes money through a diversified revenue model primarily driven by its core logistics and transportation services. The company's key revenue streams include less-than-truckload (LTL) freight services, where it generates income by transporting smaller shipments that do not require a full truckload. Additionally, ArcBest earns revenue from its truckload brokerage services, facilitating the movement of full truckloads by connecting shippers with carriers. Managed transportation and supply chain optimization services provide another significant revenue stream, offering end-to-end logistics solutions and strategic planning to improve supply chain efficiency for clients. ArcBest's earnings are further supported by strategic partnerships and a strong network of carriers, enabling the company to offer competitive and reliable services in the logistics market.
ArcBest Financial Statement Overview
Summary
ArcBest's financial statements indicate a stable position with effective cost management and strong equity backing. Income statement shows moderate profitability with room for improvement. Balance sheet reflects financial stability with prudent leverage. Cash flow statements highlight stable cash generation, though opportunities for improvement exist.Income Statement
ArcBest's income statement shows a solid gross profit margin of 30.2% in TTM (Trailing-Twelve-Months), indicating effective cost management. However, the net profit margin of 4.4% suggests room for improvement in profitability. The revenue growth has been volatile, with a 6.3% decline from 2022 to 2023, but recent trends suggest stabilization. The EBIT margin of 5.7% and EBITDA margin of 8.5% point to moderate operating efficiency.75
Positive
Balance Sheet
The balance sheet reflects a strong equity position with an equity ratio of 53.8%, indicating financial stability. The debt-to-equity ratio is 0.24, showcasing prudent leverage. Return on equity stands at 13.9%, which is healthy but could be enhanced. Overall, the balance sheet demonstrates sound financial management with a low risk of over-leverage.80
Positive
Cash Flow
Cash flow statements reveal a robust operating cash flow to net income ratio of 1.43 in TTM, highlighting efficient cash conversion. However, free cash flow growth has been inconsistent, reflected in a modest free cash flow to net income ratio of 0.34. The company's ability to generate cash remains stable, but opportunities for improving free cash flow exist.70
Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 4.11B | 4.18B | 4.43B | 5.32B | 3.98B | 2.94B | Gross Profit |
| 281.41M | 350.00M | 378.43M | 578.59M | 639.28M | 228.13M | EBIT |
| 232.39M | 244.43M | 172.62M | 399.27M | 280.99M | 98.28M | EBITDA |
| 349.03M | 376.78M | 341.36M | 534.19M | 410.28M | 222.58M | Net Income Common Stockholders |
| 179.40M | 173.96M | 142.16M | 298.21M | 213.52M | 71.10M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 98.67M | 157.20M | 330.07M | 326.03M | 124.96M | 369.36M | Total Assets |
| 2.41B | 2.43B | 2.49B | 2.49B | 2.11B | 1.78B | Total Debt |
| 315.38M | 413.48M | 437.73M | 438.68M | 337.11M | 403.55M | Net Debt |
| 241.26M | 286.03M | 175.50M | 280.30M | 260.49M | 99.59M | Total Liabilities |
| 1.11B | 1.12B | 1.24B | 1.34B | 1.18B | 950.41M | Stockholders Equity |
| 1.29B | 1.31B | 1.24B | 1.15B | 929.07M | 828.59M |
| Cash Flow | Free Cash Flow | ||||
| 61.22M | 45.85M | 90.17M | 305.31M | 245.04M | 148.50M | Operating Cash Flow |
| 257.06M | 285.85M | 322.17M | 470.82M | 323.51M | 205.99M | Investing Cash Flow |
| -139.42M | -187.28M | -21.70M | -261.08M | -303.20M | 7.46M | Financing Cash Flow |
| -216.37M | -233.35M | -196.61M | -127.98M | -247.65M | -111.41M |
ArcBest Technical Analysis
Negative
62.05
Price Trends
65.57
Negative
77.98
Negative
91.94
Negative
Market Momentum
0.13
Negative
45.04
Neutral
25.77
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ARCB, the sentiment is Negative. The current price of 62.05 is below the 20-day moving average (MA) of 62.85, below the 50-day MA of 65.57, and below the 200-day MA of 91.94, indicating a bearish trend. The MACD of 0.13 indicates Negative momentum. The RSI at 45.04 is Neutral, neither overbought nor oversold. The STOCH value of 25.77 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ARCB.
ArcBest Risk Analysis
ArcBest disclosed 30 risk factors in its most recent earnings report. ArcBest reported the most risks in the “Production” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 1 New Risks
1.
Ineffective internal controls could negatively impact our business, results of operations, and reputation. Q4, 2024
ArcBest Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $1.42B | 8.20 | 14.25% | 0.76% | -5.69% | 51.78% | |
67 Neutral | $663.60M | 7.96 | 13.57% | 1.74% | 1.16% | -30.78% | |
65 Neutral | $4.12B | 33.23 | 4.20% | 1.62% | -0.30% | -20.76% | |
64 Neutral | $4.39B | 11.81 | 5.17% | 249.38% | 3.98% | -12.17% | |
63 Neutral | $1.06B | 48.96 | 2.83% | 1.83% | -13.47% | -62.49% | |
53 Neutral | $705.41M | ― | -3.44% | 0.91% | -13.10% | -121.50% | |
50 Neutral | $1.68B | 95.40 | 1.21% | 2.13% | -7.66% | -78.26% |
* Industrials Sector Average
Performance Comparison
ARCB
ArcBest
62.05
-43.15
-41.02%
HTLD
Heartland Express
8.80
-2.45
-21.78%
MRTN
Marten Transport
12.99
-4.36
-25.13%
WERN
Werner Enterprises
26.16
-10.29
-28.23%
ULH
Universal Logistics
23.56
-20.38
-46.38%
SNDR
Schneider National
23.53
1.70
7.79%
ArcBest Earnings Call Summary
Earnings Call Date:Apr 29, 2025
(Q1-2025)
| % Change Since: 5.19%|
Next Earnings Date:Jul 30, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed outlook. While there were significant advancements in operational efficiency and innovative technology deployments, revenue and operating income faced declines due to industrial weakness and market challenges. The company's proactive strategies in service enhancements and managed solutions are promising, but the current economic environment poses substantial challenges.Q1-2025 Updates
Positive Updates
Operational Efficiency Improvements
ArcBest achieved a 31% improvement in the speed of deal execution and a 50% increase in revenue per shipment levels for dynamic business since 2020.
Innovative Technology Deployment
Introduction of Voxx Vision, a 3D perception technology that transforms forklifts into intelligent mobile dimensioners, expected to enhance transparency and compliance in freight handling workflows.
Service and Efficiency Enhancements
City route optimization reduced planning hours significantly, achieving $6 million in savings during the first quarter.
Managed Solution Growth
ArcBest's managed transportation solution achieved double-digit growth and all-time quarterly highs for both shipments and revenue.
Negative Updates
Revenue Decline
Consolidated revenue decreased by 7% from last year's first quarter to $967 million, with a significant drop in operating income.
Industrial Weakness Impact
A 4% decrease in tons per day due to industrial weakness and fewer household goods moves attributed to higher interest rates and low housing inventory.
Asset-Based Segment Challenges
The asset-based segment saw a $27 million decrease in operating income, with an operating ratio increase of 390 basis points year-over-year.
Tariff and Trade Policy Challenges
Uncertainty around US tariffs and trade policies causing disruptions and requiring adjustments in customer operations.
Company Guidance
During the ArcBest First Quarter 2025 Earnings Conference Call, the company provided several key metrics and insights into their financial and operational performance. Consolidated revenue for the first quarter decreased by 7% year-over-year to $967 million. The asset-based segment reported a $27 million decline in operating income, while the asset-light segment improved its non-GAAP operating loss by $4 million compared to the prior year. Adjusted earnings per share were 51¢, down from $1.34 in the first quarter of 2024. The asset-based business saw a 95.9% operating ratio, which increased by 390 basis points from the previous year. Despite a 4% decrease in daily shipments and a 4% reduction in weight per shipment, ArcBest achieved a 4% year-over-year increase in daily shipments in April 2025. Revenue per hundredweight in April decreased by 2% year-over-year. The asset-light segment experienced a 9% decline in daily revenue but improved its non-GAAP operating loss. The company anticipates a non-GAAP operating loss of $1 million to $2 million for this segment in the second quarter. ArcBest's capital expenditure guidance for 2025 is $225 to $275 million, with a focus on optimizing total cost ownership and strategic investments. The company returned over $24 million to shareholders through share repurchases and dividends, and has $350 million in available liquidity.ArcBest Corporate Events
Business Operations and StrategyFinancial Disclosures
ArcBest Reports Q1 2025 Financial Decline
Negative
Mar 10, 2025
ArcBest’s first quarter 2025 financial update reveals a decline in daily tonnage and shipment levels in its Asset-Based segment compared to the previous year, attributed to a soft manufacturing economy and low truckload prices. Despite these challenges, the company managed to increase revenue per hundredweight, although lower fuel prices offset these gains. Meanwhile, the Asset-Light segment experienced a decrease in daily revenue due to winter weather impacts and strategic reductions in less profitable volumes, leading to an expected operating loss for the quarter.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.