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Covenant Logistics Group, Inc. (CVLG)
:CVLG
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Covenant Logistics Group
(NYSE:CVLG)
Rating:65Neutral
Price Target:
$25.00
▲( 11.26% Upside)
Positive Factors
Margin Improvement
Positive bid season commentary and management's confidence in seeking further rate increases suggest potential margin improvement.
Revenue Growth
Dedicated revenues ex fuel increased 13% as CVLG continues to add tractors into its business.
Share Buyback
Encouraged by buyback announcement.
Negative Factors
Competitive Pressure
Increasing competitive pressure in the dedicated segment is weighing on growth as CVLG is walking away from some business.
Poultry Business Challenges
Weather and pressures on poultry business due to bird flu present headwinds.
Weather Impact
Severe weather hit margins by approximately 3 points to a 98.1%, below forecast.
Covenant Logistics Group (CVLG) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$596.71M
Dividend Yield1.04%
Average Volume (3M)165.17K
Price to Earnings (P/E)16.2
Beta (1Y)1.17
Revenue Growth0.59%
EPS Growth-11.10%
CountryUS
Employees3,100
SectorIndustrials
Sector Strength90
IndustryTrucking
Share Statistics
EPS (TTM)0.32
Shares Outstanding21,855,879
10 Day Avg. Volume151,805
30 Day Avg. Volume165,171
Financial Highlights & Ratios
PEG Ratio-0.67
Price to Book (P/B)1.26
Price to Sales (P/S)0.00
P/FCF Ratio-18.53
Enterprise Value/Market Cap1.37
Enterprise Value/Revenue0.18
Enterprise Value/Gross Profit5.21
Enterprise Value/Ebitda1.46
Forecast
1Y Price Target
$32.00Price Target Upside42.41% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
Covenant Logistics Group Business Overview & Revenue Model
Company DescriptionCovenant Logistics Group (CVLG) is a leading provider of transportation and logistics services in North America. The company operates across multiple sectors, including expedited, dedicated, and managed freight transportation. With a commitment to delivering comprehensive supply chain solutions, Covenant Logistics offers services such as truckload, less-than-truckload, and intermodal transportation, as well as warehousing and freight brokerage.
How the Company Makes MoneyCovenant 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 demonstrates a mixed financial performance. The income statement highlights solid revenue generation but with declining net margins. The balance sheet reflects a reduced debt burden, improving financial stability, but equity growth challenges persist. Cash flow analysis indicates robust recovery and cash generation, though historical volatility remains a concern. Overall, the company shows potential for financial stability with room for improvement in profitability and equity growth.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 |
| 438.34M | 403.42M | 377.13M | 349.70M | 290.64M |
| Cash Flow | Free Cash Flow | |||
| -30.07M | -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
Neutral
22.47
Price Trends
21.22
Positive
23.89
Negative
25.35
Negative
Market Momentum
0.63
Negative
56.78
Neutral
56.21
Neutral
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 22.47 is above the 20-day moving average (MA) of 21.55, above the 50-day MA of 21.22, and below the 200-day MA of 25.35, indicating a neutral trend. The MACD of 0.63 indicates Negative momentum. The RSI at 56.78 is Neutral, neither overbought nor oversold. The STOCH value of 56.21 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for CVLG.
Covenant Logistics Group Risk Analysis
Covenant Logistics Group disclosed 42 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 2 New Risks
1.
Changes in taxation could lead to an increase of our tax exposure and could affect the Company's financial results. Q4, 2024
2.
A large-scale outbreak of avian flu or related illness among the nation's poultry flock may adversely affect the revenues of LTST. Q4, 2024
Covenant Logistics Group 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 | $620.41M | 7.44 | 13.57% | 1.74% | 1.16% | -30.78% | |
65 Neutral | $596.71M | 16.21 | 8.95% | 1.04% | 0.59% | -11.10% | |
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 | $691.66M | ― | -3.44% | 0.91% | -13.10% | -121.50% | |
50 Neutral | $1.62B | 91.85 | 1.21% | 2.14% | -7.66% | -78.26% |
* Industrials Sector Average
Performance Comparison
CVLG
Covenant Logistics Group
22.47
-1.01
-4.30%
HTLD
Heartland Express
8.80
-2.64
-23.08%
MRTN
Marten Transport
12.99
-4.40
-25.30%
WERN
Werner Enterprises
25.76
-10.80
-29.54%
ARCB
ArcBest
60.77
-44.86
-42.47%
ULH
Universal Logistics
23.56
-21.66
-47.90%
Covenant Logistics Group Earnings Call Summary
Earnings Call Date:Apr 23, 2025
(Q1-2025)
| % Change Since: 19.52%|
Next Earnings Date:Jul 23, 2025
Earnings Call Sentiment Neutral
The earnings call reflected a mix of both positive and negative aspects. While there was notable growth in the Dedicated and Managed Freight segments, and TEL's performance was strong, the company faced significant challenges with revenue declines, reduced operating income, and impacts from weather and avian influenza. The balance of these factors suggests a mixed outlook.Q1-2025 Updates
Positive Updates
Dedicated Segment Growth
Dedicated experienced average fleet growth in the first quarter of 212 units or approximately 16.7% and grew freight revenue by $9.5 million or 13.1% compared with the 2024 quarter.
Managed Freight Profitability Exceeds Expectations
Managed freight exceeded profitability expectations for the quarter by focused execution on profitable freight, assisting the expedited fleet with overflow capacity, and reducing insurance-related claims expense.
TEL Minority Investment Performance
TEL contributed pre-tax net income of $3.8 million for the quarter compared to $3.7 million in the prior year period. TEL's revenue increased by 25% year-over-year.
Improvement in Expedited Segment
The expedited segment yielded a 94.2 adjusted operating ratio, with improvement witnessed late in the period as operating conditions improved.
Negative Updates
Consolidated Freight Revenue Decline
Consolidated freight revenue declined by 1.8% or approximately $4.5 million to $243.2 million, primarily due to the managed freight segment generating $6 million less freight revenue.
Decrease in Adjusted Operating Income
Consolidated adjusted operating income shrank by 26.6% to $10.9 million, primarily due to adverse operating conditions that reduced utilization of revenue-producing equipment.
Warehouse Segment Profit Decline
The Warehouse segment saw a 6% decrease in freight revenue and a 42% decrease in adjusted operating profit compared to the prior year, due to facility cost increases and startup-related costs.
Weather and Avian Influenza Impact
Lower miles due to weather and avian influenza led to lower fixed cost coverage, higher layover costs, and worse equipment damage than a normal first quarter.
Company Guidance
During the Covenant Logistics Group Q1 2025 earnings call, guidance was provided on several key metrics and strategic directions. The company reported a 1.8% decline in consolidated freight revenue to $243.2 million, with managed freight revenue decreasing by $6 million, though this segment improved its adjusted operating income by $0.8 million. Consolidated adjusted operating income dropped by 26.6% to $10.9 million, largely due to adverse operating conditions. The adjusted leverage ratio was approximately 1.55 times, with a debt-to-capital ratio of 33.7%. The expedited segment saw a 5.3% reduction in average fleet size to 852 tractors, while the dedicated fleet grew by 16.7% or 212 units, increasing freight revenue by $9.5 million. Despite challenges from avian influenza and weather, the company plans to focus on improving margins through rate increases, exiting less profitable business, and expanding its specialized dedicated services. Covenant also noted a 6% decrease in warehouse segment revenue, with a 42% drop in adjusted operating profit, but expects improvements throughout the year. The company remains optimistic about its strategy and anticipates better operational conditions in the coming quarters.Covenant Logistics Group Corporate Events
Shareholder MeetingsDividends
Covenant Logistics Group Holds Annual Stockholders Meeting
Neutral
May 16, 2025
On May 14, 2025, Covenant Logistics Group held its Annual Meeting of Stockholders, where four proposals were voted on, including the election of directors, approval of executive compensation, ratification of Grant Thornton LLP as the independent accounting firm, and an amendment to increase authorized shares. The board also declared a quarterly cash dividend of $0.07 per share for Class A and B common stock, payable on June 27, 2025, to stockholders of record on June 6, 2025, as part of 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.
Stock BuybackBusiness Operations and StrategyFinancial Disclosures
Covenant Logistics Group Announces $50 Million Stock Buyback
Positive
Apr 23, 2025
Covenant Logistics Group announced a series of strategic initiatives aimed at enhancing operational efficiency and shareholder value. On April 23, 2025, the company approved a $50 million stock repurchase program, reflecting confidence in its future prospects. Additionally, the company’s leadership, including CEO David R. Parker and President M. Paul Bunn, will take voluntary salary reductions starting May 1, 2025, as part of efforts to improve margins. The first quarter of 2025 saw a decrease in adjusted earnings per share due to adverse weather and avian influenza, but Covenant remains optimistic about future growth, driven by modest rate increases and a recent acquisition expected to boost equipment utilization.
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.