Forward Air (FWRD) AI Stock Analysis

• Market Cap: $620.63M
• Dividend Yield: 0.86%
• Average Volume (3M): 548.44K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.76
• Revenue Growth: 50.11%
• EPS Growth: -682.50%
• Country: US
• Employees: 6,319
• Sector: Industrials
• Sector Strength: 87
• Industry: Integrated Freight & Logistics
• EPS (TTM): -0.35
• Shares Outstanding: 30,423,222
• 10 Day Avg. Volume: 475,341
• 30 Day Avg. Volume: 548,441
• 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: 4.90
• Enterprise Value/Revenue: 0.33
• Enterprise Value/Gross Profit: 9.57
• Enterprise Value/Ebitda: -0.78
• 1Y Price Target: $32.00
• Price Target Upside: 58.34% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 4

• Rating: 50 Neutral
• Price Target: $20.50 ▲(1.43%Upside)

Forward Air's overall stock score reflects significant financial challenges with declining profitability and high leverage. While there is some positive price momentum and improved cash flow, the negative P/E ratio and mixed earnings call results suggest caution. The company needs to address these financial risks to improve its stock attractiveness.

Positive Factors

Cost Savings

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 Performance

The legacy Expedited Freight business improved materially with an EBITDA margin of 10.4%, a 380-bps improvement from the previous quarter.

Liquidity

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

Forecasting Challenges

There was little in the way of forward guidance which makes forecasting difficult.

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.

Strategic Review

Activist shareholders are getting impatient with the lack of any results from the strategic review announced earlier.

Forward Air Business Overview & Revenue Model

Company Description

Forward Air Corporation, together with its subsidiaries, operates as an asset-light freight and logistics company in the United States and Canada. It operates in two segments, Expedited Freight and Intermodal. The Expedited Freight segment provides expedited regional, inter-regional, and national less-than-truckload services; local pick-up and delivery services; and other services, which include final mile, truckload, shipment consolidation and deconsolidation, warehousing, customs brokerage, and other handling. This segment also offers expedited truckload brokerage, dedicated fleet, and high security and temperature-controlled logistics services. The Intermodal segment provides intermodal container drayage services; and contract, and container freight station warehouse and handling services. It serves freight forwarders, third-party logistics companies, integrated air cargo carriers and passenger, passenger and cargo airlines, steamship lines, and retailers. Forward Air Corporation was founded in 1981 and is headquartered in Greeneville, Tennessee.

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
	EBIT
21.21M	-1.06B	88.21M	265.98M	159.30M	73.92M
	EBITDA
-921.27M	-916.64M	145.62M	290.14M	198.85M	111.05M
	Net Income Common Stockholders
-805.89M	-816.97M	167.35M	193.19M	105.86M	52.77M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
116.31M	104.90M	121.97M	45.82M	37.32M	40.25M
	Total Assets
2.80B	2.80B	2.98B	1.21B	1.12B	1.05B
	Total Debt
2.15B	2.15B	1.95B	277.85M	320.07M	243.24M
	Net Debt
2.04B	2.04B	1.82B	232.03M	282.75M	202.98M
	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: 20.21
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

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 20.21 is above the 20-day moving average (MA) of 18.15, above the 50-day MA of 16.59, and below the 200-day MA of 27.92, indicating a neutral trend. The MACD of 0.72 indicates Negative momentum. The RSI at 64.61 is Neutral, neither overbought nor oversold. The STOCH value of 78.77 is Neutral, 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
CHRW	71 Outperform	$11.11B	22.35	32.11%	2.65%	-0.22%	65.52%
LSTR	70 Outperform	$4.81B	27.29	18.34%	1.16%	-4.72%	-22.46%
JBHT	67 Neutral	$13.87B	25.39	13.97%	1.26%	-3.82%	-12.80%
HUBG	67 Neutral	$2.01B	19.27	6.35%	1.52%	-4.63%	-18.94%
Sector *	66 Neutral	$4.47B	12.22	5.40%	3.65%	4.14%	-12.00%
XPO	62 Neutral	$14.19B	37.06	26.24%	―	1.94%	60.91%
FWRD	50 Neutral	$620.63M	―	-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.