Hub Group (HUBG) AI Stock Analysis

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Hub Group

(NASDAQ:HUBG)

67Neutral

Hub Group's overall stock score of 67 reflects a stable financial base with areas for profitability improvement. The company's strategic initiatives, such as cost reductions and joint ventures, are positive signs, but revenue challenges and uncertain market conditions pose risks. The technical analysis suggests mixed signals, and the valuation seems moderate, aligning with the industry averages.

Positive Factors

Intermodal Volume Growth

Hub Group is well positioned for intermodal volume growth given new rail agreements, good cost controls, and solid intermodal service.

Operating Margins

The company delivered a 40-basis point improvement in operating margins in the first quarter.

Negative Factors

Intermodal Revenue

Intermodal revenue per load was down 12% due to mix, price, and fuel.

Intermodal Volume Decline

Reduced west coast imports are expected to lead to lower intermodal volumes in the back half of the second quarter.

Pricing Challenges

Shippers are pushing back more on intermodal rate increases than on TL rates, indicating pricing challenges.

Hub Group (HUBG) vs. S&P 500 (SPY)

Market Cap

$2.18B

Dividend Yield1.41%

Average Volume (3M)630.01K

Price to Earnings (P/E)20.8

Beta (1Y)1.02

Revenue Growth-4.63%

EPS Growth-18.94%

CountryUS

Employees6,386

SectorIndustrials

Sector Strength89

IndustryIntegrated Freight & Logistics

Share Statistics

EPS (TTM)0.44

Shares Outstanding60,691,372

10 Day Avg. Volume808,707

30 Day Avg. Volume630,009

Financial Highlights & Ratios

PEG Ratio-4.88

Price to Book (P/B)1.21

Price to Sales (P/S)0.00

P/FCF Ratio14.05

Enterprise Value/Market Cap1.11

Enterprise Value/Revenue0.15

Enterprise Value/Gross Profit2.30

Enterprise Value/Ebitda1.78

Forecast

1Y Price Target

$40.25

Price Target Upside13.48% Upside

Rating ConsensusHold

Number of Analyst Covering12

Hub Group Business Overview & Revenue Model

Company DescriptionHub Group, Inc. is a leading supply chain solutions provider, offering a comprehensive range of services to enhance the flow of goods across North America. The company operates in the logistics and transportation sectors, providing intermodal, trucking, logistics, and dedicated transportation services. With a focus on delivering value through technology and innovation, Hub Group serves a diverse customer base across various industries, ensuring efficient and reliable transportation solutions.

How the Company Makes MoneyHub Group generates revenue through its diverse portfolio of logistics and transportation services. The primary revenue streams include intermodal services, which involve the transportation of freight in containers using multiple modes of transportation, such as rail and truck; truck brokerage, where the company arranges the transportation of freight by third-party carriers; and logistics services, which encompass supply chain management, warehousing, and distribution solutions. Additionally, Hub Group offers dedicated trucking services, providing customers with fleets and drivers tailored to their specific needs. Key partnerships with railroads, carriers, and technology providers enhance Hub Group's service offerings and contribute to its earnings by enabling efficient operations and expanded service capabilities.

Hub Group Financial Statement Overview

Summary

Hub Group's financial statements reflect a company with a solid base but facing challenges in revenue growth and profitability margins. The balance sheet remains strong, providing stability, while cash flow management shows room for improvement. Focusing on enhancing revenue streams and operational efficiencies could help improve overall financial health and investor appeal.

Income Statement

Positive

Hub Group's income statement shows a mixed performance. The gross profit margin has been consistently high, indicating strong cost management, but net profit margin has decreased over recent years. Revenue has declined, particularly from 2022 to 2024, which could indicate challenges in maintaining sales growth. EBIT and EBITDA margins have also shrunk, suggesting a decrease in operational efficiency. Overall, while the company demonstrates profitability, the declining trend in revenue and margins suggests potential areas for improvement.

Balance Sheet

Positive

The balance sheet of Hub Group reflects a relatively healthy financial position. The debt-to-equity ratio is moderate, showing a cautious approach to leveraging. The equity ratio, indicating financial stability, remains robust. However, the return on equity has declined, which could impact investor confidence. Despite these concerns, the company's equity base is solid, providing a strong foundation for future growth and investment.

Cash Flow

Positive

Hub Group's cash flow statement reveals mixed signals. Operating cash flow remains strong, indicative of good core business performance. However, free cash flow has seen fluctuations, with a notable decrease from 2023 to 2024. The free cash flow to net income ratio suggests variability in converting income into cash. These cash flow dynamics highlight the need for effective cash management strategies to ensure liquidity and support investment opportunities.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
3.95B	4.20B	5.34B	4.23B	3.50B
	Gross Profit
3.37B	503.66M	889.50M	599.64M	425.44M
	EBIT
140.29M	212.23M	474.72M	238.46M	105.83M
	EBITDA
339.57M	391.86M	610.14M	349.91M	230.50M
	Net Income Common Stockholders
103.99M	167.53M	356.95M	171.47M	73.56M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
98.25M	187.27M	286.64M	159.78M	124.51M
	Total Assets
2.87B	2.94B	2.81B	2.44B	2.11B
	Total Debt
508.51M	575.51M	451.74M	322.28M	318.58M
	Net Debt
410.26M	388.25M	165.10M	162.50M	194.07M
	Total Liabilities
1.18B	1.30B	1.21B	1.10B	947.47M
	Stockholders Equity
1.64B	1.63B	1.60B	1.34B	1.16B
Cash Flow		Free Cash Flow
143.57M	282.09M	239.02M	119.88M	59.65M
	Operating Cash Flow
194.42M	422.16M	458.16M	252.84M	174.95M
	Investing Cash Flow
-53.33M	-373.16M	-278.87M	-210.13M	-196.86M
	Financing Cash Flow
-201.33M	-148.41M	-52.46M	-7.41M	-22.30M

Hub Group Technical Analysis

Technical Analysis Sentiment

Positive

Last Price35.47

Price Trends

50DMA

35.02

Positive

100DMA

39.35

Negative

200DMA

42.45

Negative

Market Momentum

MACD

-0.24

Negative

RSI

58.71

Neutral

STOCH

76.25

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HUBG, the sentiment is Positive. The current price of 35.47 is above the 20-day moving average (MA) of 32.63, above the 50-day MA of 35.02, and below the 200-day MA of 42.45, indicating a neutral trend. The MACD of -0.24 indicates Negative momentum. The RSI at 58.71 is Neutral, neither overbought nor oversold. The STOCH value of 76.25 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HUBG.

Hub Group Risk Analysis

Hub Group disclosed 25 risk factors in its most recent earnings report. Hub Group reported the most risks in the “Production” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Hub Group Peers Comparison

Overall Rating

UnderperformOutperform

Sector (64)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GXO	71 Outperform	$4.64B	66.32	2.61%	―	23.40%	-55.55%
CHRW	70 Outperform	$11.43B	23.00	32.11%	2.56%	-0.22%	65.52%
LSTR	69 Neutral	$4.90B	27.80	18.34%	1.00%	-4.72%	-22.46%
JBHT	68 Neutral	$14.61B	26.75	13.97%	1.17%	-3.82%	-12.80%
HUBG	67 Neutral	$2.18B	20.81	6.35%	1.41%	-4.63%	-18.94%
Sector *	64 Neutral	$4.40B	12.09	5.26%	250.03%	4.08%	-11.05%
FWRD	51 Neutral	$575.00M	―	-147.96%	0.86%	50.11%	-682.50%

* Industrials Sector Average

Performance Comparison

HUBG

Hub Group

35.47

-7.32

-17.11%

CHRW

CH Robinson

98.03

16.95

20.91%

FWRD

Forward Air

18.78

3.38

21.95%

JBHT

JB Hunt

147.89

-19.81

-11.81%

LSTR

Landstar System

142.45

-39.65

-21.77%

GXO

GXO Logistics

41.07

-11.59

-22.01%

Hub Group Earnings Call Summary

Earnings Call Date:May 08, 2025

(Q1-2025)

% Change Since: 7.06%|

Next Earnings Date:Jul 24, 2025

Earnings Call Sentiment Neutral

The earnings call presented a mixed picture with strong operational improvements and cost management initiatives, but offset by revenue declines and challenges in specific segments like brokerage. The company's strategic moves, including the EASO joint venture, are positively impacting growth, yet uncertainties in import volumes and market conditions pose potential risks.

Q1-2025 Updates

Positive Updates

Operating Margin Improvement

A 40 basis point improvement in operating margins was achieved during the quarter, indicating efficient cost management and operational improvements.

Intermodal Volume Growth

Intermodal volumes increased by 8% year-over-year due to bid wins, pull-forward of inventory, and benefits from the EASO joint venture.

Cost Reduction Program

Implemented a $40 million cost reduction program, with half of it already executed, focusing on purchase transportation and managing headcount.

Joint Venture Success

The EASO joint venture contributed to significant volume growth in Mexico, with volumes up 4x year-over-year.

Improved Warehouse Utilization

An 1,100 basis point improvement in warehouse utilization year-over-year was achieved after implementing operational efficiency enhancements.

Negative Updates

Revenue Decline

Overall revenue decreased by 8% compared to the previous year, with specific declines in the Logistics segment and lower Intermodal revenue per load.

Challenges in Brokerage

Brokerage revenue declined due to limited spot market opportunities, a decline in rates, and negative mix impacting performance.

Dedicated Volume Declines

Slightly lower revenue driven by declines in dedicated volume due to lower demand and competition with runway truckload services.

Uncertain Import Volumes

There is uncertainty regarding the near-term impact on import volumes to the West Coast, with potential for a slowdown in China imports.

Company Guidance

During the Hub Group's first quarter 2025 earnings call, the company provided guidance indicating an expected full-year EPS range of $1.75 to $2.25 and anticipated revenue between $3.6 billion to $4 billion. The guidance took into account various scenarios for the West Coast import slowdown, considering both quick rebounds and prolonged slowdowns. The call highlighted key performance metrics, such as a 40 basis point improvement in operating margins and an 8% year-over-year increase in Intermodal volumes. Additionally, Hub Group is implementing a $40 million cost reduction program and reported first-quarter revenue of $915 million, a decrease of 8% compared to the previous year. Operating income margin improved to 4.1%, and the company maintained a strong balance sheet with net debt at 0.4 times EBITDA. Capital expenditures for the year are expected to be between $40 million and $50 million.

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.