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Covenant Logistics Group (CVLG)
NYSE:CVLG
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Covenant Logistics Group (CVLG) AI Stock Analysis

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CVLG

Covenant Logistics Group

(NYSE:CVLG)

Rating:71Outperform
Price Target:
$28.00
▲(6.83%Upside)
Covenant Logistics Group's stable financial performance, coupled with positive technical momentum, supports a strong overall stock score. While the company faces profitability and cash flow challenges, the technical indicators suggest potential for future growth. The neutral sentiment from the earnings call reflects both opportunities and risks, resulting in a balanced outlook.
Positive Factors
Business Operations
CVLG's operations have been steady, leading to results above forecasts.
Stock Buybacks
CVLG is actively engaging in stock buybacks, reflecting confidence in its valuation.
Negative Factors
Competitive Pressure
Increasing competitive pressure in the dedicated segment is affecting growth as CVLG exits certain businesses.
Operational Efficiency
Expedited OR missed the estimate and the top line was slightly below expectations.

Covenant Logistics Group (CVLG) vs. SPDR S&P 500 ETF (SPY)

Covenant Logistics Group Business Overview & Revenue Model

Company DescriptionCovenant 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 MoneyCovenant Logistics Group generates revenue primarily through its transportation and logistics services. The company's key revenue streams include truckload transportation, which involves the long-haul movement of goods using its fleet of trucks, and dedicated contract transportation, where Covenant provides customized logistics solutions on a contract basis to meet specific client needs. Additionally, the company earns from managed transportation services, offering comprehensive logistics management, and from its freight brokerage operations, which facilitate transactions between shippers and carriers. Warehousing services also contribute to its revenue by providing storage and inventory management solutions. Strategic partnerships with major clients and a focus on delivering value-added services further bolster Covenant's earnings.

Covenant Logistics Group Earnings Call Summary

Earnings Call Date:Jul 23, 2025
(Q2-2025)
|
% Change Since: 7.95%|
Next Earnings Date:Oct 16, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted significant achievements such as record revenue, growth in the dedicated fleet, and success in the Managed Freight segment. However, these were offset by challenges including compressed margins, difficulties in the Expedited segment, and a notable decline in the Warehouse segment's operating profit. The overall sentiment of the call is neutral, with a balance between positive growth and ongoing challenges.
Q2-2025 Updates
Positive Updates
Record Revenue Achievement
Revenue rebounded during the second quarter to a new record high, driven by growth in the dedicated fleet, strong new business awards in Managed Freight, and a small acquisition.
Growth in Dedicated Fleet
The dedicated fleet grew by 162 tractors, representing an increase of approximately 11.7% compared to the prior year, with freight revenue growing by $8.3 million or 10.2%.
Managed Freight Segment Success
Managed freight exceeded both revenue and profitability expectations for the quarter, benefiting from nonrecurring business and a strong ability to handle overflow freight from the Expedited segment.
Share Repurchase Program
1.6 million shares were repurchased, accounting for 5.7% of the average diluted shares outstanding, at a total cost of $35.2 million.
TEL's Revenue Increase
TEL's revenue in the quarter increased by 34% compared to the prior year, primarily through increasing its truck and trailer fleet.
Negative Updates
Compressed Margins
Margins remain compressed, particularly in the Asset-Based Truckload segments, due to an inflationary cost environment and persistently high claims expenses.
Expedited Segment Challenges
The Expedited segment yielded a 93.9% adjusted operating ratio, only slightly better than the previous year, with a decrease in average fleet size by 50 units or 5.5%.
Warehouse Segment Profit Decline
Warehouse segment adjusted operating profit fell by approximately 45% due to facility-related cost increases and start-up related costs and inefficiencies.
Increased Net Indebtedness
Net indebtedness increased by $49 million to $268.7 million as of June 30, with an adjusted leverage ratio of approximately 2x.
Decline in Return on Average Invested Capital
On an adjusted basis, return on average invested capital was 7% versus 8% in the prior year.
Company Guidance
During the Covenant Logistics Group Q2 2025 earnings call, pivotal metrics were highlighted, indicating a mixed but optimistic outlook. Revenue reached a record high of $276.5 million, marking a 7.8% increase year-over-year, while consolidated adjusted operating income decreased by 19.6% to $15 million due to cost pressures. The company repurchased approximately 1.6 million shares at an average price of $22.69, leaving $13.8 million available under the $50 million share repurchase authorization. The Expedited segment posted a 93.9% adjusted operating ratio, and Dedicated's margin improved sequentially but remained below expectations. Net indebtedness rose to $268.7 million, yielding a 2x adjusted leverage ratio. The company anticipates better results in the second half of 2025, driven by potential improvements in market conditions, ongoing dedicated fleet growth, and strategic capital allocation.

Covenant Logistics Group Financial Statement Overview

Summary
Covenant Logistics Group presents a stable but cautious financial outlook. The income statement shows efforts toward efficiency, though profitability remains modest. The balance sheet is strong with manageable debt levels and a solid equity base. However, cash flow challenges due to capital expenditures could impact liquidity if not managed carefully. Overall, the company displays stability with areas for improvement in profitability and cash management.
Income Statement
70
Positive
The income statement shows mixed results. The TTM gross profit margin is approximately 15.0%, indicating reasonable cost management. However, the net profit margin stands at 3.4%, reflecting modest net profitability. Revenue growth is inconsistent, with a decline from 2022 to 2023, but a small recovery in 2024. EBIT and EBITDA margins have improved slightly in the recent TTM, reflecting operational efficiency.
Balance Sheet
75
Positive
The balance sheet indicates a stable financial position with a debt-to-equity ratio of 0.63 in the TTM, suggesting manageable leverage. The return on equity is around 8.7%, which is moderate. The equity ratio of 45.3% in the TTM points to a solid equity base, supporting financial stability.
Cash Flow
65
Positive
The cash flow statement highlights challenges with free cash flow, which is negative in the TTM. The operating cash flow to net income ratio is favorable at 3.3, indicating strong cash generation relative to profits. However, free cash flow to net income is negative, reflecting high capital expenditures impacting liquidity.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue1.13B1.10B1.22B1.05B838.56M
Gross Profit189.65M164.20M185.99M147.28M109.55M
EBITDA146.00M150.15M105.55M78.14M55.40M
Net Income35.92M55.23M108.68M60.73M-14.12M
Balance Sheet
Total Assets997.57M954.44M796.64M651.66M676.72M
Cash, Cash Equivalents and Short-Term Investments35.62M2.29M68.67M8.41M8.41M
Total Debt296.89M293.46M179.63M74.25M111.59M
Total Liabilities559.23M551.02M419.52M301.96M386.07M
Stockholders Equity438.34M403.42M377.13M349.70M290.64M
Cash Flow
Free Cash Flow-30.07M-132.77M58.76M37.93M-31.01M
Operating Cash Flow122.89M84.84M159.23M73.22M63.04M
Investing Cash Flow-107.67M-235.92M-86.21M10.34M138.05M
Financing Cash Flow18.11M84.71M-12.77M-83.56M-236.27M

Covenant Logistics Group Technical Analysis

Technical Analysis Sentiment
Positive
Last Price26.21
Price Trends
50DMA
23.72
Positive
100DMA
22.52
Positive
200DMA
24.86
Positive
Market Momentum
MACD
0.35
Negative
RSI
66.64
Neutral
STOCH
60.07
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CVLG, the sentiment is Positive. The current price of 26.21 is above the 20-day moving average (MA) of 24.82, above the 50-day MA of 23.72, and above the 200-day MA of 24.86, indicating a bullish trend. The MACD of 0.35 indicates Negative momentum. The RSI at 66.64 is Neutral, neither overbought nor oversold. The STOCH value of 60.07 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 0 New Risks

Covenant Logistics Group Peers Comparison

Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
79
Outperform
$1.93B11.1214.25%0.56%-5.69%51.78%
71
Outperform
$668.94M19.308.58%0.95%0.75%-15.76%
70
Outperform
$721.27M11.829.67%1.39%-5.55%-52.21%
61
Neutral
$1.78B101.471.21%1.91%-7.66%-78.26%
58
Neutral
$1.06B50.782.72%1.85%-11.77%-52.06%
58
Neutral
HK$14.94B4.73-2.78%5.01%3.80%-54.55%
53
Neutral
$651.21M-4.42%0.96%-16.42%-49.44%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
CVLG
Covenant Logistics Group
26.21
-0.86
-3.18%
HTLD
Heartland Express
8.36
-4.49
-34.94%
MRTN
Marten Transport
13.00
-5.14
-28.34%
WERN
Werner Enterprises
29.33
-9.28
-24.04%
ARCB
ArcBest
86.21
-34.45
-28.55%
ULH
Universal Logistics
30.11
-11.09
-26.92%

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.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Jul 25, 2025