Education
About Us
Working with TipRanks
Follow Us
Covenant Logistics Group (CVLG)
NYSE:CVLG
Top Page
Covenant Logistics Group
(NYSE:CVLG)
59Neutral
Positive Factors
Bid Season Commentary
Positive bid season commentary and management's confidence in seeking further rate increases suggest potential margin improvement.
Management Optimism
Management is optimistic on a spring inflection that could give opportunity to re-price freight into the Summer.
Negative Factors
Poultry Business Challenges
Weather and pressures on poultry business due to bird flu present headwinds.
Covenant Logistics Group (CVLG) vs. S&P 500 (SPY)
Market Cap
$570.16M
Dividend Yield0.92%
Average Volume (3M)75.16K
Price to Earnings (P/E)18.5
Beta (1Y)1.12
Revenue Growth2.53%
EPS Growth-35.42%
CountryUS
Employees4,600
SectorIndustrials
Sector Strength69
IndustryTransportation
Share Statistics
EPS (TTM)1.29
Shares Outstanding21,850,403
10 Day Avg. Volume77,107
30 Day Avg. Volume75,158
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.56
Price to Cash Flow (P/CF)7.30
P/FCF Ratio6.50
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$33.00Price Target Upside41.21% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
Covenant Logistics Group Business Overview & Revenue Model
Company DescriptionCovenant Logistics Group (CVLG) is a leading provider of transportation and logistics services in the United States. Headquartered in Chattanooga, Tennessee, the company operates in various sectors including truckload, dedicated, expedited, and managed freight services. Covenant Logistics Group offers a comprehensive range of logistics solutions, leveraging its extensive fleet and technology-driven approach to meet the diverse needs of its clients across different industries.
How the Company Makes MoneyCovenant Logistics Group generates revenue primarily through its transportation and logistics services. The company's key revenue streams include truckload services, where it provides full-truckload freight transportation; dedicated services, offering fleet resources exclusively for specific customers; and expedited services, which cater to time-sensitive freight needs. Additionally, CVLG earns through managed freight services by optimizing and coordinating logistics operations for its clients. Significant partnerships with major industry players and a focus on technology integration contribute to enhancing operational efficiency and expanding its market reach, thereby driving its earnings.
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.68
Positive
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.55
Neutral
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.72
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 1.13B | 1.10B | 1.22B | 1.05B | 838.56M | Gross Profit |
| 189.65M | 164.20M | 185.99M | 147.28M | 109.55M | EBIT |
| 44.76M | 58.82M | 48.04M | 24.26M | -56.70M | EBITDA |
| 146.00M | 150.15M | 105.55M | 78.14M | 55.40M | Net Income Common Stockholders |
| 35.92M | 55.23M | 108.68M | 60.73M | -14.12M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 35.62M | 2.29M | 68.67M | 8.41M | 8.41M | Total Assets |
| 997.57M | 954.44M | 796.64M | 651.66M | 676.72M | Total Debt |
| 296.89M | 293.46M | 179.63M | 74.25M | 111.59M | Net Debt |
| 261.27M | 291.17M | 110.96M | 65.84M | 103.18M | Total Liabilities |
| 559.23M | 551.02M | 419.52M | 301.96M | 386.07M | Stockholders Equity |
| 150.39M | 403.42M | 377.13M | 349.70M | 290.64M |
| Cash Flow | Free Cash Flow | |||
| 122.89M | -132.77M | 58.76M | 37.93M | -31.01M | Operating Cash Flow |
| 122.89M | 84.84M | 159.23M | 73.22M | 63.04M | Investing Cash Flow |
| -107.67M | -235.92M | -86.21M | 10.34M | 138.05M | Financing Cash Flow |
| 18.11M | 84.71M | -12.77M | -83.56M | -236.27M |
Covenant Logistics Group Technical Analysis
Negative
23.37
Price Trends
26.55
Negative
27.16
Negative
26.18
Negative
Market Momentum
-0.86
Positive
29.83
Positive
5.59
Positive
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 23.37 is below the 20-day moving average (MA) of 25.12, below the 50-day MA of 26.55, and below the 200-day MA of 26.18, indicating a bearish trend. The MACD of -0.86 indicates Positive momentum. The RSI at 29.83 is Positive, neither overbought nor oversold. The STOCH value of 5.59 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CVLG.
Covenant Logistics Group Risk Analysis
Covenant Logistics Group disclosed 40 risk factors in its most recent earnings report. Covenant Logistics Group reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Covenant Logistics Group Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
65 Neutral | $15.42B | 28.84 | 14.06% | 1.08% | -5.79% | -20.32% | |
62 Neutral | $7.51B | 64.62 | 1.66% | 1.36% | 3.76% | -46.10% | |
62 Neutral | $8.16B | 12.81 | 0.47% | 3.07% | 3.83% | -16.36% | |
59 Neutral | $570.16M | 18.49 | 8.39% | 0.92% | 2.53% | -35.42% | |
56 Neutral | $1.14B | 43.43 | 3.53% | 1.67% | -14.83% | -61.80% | |
54 Neutral | $1.89B | 58.83 | 2.29% | 1.83% | -7.71% | -69.05% | |
52 Neutral | $754.08M | ― | -3.52% | 0.81% | -13.25% | -301.55% |
* Industrials Sector Average
Performance Comparison
CVLG
Covenant Logistics Group
23.37
0.94
4.19%
HTLD
Heartland Express
9.38
-2.67
-22.16%
JBHT
JB Hunt
154.45
-45.01
-22.57%
KNX
Knight Transportation
46.71
-8.69
-15.69%
MRTN
Marten Transport
13.91
-4.82
-25.73%
WERN
Werner Enterprises
29.85
-8.48
-22.12%
Covenant Logistics Group Earnings Call Summary
Earnings Call Date: Jan 23, 2025 | % Change Since: -19.05% | Next Earnings Date: Apr 23, 2025
Earnings Call Sentiment Neutral
The earnings call reflected a balanced view with both positive growth in revenue and warehousing profitability, but also challenges in the Dedicated segment and reduced income from TEL investment. Optimism for future performance was evident with anticipation of improved market conditions and successful rate negotiations.Highlights
Consolidated Freight Revenue Growth
Consolidated freight revenue grew by 4.6% year-over-year due to new multiyear customer agreements in the Dedicated segment.
Warehouse Profit Improvement
Warehousing improved its adjusted operating profit by 56% compared to the prior year, achieving an adjusted operating ratio of 90.7%.
Debt Reduction
Net indebtedness decreased by $28.7 million to $219.6 million, with an adjusted leverage ratio of approximately 1.5x and a debt-to-capital ratio of 33.4%.
Positive Bid Wins and Rate Increases
Achieved a 2.5% rate increase on 50-55% of business and won more bid numbers in the first three weeks of the year than in six months last year.
Lowlights
Dedicated Segment Profitability Challenges
Dedicated segment experienced average fleet growth but profitability fell short due to margin erosion from customer shutdowns, volume reductions, and increased costs.
Impact of Avian Influenza on Poultry Segment
Prolonged customer shutdowns and volume reductions in the poultry segment due to avian influenza, impacting the Dedicated segment.
TEL Investment Income Decline
Minority investment in TEL saw a decrease in pretax net income by approximately 36% compared to the fourth quarter of 2023.
Company Guidance
During the Covenant Logistics Group Q4 2024 earnings call, several key metrics and guidance were highlighted. The company's consolidated freight revenue grew by 4.6% year-over-year, primarily driven by new multiyear customer agreements in the Dedicated segment. Consolidated adjusted operating income rose by 4.7%, with significant contributions from margin improvements in the Asset-Light segments. The company's net indebtedness decreased by $28.7 million to $219.6 million, resulting in an adjusted leverage ratio of approximately 1.5x and a debt-to-capital ratio of 33.4%. The average age of the tractor fleet increased slightly to 20 months. Despite some challenges, such as prolonged customer shutdowns and weather disruptions, Covenant Logistics expects consolidated earnings to improve in 2025, driven by better pricing negotiations and strategic growth in specialized dedicated business segments. The company aims to enhance long-term returns by optimizing customer and freight mix and capitalizing on niche business growth opportunities.Covenant Logistics Group Corporate Events
Executive/Board Changes
Covenant Logistics EVP Samuel Hough Announces Retirement
Neutral
Dec 31, 2024
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.
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.