Covenant Logistics Group (CVLG) AI Stock Analysis

• Market Cap: $505.65M
• Dividend Yield: 1.37%
• Average Volume (3M): 101.65K
• Price to Earnings (P/E): 17.0
• Beta (1Y): 1.21
• Revenue Growth: 1.62%
• EPS Growth: -22.52%
• Country: US
• Employees: 3,100
• Sector: Industrials
• Sector Strength: 72
• Industry: Trucking
• EPS (TTM): 0.44
• Shares Outstanding: 20,319,618
• 10 Day Avg. Volume: 78,408
• 30 Day Avg. Volume: 101,648
• PEG Ratio: -0.56
• Price to Book (P/B): 1.64
• Price to Sales (P/S): 0.63
• P/FCF Ratio: -23.85
• Enterprise Value/Market Cap: 1.91
• Enterprise Value/Revenue: 0.84
• Enterprise Value/Gross Profit: 5.37
• Enterprise Value/Ebitda: 6.89
• 1Y Price Target: $27.00
• Price Target Upside: 35.27% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 56 Neutral
• Price Target: $20.00 ▲(0.20% Upside)

Covenant Logistics Group's overall score is driven by strong revenue growth but offset by declining profitability margins and cash flow challenges. Technical indicators suggest bearish momentum, and the earnings call highlighted significant operational challenges. The stock's valuation is moderate, providing some support to the score.

Positive Factors

Revenue Growth

The increase in consolidated freight revenue indicates strong demand for Covenant's services, supporting long-term growth prospects.

Dedicated Segment Expansion

Expansion in the Dedicated segment suggests successful market penetration and client acquisition, enhancing Covenant's competitive position.

Optimistic Market Outlook

Regulatory changes could tighten market capacity, potentially increasing freight rates and benefiting Covenant's long-term profitability.

Negative Factors

Declining Operating Income

A significant decline in operating income indicates potential inefficiencies or cost pressures that could impact long-term profitability.

Increased Indebtedness

Rising debt levels could strain Covenant's financial flexibility, affecting its ability to invest in growth opportunities.

Segment Underperformance

Underperformance in key segments suggests operational challenges that may hinder Covenant's ability to achieve desired profitability levels.

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 through multiple streams, primarily from its trucking services, which include long-haul and short-haul transportation of freight. The company's revenue model is based on the transportation of goods for customers across various industries, using both owned assets and contract carriers. Key revenue streams include truckload services, logistics management, and dedicated fleet services. Additionally, CVLG benefits from strategic partnerships with major retailers and manufacturers that require reliable logistics solutions. The company also leverages technology to improve route efficiency and reduce operational costs, enhancing profitability.

Covenant Logistics Group Financial Statement Overview

Summary

Covenant Logistics Group shows strong revenue growth but faces challenges with declining profitability margins and cash flow issues. The balance sheet is stable with manageable leverage, but increasing debt levels require attention.

Income Statement

Covenant Logistics Group shows a mixed performance in its income statement. The TTM gross profit margin is low at 4.09%, indicating potential pricing or cost challenges. However, the company has maintained a positive net profit margin of 2.81% in the TTM, despite a significant revenue growth rate of 79.2%. The EBIT and EBITDA margins are moderate, suggesting operational efficiency. The revenue growth trajectory is strong, but the declining margins over the years could pose a risk.

Balance Sheet

The balance sheet reflects a stable financial position with a debt-to-equity ratio of 0.73 in the TTM, indicating manageable leverage. The return on equity is moderate at 7.48%, showing decent profitability from shareholders' investments. The equity ratio is healthy, suggesting a strong asset base relative to liabilities. However, the increasing debt levels over the years could be a concern if not managed properly.

Cash Flow

The cash flow statement reveals challenges, with a negative free cash flow growth rate of -2006.13% in the TTM, indicating cash flow issues. The operating cash flow to net income ratio is not available, but the free cash flow to net income ratio is low at 1.27%, suggesting limited cash generation relative to profits. The company needs to improve its cash flow management to support growth and operations.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.15B	1.13B	1.10B	1.22B	1.05B	838.56M
Gross Profit	179.90M	189.65M	164.20M	185.99M	147.28M	109.55M
EBITDA	140.24M	146.00M	150.15M	137.87M	117.24M	55.40M
Net Income	32.22M	35.92M	55.23M	108.68M	60.73M	-42.72M
Balance Sheet
Total Assets	1.03B	997.57M	954.44M	796.64M	651.66M	676.72M
Cash, Cash Equivalents and Short-Term Investments	268.34M	35.62M	2.29M	68.67M	8.41M	8.41M
Total Debt	309.11M	296.89M	293.46M	179.63M	74.25M	111.59M
Total Liabilities	601.89M	559.23M	551.02M	419.52M	301.96M	386.07M
Stockholders Equity	423.72M	438.34M	403.42M	377.13M	349.70M	290.64M
Cash Flow
Free Cash Flow	-30.48M	-30.07M	-132.77M	58.76M	37.93M	-31.01M
Operating Cash Flow	110.03M	122.89M	84.84M	159.23M	73.22M	63.04M
Investing Cash Flow	-92.65M	-107.67M	-235.92M	-86.21M	10.34M	138.05M
Financing Cash Flow	-49.89M	18.11M	84.71M	-12.77M	-83.56M	-236.27M

Covenant Logistics Group Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 19.96
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CVLG, the sentiment is Neutral. The current price of 19.96 is above the 20-day moving average (MA) of 19.41, below the 50-day MA of 20.57, and below the 200-day MA of 22.44, indicating a neutral trend. The MACD of -0.41 indicates Negative momentum. The RSI at 52.42 is Neutral, neither overbought nor oversold. The STOCH value of 82.51 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for CVLG.

Covenant Logistics Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
ARCB	61 Neutral	$1.44B	15.22	7.40%	0.75%	-5.34%	-48.16%
CVLG	56 Neutral	$505.65M	17.02	6.84%	1.37%	1.62%	-22.52%
WERN	55 Neutral	$1.57B	64.63	1.78%	2.37%	-3.42%	-43.86%
MRTN	54 Neutral	$836.40M	43.15	2.53%	2.45%	-9.74%	-42.57%
ULH	54 Neutral	$425.49M	6.98	-6.66%	2.78%	-7.55%	-130.67%
HTLD	43 Neutral	$611.84M	―	-4.35%	1.01%	-19.56%	-54.39%

Covenant Logistics Group Corporate Events

Covenant Logistics Group’s Earnings Call: Mixed Sentiments and Future Outlook

Covenant Logistics Group’s recent earnings call presented a mixed sentiment, with positive highlights such as increased freight revenue and growth in the Dedicated segment. However, these were overshadowed by significant challenges, including a decline in operating income, increased indebtedness, underperformance in key segments, and the negative impact of the government shutdown on specific business areas.

Covenant Logistics Reports Mixed Q3 2025 Results

Covenant Logistics Group, Inc. is a transportation and logistics company providing asset-based and asset-light services across the United States, including truckload capacity, warehousing, and freight brokerage. In its third-quarter 2025 earnings report, Covenant Logistics reported a mixed financial performance with a slight increase in total revenue to $296.9 million, up 3.1% from the previous year. However, the company’s net income decreased to $9.1 million from $13.0 million in the same quarter last year, reflecting challenges in its Truckload business due to higher costs and under-utilized equipment. The company’s Truckload segment saw a modest revenue increase of 0.3%, while the Expedited segment experienced an 8.2% decline in freight revenue. The Dedicated segment, however, showed a strong performance with a 10.8% increase in freight revenue. Covenant’s Managed Freight segment reported a 14% increase in freight revenue, while the Warehousing segment remained relatively stable. Looking ahead, Covenant Logistics anticipates short-term challenges, including lower profits from its minority investment in TEL and potential impacts from external factors. However, the company remains optimistic about long-term growth opportunities, particularly in its dedicated and warehouse business segments, as it continues to adapt its operations to improve returns.

Covenant Logistics Announces New Accounting Officer

On August 11, 2025, Matisse Long resigned as the Chief Accounting Officer of Covenant Logistics Group, Inc., and the Board of Directors appointed James ‘Tripp’ S. Grant as the new principal accounting officer, effective immediately. Additionally, on August 12, 2025, the Board declared a quarterly cash dividend of $0.07 per share for Class A and Class B common stock, payable on September 26, 2025, to stockholders of record as of September 5, 2025, continuing a previously approved dividend program.

The most recent analyst rating on (CVLG) stock is a Buy with a $34.00 price target. To see the full list of analyst forecasts on Covenant Logistics Group stock, see the CVLG Stock Forecast page.