tiprankstipranks
Trending News
More News >
Hub Group (HUBG)
NASDAQ:HUBG

Hub Group (HUBG) AI Stock Analysis

Compare
147 Followers

Top Page

HU

Hub Group

(NASDAQ:HUBG)

Rating:69Neutral
Price Target:
$38.00
▲(7.50%Upside)
Hub Group's overall stock score is bolstered by solid financial stability and positive technical momentum. Challenges include high valuation metrics and recent revenue declines, though operational improvements and strategic initiatives provide a potential upside. The new credit agreement further supports future growth prospects.
Positive Factors
Market Positioning
Hub Group is well positioned for a recovery in over-the-road conversions to intermodal given solid rail service and price-effective lanes.
Operating Margins
The company delivered a 40-basis point improvement in operating margins in the first quarter, showcasing enhanced operational efficiency.
Volume Growth
Hub Group had double-digit intermodal volume growth in the Local East and Mexico, leading to 8% intermodal volume growth.
Negative Factors
Import Reductions
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.
Revenue Decline
Intermodal revenue per load was down 12% due to mix, price, and fuel, contributing to a 12% decline.

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

Hub Group Business Overview & Revenue Model

Company DescriptionHub Group, Inc., a supply chain solutions provider, offers transportation and logistics management services in North America. The company's transportation services include intermodal, truckload, less-than-truckload, flatbed, temperature-controlled, and dedicated and regional trucking, as well as final mile, railcar, small parcel, and international transportation. Its logistics services comprise full outsource logistics solution, transportation management, freight consolidation, warehousing and fulfillment, final mile delivery, and parcel and international services. The company also provides dry van, expedited, less-than-truckload, refrigerated, and flatbed truck brokerage services. It offers a fleet of approximately 1,000 tractors and 4,600 trailers to its customers, as well as the driver staffing, management, and infrastructure. The company serves a range of industries, including retail, consumer products, and durable goods. As of December 31, 2021, it owned approximately 43,750 dry, 53-foot containers, as well as 450 refrigerated, 53-foot containers; and leased approximately 250 dry, 53-foot containers. The company was founded in 1971 and is headquartered in Oak Brook, Illinois.
How the Company Makes MoneyHub Group generates revenue primarily through its intermodal and logistics services. The intermodal segment is a major revenue stream, involving the transportation of freight via rail and truck, offering clients an efficient and cost-effective solution for long-distance shipping. In addition to intermodal services, the company earns income from its truck brokerage operations, where it acts as an intermediary to match shippers with carriers. Hub Group also provides comprehensive logistics management services, including transportation management, supply chain optimization, and technology solutions. Key partnerships with railroads and a dedicated network of carriers enhance its service offerings, contributing significantly to its earnings. The company's ability to adapt to market demands and provide integrated logistics solutions supports its financial performance.

Hub Group Earnings Call Summary

Earnings Call Date:May 08, 2025
(Q1-2025)
|
% Change Since: 7.12%|
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.

Hub Group Financial Statement Overview

Summary
Hub Group demonstrates a solid financial foundation with strengths in balance sheet stability and cash flow generation. However, profitability metrics reveal potential areas for improvement, and recent revenue declines suggest challenges in sustaining growth. The company maintains a conservative leverage position and strong equity support, providing a buffer against potential fluctuations.
Income Statement
65
Positive
The company exhibits moderate profitability with a gross profit margin of 45.1% and a net profit margin of 2.7% for TTM (Trailing-Twelve-Months). However, revenue has decreased by 1.2% compared to the previous annual period, indicating a slight decline. EBIT and EBITDA margins are at 3.6% and 8.1% respectively, which are relatively low, suggesting room for operational efficiency improvements.
Balance Sheet
72
Positive
The balance sheet shows a stable financial position with a debt-to-equity ratio of 0.29, indicating low leverage. The return on equity stands at 6.3%, reflecting moderate returns to shareholders. The equity ratio is 58.4%, suggesting a strong equity base relative to assets, which provides financial stability.
Cash Flow
68
Positive
The company has a solid cash flow profile with an operating cash flow to net income ratio of 1.77, indicating strong cash generation relative to reported earnings. However, the free cash flow decreased by 8.5% compared to the previous annual period, which could impact future investments. The free cash flow to net income ratio of 1.27 suggests good cash flow coverage of net income.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue3.86B3.95B4.20B5.34B4.23B3.50B
Gross Profit1.74B3.37B503.66M889.50M599.64M425.44M
EBITDA314.08M339.57M391.86M610.14M349.91M230.50M
Net Income103.79M103.99M167.53M356.95M171.47M73.56M
Balance Sheet
Total Assets2.82B2.87B2.94B2.81B2.44B2.11B
Cash, Cash Equivalents and Short-Term Investments112.67M98.25M187.27M286.64M159.78M124.51M
Total Debt485.45M508.51M575.51M451.74M322.28M318.58M
Total Liabilities1.17B1.18B1.30B1.21B1.10B947.47M
Stockholders Equity1.65B1.64B1.63B1.60B1.34B1.16B
Cash Flow
Free Cash Flow131.43M143.57M282.09M239.02M119.88M59.65M
Operating Cash Flow183.94M194.42M422.16M458.16M252.84M174.95M
Investing Cash Flow-54.81M-53.33M-373.16M-278.87M-210.13M-196.86M
Financing Cash Flow-183.29M-201.33M-148.41M-52.46M-7.41M-22.30M

Hub Group Technical Analysis

Technical Analysis Sentiment
Positive
Last Price35.35
Price Trends
50DMA
33.66
Positive
100DMA
35.45
Negative
200DMA
40.50
Negative
Market Momentum
MACD
0.43
Negative
RSI
57.93
Neutral
STOCH
65.58
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 35.35 is above the 20-day moving average (MA) of 33.87, above the 50-day MA of 33.66, and below the 200-day MA of 40.50, indicating a neutral trend. The MACD of 0.43 indicates Negative momentum. The RSI at 57.93 is Neutral, neither overbought nor oversold. The STOCH value of 65.58 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 1 New Risks
1.
We are subject to certain risks arising from doing business in Mexico. Q4, 2024

Hub Group Peers Comparison

Overall Rating
UnderperformOutperform
Sector (65)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
GXGXO
74
Outperform
$5.71B80.572.61%23.40%-55.55%
70
Neutral
$11.48B23.1132.11%2.53%-0.22%65.52%
69
Neutral
$2.13B20.386.35%1.40%-4.63%-18.94%
69
Neutral
$14.84B27.1613.97%1.15%-3.82%-12.80%
66
Neutral
$4.98B28.2718.34%1.10%-4.72%-22.46%
65
Neutral
$10.75B15.695.29%1.89%3.09%-27.41%
51
Neutral
$815.65M-147.96%0.86%50.11%-682.50%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
HUBG
Hub Group
35.35
-5.41
-13.27%
CHRW
CH Robinson
98.33
13.90
16.46%
FWRD
Forward Air
27.60
8.95
47.99%
JBHT
JB Hunt
153.05
-0.84
-0.55%
LSTR
Landstar System
143.16
-26.51
-15.62%
GXO
GXO Logistics
50.24
2.05
4.25%

Hub Group Corporate Events

Private Placements and FinancingBusiness Operations and Strategy
Hub Group Enters New Credit Agreement with BMO
Positive
Jun 26, 2025

On June 20, 2025, Hub Group, Inc. entered into a new Credit Agreement with Bank of Montreal and several financial institutions, replacing the 2022 Credit Agreement. The company successfully terminated the previous agreement without incurring any early termination penalties and repaid all outstanding borrowings, which may enhance its financial flexibility and strengthen its market position.

The most recent analyst rating on (HUBG) stock is a Hold with a $52.00 price target. To see the full list of analyst forecasts on Hub Group stock, see the HUBG Stock Forecast page.

Executive/Board ChangesShareholder Meetings
Hub Group Holds Annual Meeting, Elects Directors
Neutral
May 15, 2025

On May 13, 2025, Hub Group, Inc. held its Annual Meeting at its headquarters in Oak Brook, Illinois, where stockholders voted on key proposals. The election of directors saw all ten nominees elected, while the compensation of executive officers was approved on an advisory basis. Additionally, the appointment of Ernst & Young LLP as the independent auditor for the fiscal year ending December 31, 2025, was ratified, indicating continued confidence in the company’s governance and financial oversight.

The most recent analyst rating on (HUBG) stock is a Hold with a $52.00 price target. To see the full list of analyst forecasts on Hub Group stock, see the HUBG Stock Forecast page.

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 02, 2025