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Forward Air Corp. (FWRD)
NASDAQ:FWRD

Forward Air (FWRD) AI Stock Analysis

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Forward Air

(NASDAQ:FWRD)

Rating:50Neutral
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 (FWRD) vs. SPDR S&P 500 ETF (SPY)

Forward Air Business Overview & Revenue Model

Company DescriptionForward 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 MoneyForward 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 Earnings Call Summary

Earnings Call Date:May 07, 2025
(Q1-2025)
|
% Change Since: 53.80%|
Next Earnings Date:Jul 31, 2025
Earnings Call Sentiment Neutral
The earnings call reflected a mix of positive and negative aspects. On the positive side, there were improvements in EBITDA, free cash flow, and specific segment performances like Intermodal. However, these were offset by revenue declines in the Expedited Freight segment and ongoing market uncertainties. While there were notable achievements, the challenges and uncertainties suggest a cautious outlook.
Q1-2025 Updates
Positive Updates
Increase in EBITDA and Free Cash Flow
Consolidated EBITDA reported at $69 million, up from $63 million a year ago. The last 12 months consolidated EBITDA was $313 million. Positive free cash flow generated, increasing liquidity by $11 million to $393 million.
Improvement in Expedited Freight Segment
Corrective pricing strategies led to an improvement in the Expedited Freight segment with an EBITDA margin of 10.4%, up almost 400 basis points from last quarter.
Growth in Intermodal Segment
Intermodal segment revenue increased by 11% to $62 million due to a 7.4% increase in revenue per shipment and a 2.9% increase in the number of shipments.
Sales and Revenue Transparency
Detailed revenue breakdown by service and region was provided, enhancing transparency into business operations. Approximately 70% of business was from ground transportation in North America.
Negative Updates
Decrease in Expedited Freight Revenue
Revenue at Expedited Freight decreased by 8.8% to $249 million, driven by a 10.9% decrease in year-over-year tonnage per day.
Sequential Revenue Decline
Consolidated revenue decreased 3.1% or $20 million from $633 million in the fourth quarter of last year to $613 million this quarter.
Ongoing Market Uncertainties
Concerns about macroeconomic headwinds and their potential impact on future performance were highlighted, with uncertain impacts from potential tariff changes.
Company Guidance
During the Forward Air's First Quarter 2025 earnings call, the company provided several key metrics and guidance for the future. They reported a consolidated EBITDA of $69 million, up from $63 million a year ago, maintaining the same level as the previous quarter. They achieved a 10.4% EBITDA margin for the quarter, improving by almost 400 basis points from the last quarter. Free cash flow was positive, and liquidity increased by $11 million to $393 million. The company aims to double its revenue from $2.5 billion to $5 billion over the next five years, contingent on a return to a normal freight environment. They are focused on integrating two legacy companies to streamline operations and support growth. Approximately 70% of their 2024 revenue was from ground transportation, and the company is working on improving the Expedited Freight segment's margin. They also plan to increase transparency by transitioning to reporting financial results by service.

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
45
Neutral
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
40
Negative
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
50
Neutral
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.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue2.55B2.47B1.37B1.97B1.66B1.27B
Gross Profit317.65M339.65M330.15M546.82M365.33M229.11M
EBITDA-921.27M-916.64M145.62M290.14M198.85M111.05M
Net Income-805.89M-816.97M167.35M193.19M105.86M52.77M
Balance Sheet
Total Assets2.80B2.80B2.98B1.21B1.12B1.05B
Cash, Cash Equivalents and Short-Term Investments116.31M104.90M121.97M45.82M37.32M40.25M
Total Debt2.15B2.15B1.95B277.85M320.07M243.24M
Total Liabilities2.58B2.52B2.22B500.83M524.17M500.44M
Stockholders Equity154.63M201.73M764.26M707.24M593.65M547.33M
Cash Flow
Free Cash Flow27.98M-112.46M150.66M218.36M81.15M63.84M
Operating Cash Flow72.35M-75.40M181.39M259.09M120.26M84.11M
Investing Cash Flow-50.37M-1.61B174.84M-104.46M-88.31M-82.71M
Financing Cash Flow-10.43M-163.83M1.55B-146.12M-34.89M-26.45M

Forward Air Technical Analysis

Technical Analysis Sentiment
Positive
Last Price26.50
Price Trends
50DMA
19.14
Positive
100DMA
20.10
Positive
200DMA
27.32
Negative
Market Momentum
MACD
1.97
Negative
RSI
76.86
Negative
STOCH
90.05
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 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 (58)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
XPXPO
70
Outperform
$15.57B40.6626.24%1.94%60.91%
70
Neutral
$11.64B23.4232.11%2.50%-0.22%65.52%
69
Neutral
$2.19B20.956.35%1.39%-4.63%-18.94%
69
Neutral
$15.16B27.7613.97%1.15%-3.82%-12.80%
66
Neutral
$5.10B28.9318.34%1.10%-4.72%-22.46%
58
Neutral
$1.34B4.24-2.93%7.38%3.67%-51.13%
50
Neutral
$806.22M-147.96%0.86%50.11%-682.50%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
FWRD
Forward Air
26.50
7.17
37.09%
CHRW
CH Robinson
98.03
13.53
16.01%
XPO
XPO
132.13
28.22
27.16%
HUBG
Hub Group
35.76
-5.76
-13.87%
JBHT
JB Hunt
152.88
-3.49
-2.23%
LSTR
Landstar System
145.88
-28.67
-16.43%

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
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 03, 2025