Forward Air (FWRD) AI Stock Analysis

• Market Cap: $806.22M
• Dividend Yield: 0.86%
• Average Volume (3M): 563.88K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.79
• Revenue Growth: 50.11%
• EPS Growth: -682.50%
• Country: US
• Employees: 6,319
• Sector: Industrials
• Sector Strength: 86
• Industry: Integrated Freight & Logistics
• EPS (TTM): -0.35
• Shares Outstanding: 30,423,222
• 10 Day Avg. Volume: 748,219
• 30 Day Avg. Volume: 563,880
• PEG Ratio: 0.17
• Price to Book (P/B): 3.97
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 12.87
• Enterprise Value/Market Cap: 3.77
• Enterprise Value/Revenue: 0.33
• Enterprise Value/Gross Profit: 9.57
• Enterprise Value/Ebitda: -0.78
• 1Y Price Target: $34.67
• Price Target Upside: 30.83% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4

• Rating: 50 Neutral
• Price Target: $26.00 ▼(-1.89%Downside)

Forward Air's overall stock score is driven by financial challenges and valuation concerns, which are partially offset by positive technical indicators and some operational improvements highlighted in the earnings call. The company's high leverage and negative earnings significantly impact its financial health and valuation, while the technical analysis suggests potential short-term momentum.

Positive Factors

Cost Synergies

The company has achieved its ~$75mm run-rate cost synergy target slightly ahead of schedule and realized additional savings from headcount and terminal consolidation, indicating successful integration efforts.

Management and Strategy

The new management team has successfully mitigated customer attrition, laid a credible go-forward strategy, and made significant progress on integrating the acquired company, reducing risks and providing fundamental upside.

Negative Factors

Market Environment

The LTL market environment remains soft, and the management has a long way to go to repair the business from the actions of the previous management.

Regulatory Impact

The biggest decline out of China is from the cancellation of the de-minimis rule impacting the e-commerce, small parcel business.

Forward Air Business Overview & Revenue Model

Company Description

Forward Air Corporation (FWRD) is a leading asset-light freight and logistics company that specializes in time-definite surface transportation and related logistics services. Operating primarily in North America, Forward Air provides expedited less-than-truckload (LTL) services, truckload services, intermodal drayage, and final mile delivery solutions. Its core offerings cater to businesses requiring reliable, on-time delivery for goods, making it a preferred partner for companies in various sectors, including retail, manufacturing, and e-commerce.

How the Company Makes Money

Forward Air generates revenue through its comprehensive range of logistics services, primarily focusing on expedited less-than-truckload (LTL) services. The company earns money by transporting freight that requires fast, time-definite delivery, often at premium rates compared to standard shipping services. Additionally, Forward Air offers truckload services, where it provides dedicated trucks for larger shipments, and intermodal services, which involve the transportation of goods using multiple modes of transportation, such as trucks and rail. The final mile delivery solutions further enhance its revenue by offering end-to-end logistics services, especially valuable for e-commerce and retail clients. Partnerships with key players in various industries, along with a robust network of transportation hubs and terminals, significantly contribute to Forward Air's earnings by ensuring efficient and widespread service coverage.

Forward Air Financial Statement Overview

Summary

Forward Air is facing financial challenges, with declining profitability and stability issues. The company has high leverage, decreasing stockholders' equity, and volatile operating cash flow, which indicate financial risks and operational inefficiencies.

Income Statement

The income statement reveals declining profitability with a negative net income in TTM (Trailing-Twelve-Months) and the last annual report. Revenue growth is present but overshadowed by significant declines in gross and net profit margins due to rising costs and negative EBIT and EBITDA margins in recent periods.

Balance Sheet

The balance sheet shows high leverage with a debt-to-equity ratio significantly above 1, indicating potential financial risk. Stockholders' equity has decreased substantially over the period, negatively impacting the equity ratio. These factors suggest increased financial instability.

Cash Flow

Cash flow analysis indicates some improvement with positive free cash flow in the TTM period, though operating cash flow remains volatile. The operating cash flow to net income ratio is concerning due to negative net income, suggesting operational challenges.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.55B	2.47B	1.37B	1.97B	1.66B	1.27B
Gross Profit	317.65M	339.65M	330.15M	546.82M	365.33M	229.11M
EBITDA	-921.27M	-916.64M	145.62M	290.14M	198.85M	111.05M
Net Income	-805.89M	-816.97M	167.35M	193.19M	105.86M	52.77M
Balance Sheet
Total Assets	2.80B	2.80B	2.98B	1.21B	1.12B	1.05B
Cash, Cash Equivalents and Short-Term Investments	116.31M	104.90M	121.97M	45.82M	37.32M	40.25M
Total Debt	2.15B	2.15B	1.95B	277.85M	320.07M	243.24M
Total Liabilities	2.58B	2.52B	2.22B	500.83M	524.17M	500.44M
Stockholders Equity	154.63M	201.73M	764.26M	707.24M	593.65M	547.33M
Cash Flow
Free Cash Flow	27.98M	-112.46M	150.66M	218.36M	81.15M	63.84M
Operating Cash Flow	72.35M	-75.40M	181.39M	259.09M	120.26M	84.11M
Investing Cash Flow	-50.37M	-1.61B	174.84M	-104.46M	-88.31M	-82.71M
Financing Cash Flow	-10.43M	-163.83M	1.55B	-146.12M	-34.89M	-26.45M

Forward Air Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 26.50
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FWRD, the sentiment is Positive. The current price of 26.5 is above the 20-day moving average (MA) of 22.28, above the 50-day MA of 19.14, and below the 200-day MA of 27.32, indicating a neutral trend. The MACD of 1.97 indicates Negative momentum. The RSI at 76.86 is Negative, neither overbought nor oversold. The STOCH value of 90.05 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FWRD.

Forward Air Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
XPO	70 Outperform	$15.57B	40.66	26.24%	―	1.94%	60.91%
CHRW	70 Neutral	$11.64B	23.42	32.11%	2.50%	-0.22%	65.52%
HUBG	69 Neutral	$2.19B	20.95	6.35%	1.39%	-4.63%	-18.94%
JBHT	69 Neutral	$15.16B	27.76	13.97%	1.15%	-3.82%	-12.80%
LSTR	66 Neutral	$5.10B	28.93	18.34%	1.10%	-4.72%	-22.46%
Sector *	58 Neutral	$1.34B	4.24	-2.93%	7.38%	3.67%	-51.13%
FWRD	50 Neutral	$806.22M	―	-147.96%	0.86%	50.11%	-682.50%

Forward Air Corporate Events

Forward Air Enhances Financial Flexibility for Growth

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.