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Forward Air Corp. (FWRD)
NASDAQ:FWRD
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Forward Air
(NASDAQ:FWRD)
45Neutral
Positive Factors
Cash Flow Improvement
The cash flow profile should improve in 2025 as transaction and other costs reduce and core operations increase.
Cost Savings Initiatives
FWRD has been tracking ahead of plan on the annualized cost savings initiatives and reached $80m, which will be the run-rate in 1Q 2025 and beyond.
Financial Flexibility
Adding the cash to the $277m of availability under the amended reduced revolving credit facility, liquidity at the end of the quarter was $382m with much more financial flexibility.
Negative Factors
Expedited LTL Business Performance
Given continued weak results from the core Expedited LTL business, 4Q adjusted EBITDA was below expectations.
Operating Margins
The core Expedited Freight (LTL) business continues to report weak results with operating margins the lowest seen at 2.7% compared to 10.6% in FY 2023.
Revenue Performance
Total company revenue of $632.8m was below the estimate of $665.4m with both Expedited Freight and Omni below expectations.
Forward Air (FWRD) vs. S&P 500 (SPY)
Market Cap
$398.89M
Dividend Yield0.86%
Average Volume (3M)800.84K
Price to Earnings (P/E)―
Beta (1Y)1.78
Revenue Growth56.49%
EPS Growth-7872.87%
CountryUS
Employees6,319
SectorIndustrials
Sector Strength63
IndustryIntegrated Freight & Logistics
Share Statistics
EPS (TTM)-30.74
Shares Outstanding30,402,884
10 Day Avg. Volume704,931
30 Day Avg. Volume800,841
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.28
Price to Cash Flow (P/CF)3.00
P/FCF Ratio3.80
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$29.67Price Target Upside126.14% Upside
Rating ConsensusHold
Number of Analyst Covering4
Forward Air Business Overview & Revenue Model
Company DescriptionForward Air Corporation (FWRD) is a leading asset-light freight and logistics company that specializes in expedited less-than-truckload (LTL) services across North America. The company operates through various segments, including expedited LTL, intermodal, pool distribution, and truckload services. Forward Air is known for its efficient and reliable transportation solutions, serving a wide range of industries with a focus on time-sensitive shipments.
How the Company Makes MoneyForward Air Corporation generates revenue primarily through its expedited less-than-truckload (LTL) services, which cater to businesses needing fast and reliable transportation of smaller freight volumes. The company's revenue model is built on providing premium, time-definite transportation services, which command higher rates than traditional LTL services. Additionally, Forward Air offers intermodal services that utilize rail and road networks to optimize cost and efficiency, pool distribution services for retail and other industries requiring distribution from a central point to multiple destinations, and truckload services for larger shipments. Strategic partnerships with airlines, freight forwarders, and logistics companies enhance its service offerings and expand its customer base, contributing to its earnings.
Forward Air Financial Statement Overview
Summary
Forward Air's financials show significant challenges with declining profitability, high leverage, and negative cash flow, which pose risks to financial stability and operational sustainability.Income Statement
The income statement reveals a significant decline in profitability with a negative net profit margin of -33.02% in the TTM, down from a positive 12.21% in 2023, reflecting substantial losses. Gross profit margin decreased to 7.14% in TTM. Revenue growth has been inconsistent, with a notable decline in 2024 compared to 2023. The EBIT margin also decreased to 1.20% in TTM. These metrics indicate potential challenges in maintaining profitability and revenue growth.45
Neutral
Balance Sheet
The balance sheet shows a concerning financial leverage with a debt-to-equity ratio of 1.95 in TTM, reflecting high reliance on debt. Return on equity has turned negative at -338.32% due to net losses, suggesting poor returns for shareholders. The equity ratio decreased to 8.52%, indicating a weakened equity position. These factors highlight financial instability and increased risk.55
Neutral
Cash Flow
The cash flow statement presents negative free cash flow in TTM, indicating challenges in generating cash after capital expenditures. The operating cash flow to net income ratio is negative, suggesting operational inefficiencies. The free cash flow to net income ratio reflects significant cash flow issues. The declining cash flow metrics point to potential liquidity constraints.40
Negative
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 2.47B | 1.37B | 1.97B | 1.66B | 1.27B | Gross Profit |
| 339.65M | 330.15M | 546.82M | 365.33M | 229.11M | EBIT |
| -1.06B | 88.21M | 265.98M | 159.30M | 73.92M | EBITDA |
| -916.64M | 145.62M | 290.14M | 198.85M | 111.05M | Net Income Common Stockholders |
| -816.97M | 167.35M | 193.19M | 105.86M | 52.77M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 104.90M | 121.97M | 45.82M | 37.32M | 40.25M | Total Assets |
| 2.80B | 2.98B | 1.21B | 1.12B | 1.05B | Total Debt |
| 469.87M | 1.95B | 277.85M | 320.07M | 243.24M | Net Debt |
| 364.96M | 1.82B | 232.03M | 282.75M | 202.98M | Total Liabilities |
| 2.52B | 2.22B | 500.83M | 524.17M | 500.44M | Stockholders Equity |
| 201.73M | 764.26M | 707.24M | 593.65M | 547.33M |
| Cash Flow | Free Cash Flow | |||
| -112.46M | 150.66M | 218.36M | 81.15M | 63.84M | Operating Cash Flow |
| -75.40M | 181.39M | 259.09M | 120.26M | 84.11M | Investing Cash Flow |
| -1.61B | 174.84M | -104.46M | -88.31M | -82.71M | Financing Cash Flow |
| -163.83M | 1.55B | -146.12M | -34.89M | -26.45M |
Forward Air Technical Analysis
Negative
13.12
Price Trends
25.16
Negative
29.31
Negative
29.66
Negative
Market Momentum
-1.47
Negative
32.53
Neutral
32.39
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FWRD, the sentiment is Negative. The current price of 13.12 is below the 20-day moving average (MA) of 19.50, below the 50-day MA of 25.16, and below the 200-day MA of 29.66, indicating a bearish trend. The MACD of -1.47 indicates Negative momentum. The RSI at 32.53 is Neutral, neither overbought nor oversold. The STOCH value of 32.39 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FWRD.
Forward Air Risk Analysis
Forward Air disclosed 50 risk factors in its most recent earnings report. Forward Air 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
Forward Air Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $15.01B | 19.07 | 35.12% | 1.34% | 13.98% | 14.29% | |
68 Neutral | $32.32B | 27.75 | 27.90% | 0.70% | -0.88% | -2.79% | |
67 Neutral | $4.83B | 24.78 | 20.03% | 1.03% | -9.13% | -25.11% | |
67 Neutral | $8.59B | 23.86 | 17.03% | ― | 11.37% | 1.82% | |
65 Neutral | $13.47B | 24.24 | 14.06% | 1.28% | -5.79% | -20.32% | |
62 Neutral | $7.26B | 12.38 | 3.01% | 3.40% | 3.58% | -14.13% | |
45 Neutral | $398.89M | ― | -167.82% | 0.86% | 56.49% | -7872.87% |
* Industrials Sector Average
Performance Comparison
FWRD
Forward Air
13.12
-16.16
-55.19%
EXPD
Expeditors International
108.98
-7.89
-6.75%
JBHT
JB Hunt
134.66
-58.28
-30.21%
LSTR
Landstar System
136.64
-45.39
-24.94%
ODFL
Old Dominion Freight
152.06
-71.37
-31.94%
SAIA
Saia
322.38
-275.62
-46.09%
Forward Air Earnings Call Summary
Earnings Call Date: Feb 26, 2025 | % Change Since: -49.05% | Next Earnings Date: Apr 30, 2025
Earnings Call Sentiment Neutral
Forward Air demonstrated strong performance in integration and cost savings, with notable achievements in EBITDA and positive cash flow transition. However, these positive aspects were offset by challenges in the Expedited Freight segment and sequential revenue decline, leading to a balanced sentiment.Highlights
Full Year 2024 EBITDA Achievement
For the full year 2024, Forward Air reported consolidated EBITDA of $308 million, which was near the top of the guidance range of $300 million to $310 million.
Integration Synergies Exceeded
Forward Air delivered on the targeted $75 million of integration synergies and cost savings from the Omni transaction and is on pace to exceed the initial target.
Operational Improvements and Cost Reductions
The company executed on more than $100 million in annualized savings from synergies and cost-out actions, contributing to a more financially efficient company.
Omni Logistics Segment Performance
The Omni Logistics segment achieved its best quarterly reported EBITDA result since the transaction, showing significant improvement in performance.
Positive Cash Flow Transition
Forward Air inflected to cash flow positive in the second half of 2024, with net cash provided by operating activities amounting to $20 million in the second half.
Lowlights
Expedited Freight Segment Underperformance
The Expedited Freight segment did not meet expectations with income from operations declining compared to the previous year due to a decrease in volume and unfavorable pricing strategy.
Pricing Strategy Challenges
A poor pricing strategy in the Expedited Freight segment led to a decrease in revenue per hundredweight and a mix shift towards less profitable class-based customers.
Sequential Revenue Decline
On a sequential basis, consolidated revenue decreased by 3.5% from $656 million in the previous quarter to $633 million in the fourth quarter.
Interest Expense Impact on Liquidity
The company faced a $60 million interest expense payment in the fourth quarter, contributing to a decrease in liquidity.
Company Guidance
During the Forward Air Fourth Quarter and Full Year 2024 Earnings Conference Call, the company provided several metrics and insights into its performance and future priorities. For the full year 2024, Forward Air reported consolidated EBITDA of $308 million, near the top of its guidance range of $300 million to $310 million. The company achieved $75 million in integration synergies and cost savings from the Omni transaction and aims to exceed this target. The fourth quarter saw consolidated revenue of $633 million, an 87% increase from the prior year, although sequentially it decreased by 3.5%. The Expedited Freight segment faced challenges with a 4.7% reduction in revenue to $266 million, primarily due to a 5.8% decline in revenue per hundredweight and a 4.3% decrease in tonnage per day. Despite these challenges, Forward Air executed cost reduction actions amounting to $100 million in annualized savings. For 2025, the company plans to focus on driving profitable growth, improving IT systems, and establishing a global shared services organization to enhance operational efficiency.Forward Air Corporate Events
Private Placements and FinancingBusiness Operations and Strategy
Forward Air Enhances Financial Flexibility for Growth
Positive
Jan 6, 2025
Forward Air Corporation’s subsidiary, Clue Opco LLC, has amended its Credit Agreement to increase its financial flexibility for future growth. The amendment includes changes to the financial performance covenant, reduction in revolving credit commitments, and new restrictions on certain financial activities, aiming to support the company’s long-term strategic objectives.
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.