Covenant Logistics Group (CVLG) AI Stock Analysis

• Market Cap: $489.42M
• Dividend Yield: 1.27%
• Average Volume (3M): 126.96K
• Price to Earnings (P/E): 14.2
• Beta (1Y): 1.10
• Revenue Growth: 2.53%
• EPS Growth: -35.42%
• Country: US
• Employees: 3,100
• Sector: Industrials
• Sector Strength: 66
• Industry: Trucking
• EPS (TTM): 1.29
• Shares Outstanding: 21,855,879
• 10 Day Avg. Volume: 195,015
• 30 Day Avg. Volume: 126,957
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.53
• Price to Cash Flow (P/CF): 6.80
• P/FCF Ratio: 6.10
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $31.00
• Price Target Upside: 69.03% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

Covenant Logistics Group scores 63, reflecting a mixed outlook. Strengths include a solid revenue base and improved cash flows, but declining profitability and technical weakness pose concerns. The valuation is fair, and the earnings call indicates cautious optimism for future growth, offset by current operational challenges.

Positive Factors

Business Growth

Strong growth in high-yielding munitions business supported margin results.

Management Outlook

Management is optimistic on a spring inflection that could give opportunity to re-price freight into the Summer.

Margin Improvement

Positive bid season commentary and management's confidence in seeking further rate increases suggest potential margin improvement.

Negative Factors

Operational Challenges

Hurricane impacts created a tough start to the quarter and OR likely stepping up materially in 4Q as the network attempts to rebalance.

Poultry Business Challenges

Weather and pressures on poultry business due to bird flu present headwinds.

Volume Decline

Soft volumes in the final month of the quarter were negatively impacted by lower demand from the LTL line haul business, putting pressure on the Expedited network and hurting utilization.

Covenant Logistics Group Business Overview & Revenue Model

Company Description

Covenant Logistics Group, Inc., together with its subsidiaries, provides transportation and logistics services in the United States. It operates through four segments: Expedited, Dedicated, Managed Freight, and Warehousing. The Expedited segment primarily provides truckload services with high service freight and delivery standards, such as 1,000 miles in 22 hours or 15-minute delivery windows. The Dedicated segment provides customers with committed truckload capacity over contracted periods using equipment either owned or leased by the company. The Managed Freight segment offers brokerage services, including logistics capacity by outsourcing the carriage of customers' freight to third parties; and transport management services, such as logistics services on a contractual basis to customers who prefer to outsource their logistics needs. The Warehousing segment provides day-to-day warehouse management services to customers. The segment also provides shuttle and switching services to shuttling containers and trailers. The company also engages in used equipment sales and leasing business. It serves transportation companies, such as parcel freight forwarders, less-than-truckload carriers, and third-party logistics providers; and traditional truckload customers, including manufacturers, retailers, and food and beverage shippers. As of December 31, 2021, it operated 2,291 tractors and 5,331 trailers. The company was formerly known as Covenant Transportation Group, Inc. and changed its name to Covenant Logistics Group, Inc. in July 2020. Covenant Logistics Group, Inc. was founded in 1986 and is based in Chattanooga, Tennessee.

How the Company Makes Money

Covenant Logistics Group generates revenue primarily through its diverse range of transportation and logistics services. Key revenue streams include expedited and dedicated trucking services, where the company provides time-sensitive and specialized transportation solutions for various industries. Additionally, Covenant earns income from its managed freight services, which involve coordinating and optimizing freight movements for clients. The company also leverages its warehousing and freight brokerage capabilities to enhance its service offerings and capture additional market opportunities. Strategic partnerships and a focus on technology-driven solutions further contribute to its financial performance by improving efficiency and expanding its customer base.

Covenant Logistics Group Financial Statement Overview

Summary

Covenant Logistics Group shows strong revenue generation with challenges in profitability and equity growth. The income statement indicates declining net margins despite efficient cost management. The balance sheet reflects improved debt management but volatility in equity growth. Cash flow analysis shows a robust recovery and strong cash generation, albeit with past volatility.

Income Statement

Covenant Logistics Group showed fluctuating revenue with a slight decrease from 2022 to 2023, but a small recovery in 2024. The gross profit margin remained strong at 100% in 2024, indicating efficient cost management. However, the net profit margin has decreased over the years, reflecting increased costs or competitive pressures. EBIT and EBITDA margins are moderate, suggesting operational efficiency improvements are needed.

Balance Sheet

The company's debt-to-equity ratio has improved significantly by 2024 due to reduced total debt, indicating a lower risk profile. However, the equity ratio has also decreased, suggesting that the company is relying less on equity financing. Return on equity has been volatile, with a decline in recent years. Overall, the balance sheet shows improving debt management but challenges in maintaining equity growth.

Cash Flow

Covenant Logistics Group experienced a strong recovery in operating cash flow in 2024, with a notable increase in free cash flow from the previous year. The free cash flow to net income ratio indicates strong cash generation relative to profits. However, past negative free cash flows highlight potential volatility in cash management.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
1.22B	1.13B	1.10B	1.22B	1.05B	838.56M
	Gross Profit
187.17M	189.65M	164.20M	185.99M	147.28M	109.55M
	EBIT
68.26M	44.76M	58.82M	48.04M	24.26M	-56.70M
	EBITDA
143.03M	146.00M	150.15M	105.55M	78.14M	55.40M
	Net Income Common Stockholders
114.91M	35.92M	55.23M	108.68M	60.73M	-14.12M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
9.93M	35.62M	2.29M	68.67M	8.41M	8.41M
	Total Assets
392.85M	997.57M	954.44M	796.64M	651.66M	676.72M
	Total Debt
202.63M	296.89M	293.46M	179.63M	74.25M	111.59M
	Net Debt
192.70M	261.27M	291.17M	110.96M	65.84M	103.18M
	Total Liabilities
299.93M	559.23M	551.02M	419.52M	301.96M	386.07M
	Stockholders Equity
92.92M	150.39M	403.42M	377.13M	349.70M	290.64M
Cash Flow		Free Cash Flow
51.16M	122.89M	-132.77M	58.76M	37.93M	-31.01M
	Operating Cash Flow
126.05M	122.89M	84.84M	159.23M	73.22M	63.04M
	Investing Cash Flow
-61.44M	-107.67M	-235.92M	-86.21M	10.34M	138.05M
	Financing Cash Flow
-27.54M	18.11M	84.71M	-12.77M	-83.56M	-236.27M

Covenant Logistics Group Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 18.34
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CVLG, the sentiment is Negative. The current price of 18.34 is below the 20-day moving average (MA) of 20.60, below the 50-day MA of 23.10, and below the 200-day MA of 25.84, indicating a bearish trend. The MACD of -1.42 indicates Positive momentum. The RSI at 33.40 is Neutral, neither overbought nor oversold. The STOCH value of 21.60 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CVLG.

Covenant Logistics Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ULH	65 Neutral	$697.94M	5.38	22.03%	1.58%	11.06%	39.68%
CVLG	63 Neutral	$489.42M	14.22	8.39%	1.27%	2.53%	-35.42%
Sector *	62 Neutral	$4.17B	11.26	5.46%	215.76%	4.12%	-8.54%
ARCB	61 Neutral	$1.41B	8.38	13.56%	0.79%	-5.61%	40.21%
MRTN	57 Neutral	$1.08B	50.59	2.83%	1.81%	-13.47%	-62.49%
WERN	55 Neutral	$1.75B	51.80	2.29%	1.98%	-7.71%	-69.05%
HTLD	46 Neutral	$647.87M	―	-3.52%	0.97%	-13.25%	-301.55%

Covenant Logistics Group Corporate Events

Covenant Logistics EVP Samuel Hough Announces Retirement

Samuel F. Hough, Executive Vice President of Expedited Operations at Covenant Logistics Group, has announced his retirement effective December 31, 2024, but will continue in a reduced capacity focusing on customer development and retention. The company’s Compensation Committee has adjusted his annualized base salary post-retirement, reflecting his ongoing value and contribution to the company.