Covenant Logistics Group (CVLG) AI Stock Analysis

• Market Cap: $611.32M
• Dividend Yield: 1.22%
• Average Volume (3M): 140.43K
• Price to Earnings (P/E): 16.6
• Beta (1Y): 1.18
• Revenue Growth: 0.59%
• EPS Growth: -11.10%
• Country: US
• Employees: 3,100
• Sector: Industrials
• Sector Strength: 87
• Industry: Trucking
• EPS (TTM): 0.32
• Shares Outstanding: 21,855,879
• 10 Day Avg. Volume: 150,993
• 30 Day Avg. Volume: 140,426
• PEG Ratio: 0.05
• Price to Book (P/B): 1.38
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 8.83
• Enterprise Value/Market Cap: 1.03
• Enterprise Value/Revenue: 0.14
• Enterprise Value/Gross Profit: 3.74
• Enterprise Value/Ebitda: 1.10
• 1Y Price Target: $32.00
• Price Target Upside: 40.60% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 69 Neutral
• Price Target: $25.00 ▲(9.84%Upside)

Covenant Logistics Group shows a stable financial position with strong balance sheet metrics and a strategic focus on operational efficiency. However, modest profitability and cash flow challenges pose risks. The stock exhibits short-term bullish momentum, but longer-term indicators are weaker. A recent stock buyback announcement and management's proactive measures are positive developments, underscoring confidence in future growth.

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.

Stock 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

Dedicated margins missed expectations due to customer shutdowns within its poultry business impacted by bird flu.

Weather Impact

Severe weather hit margins by ~3 points to a 98.1%, below forecast.

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 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

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

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

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.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
1.12B	1.13B	1.10B	1.22B	1.05B	838.56M
	Gross Profit
168.37M	189.65M	164.20M	185.99M	147.28M	109.55M
	EBIT
48.89M	44.76M	58.82M	48.04M	24.26M	-56.70M
	EBITDA
146.82M	146.00M	150.15M	105.55M	78.14M	55.40M
	Net Income Common Stockholders
38.51M	35.92M	55.23M	108.68M	60.73M	-14.12M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
11.24M	35.62M	2.29M	68.67M	8.41M	8.41M
	Total Assets
979.97M	997.57M	954.44M	796.64M	651.66M	676.72M
	Total Debt
278.17M	296.89M	293.46M	179.63M	74.25M	111.59M
	Net Debt
266.93M	261.27M	291.17M	110.96M	65.84M	103.18M
	Total Liabilities
536.33M	559.23M	551.02M	419.52M	301.96M	386.07M
	Stockholders Equity
443.64M	438.34M	403.42M	377.13M	349.70M	290.64M
Cash Flow		Free Cash Flow
-12.00M	-30.07M	-132.77M	58.76M	37.93M	-31.01M
	Operating Cash Flow
126.02M	122.89M	84.84M	159.23M	73.22M	63.04M
	Investing Cash Flow
-88.27M	-107.67M	-235.92M	-86.21M	10.34M	138.05M
	Financing Cash Flow
-29.46M	18.11M	84.71M	-12.77M	-83.56M	-236.27M

Covenant Logistics Group Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 22.76
• 50DMA: Positive
• 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 Neutral. The current price of 22.76 is below the 20-day moving average (MA) of 22.85, above the 50-day MA of 21.20, and below the 200-day MA of 25.06, indicating a neutral trend. The MACD of 0.38 indicates Positive momentum. The RSI at 53.23 is Neutral, neither overbought nor oversold. The STOCH value of 49.57 is Neutral, 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
ARCB	73 Outperform	$1.60B	9.00	14.25%	0.69%	-5.69%	51.78%
CVLG	69 Neutral	$611.32M	16.61	8.95%	1.22%	0.59%	-11.10%
Sector *	66 Neutral	$4.51B	12.22	5.40%	3.63%	4.14%	-12.01%
MRTN	64 Neutral	$1.08B	49.00	2.83%	1.81%	-13.47%	-62.49%
ULH	62 Neutral	$650.96M	7.81	13.57%	1.70%	1.16%	-30.78%
WERN	58 Neutral	$1.70B	96.42	1.21%	2.04%	-7.66%	-78.26%
HTLD	48 Neutral	$692.06M	―	-3.44%	0.91%	-13.10%	-121.50%

Covenant Logistics Group Corporate Events

Covenant Logistics Group Holds Annual Stockholders Meeting

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.

Covenant Logistics Group Announces $50 Million Stock Buyback

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.