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TFI International (TSE:TFII)
TSX:TFII
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TFI International
(TSX:TFII)66Neutral
Positive Factors
Growth Potential
TFII's strong M&A track record and robust pipeline of opportunities highlight management's focus on acquisitions as a key growth area.
Negative Factors
Financial Performance
TFII's 3Q24 adjusted EPS missed expectations due to challenges in its Truckload and U.S. Less-than-Truckload segments.
Operational Challenges
TFII is facing significant challenges at Tforce freight, with a reset of margin expectations and a worsening claims ratio, leading to customer loss.
TFI International (TFII) vs. S&P 500 (SPY)
Market Cap
$11.07B
Dividend Yield1.93%
Average Volume (3M)252.25K
Price to Earnings (P/E)19.2
Beta (1Y)1.22
Revenue Growth13.32%
EPS Growth-13.75%
CountryCA
Employees28,230
SectorIndustrials
Sector Strength66
IndustryTransportation
Share Statistics
EPS (TTM)6.84
Shares Outstanding84,408,440
10 Day Avg. Volume526,974
30 Day Avg. Volume252,247
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.93
Price to Cash Flow (P/CF)7.40
P/FCF Ratio9.30
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$190.95Price Target Upside52.75% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering16
TFI International Business Overview & Revenue Model
Company DescriptionTFI International Inc. is a leading North American transportation and logistics company, operating across multiple sectors including package and courier, less-than-truckload, truckload, and logistics and last mile. Headquartered in Montreal, Canada, TFI International is known for its comprehensive range of services that cater to diverse freight transportation needs, enabling the efficient movement of goods across Canada, the United States, and Mexico.
How the Company Makes MoneyTFI International generates revenue through a diversified portfolio of transportation and logistics services. Its key revenue streams include package and courier services, which involve the rapid and efficient delivery of parcels; less-than-truckload (LTL) services, which consolidate shipments from multiple customers into a single truckload; and truckload services, which provide dedicated transportation for larger shipments. Additionally, the company benefits from its logistics and last mile segment, offering integrated supply chain solutions and final delivery services to consumers. TFI International's strategic acquisitions and partnerships further enhance its capabilities and market reach, allowing it to leverage economies of scale and optimize its operational efficiency, thus contributing to its overall earnings.
TFI International Financial Statement Overview
Summary
TFI International demonstrates strong financial health with robust profitability and efficient cash flow generation. The company shows effective cost management, though there's a need for revenue growth management and equity strengthening.Income Statement
TFI International shows strong financial performance with a healthy gross profit margin of 14.9% and a solid net profit margin of 5.0% in 2024. Despite a slight decline in revenue from the previous year, the company maintains robust profitability. The EBIT margin is 8.6%, indicating effective cost management. However, the EBITDA margin of 15.4% highlights good operational efficiency but suggests room for improvement in managing operating expenses.81
Very Positive
Balance Sheet
The balance sheet indicates moderate leverage with a debt-to-equity ratio of 1.12, suggesting a balanced use of debt and equity financing. The return on equity is 15.8%, reflecting good profitability relative to shareholder investments. An equity ratio of 37.4% showcases a solid equity base, although there is potential to strengthen the equity position to mitigate financial risk.76
Positive
Cash Flow
Cash flow analysis reveals a healthy operating cash flow to net income ratio of 2.5, indicating efficient cash generation from operations. The free cash flow to net income ratio stands at 1.6, underscoring strong cash flow relative to net earnings. The free cash flow growth rate of 2.2% suggests steady cash flow generation, with room for accelerated growth.79
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 8.40B | 7.52B | 8.81B | 7.22B | 3.78B | Gross Profit |
| 1.25B | 1.27B | 1.43B | 1.04B | 541.88M | EBIT |
| 718.96M | 757.63M | 1.15B | 662.65M | 416.57M | EBITDA |
| 1.29B | 1.19B | 2.05B | 1.72B | 963.52M | Net Income Common Stockholders |
| 422.48M | 504.88M | 823.23M | 754.40M | 275.68M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 0.00 | 335.56M | 147.12M | 19.29M | 4.30M | Total Assets |
| 7.15B | 6.28B | 5.51B | 5.75B | 3.85B | Total Debt |
| 2.98B | 2.34B | 1.73B | 2.04B | 1.23B | Net Debt |
| 2.98B | 2.01B | 1.58B | 2.02B | 1.22B | Total Liabilities |
| 4.47B | 3.69B | 3.04B | 3.53B | 2.06B | Stockholders Equity |
| 2.67B | 2.59B | 2.46B | 2.22B | 1.79B |
| Cash Flow | Free Cash Flow | |||
| 663.56M | 649.52M | 614.70M | 579.55M | 466.49M | Operating Cash Flow |
| 1.06B | 1.01B | 971.64M | 855.35M | 610.86M | Investing Cash Flow |
| -1.24B | -797.33M | 223.42M | -1.16B | -378.48M | Financing Cash Flow |
| -164.44M | -28.07M | -1.07B | 322.30M | -228.08M |
TFI International Technical Analysis
Negative
125.01
Price Trends
181.11
Negative
190.94
Negative
192.79
Negative
Market Momentum
-18.49
Positive
12.94
Positive
5.09
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:TFII, the sentiment is Negative. The current price of 125.01 is below the 20-day moving average (MA) of 160.18, below the 50-day MA of 181.11, and below the 200-day MA of 192.79, indicating a bearish trend. The MACD of -18.49 indicates Positive momentum. The RSI at 12.94 is Positive, neither overbought nor oversold. The STOCH value of 5.09 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:TFII.
TFI International Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Performance Comparison
TSE:TFII
TFI International
118.37
-80.32
-40.43%
TSE:SMT
Sierra Metals
0.74
0.00
0.00%
TSE:WTE
Westshore Terminals
23.90
0.51
2.18%
TFI International Earnings Call Summary
Earnings Call Date: Feb 19, 2025 | % Change Since: -31.13% | Next Earnings Date: Apr 29, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted TFI International's ability to maintain strong free cash flow and revenue growth despite challenging industry conditions, particularly in the LTL segment. However, significant declines in operating income and adjusted net income, coupled with ongoing challenges in the U.S. LTL segment and logistics revenue, indicate ongoing struggles. The company is focused on leveraging its strategic initiatives and cost management, but the outlook remains cautious due to market uncertainties.Highlights
Strong Free Cash Flow
TFI International produced strong free cash flow of more than $200 million during the quarter, bringing the full year total to over $750 million, marking the third consecutive year achieving this despite industry challenges.
Revenue Growth
Total revenue before fuel surcharge grew 9% year-over-year to $1.8 billion, benefiting from the acquisition of Daseke.
LTL Segment Performance
LTL revenue before fuel surcharge was up 10% to $737 million, and operating income increased by 34% despite higher accident-related costs, showing resilience in this segment.
Debt Reduction
TFI International reduced debt by $156 million during the quarter, contributing to a funded debt-to-EBITDA ratio of 2.1 by year-end.
Increased Dividend and Share Repurchase
The Board declared a 13% increase in the quarterly dividend to $0.45 per share, and the company repurchased $42.4 million worth of shares.
Lowlights
Decline in Operating Income
Operating income decreased from $198 million to $160 million year-over-year, reflecting a decline in operating margin from 11.8% to 8.8%.
Reduced Adjusted Net Income
Adjusted net income fell to $102 million from $148 million in the prior year, with adjusted EPS dropping from $1.71 to $1.19.
Challenges in U.S. LTL Segment
The U.S. LTL segment faced issues with high accident-related expenses and a decline in shipment volumes, impacting profitability.
Logistics Revenue Decline
The Logistics segment revenue decreased to $410 million from $472 million, with operating income down to $43 million from $55 million.
Ongoing Freight Volume Slump
The industry-wide slump in freight volumes continued, affecting overall performance and outlook.
Company Guidance
During TFI International's Fourth Quarter 2024 Results Conference Call, the company provided several financial metrics and guidance insights. In Q4, total revenue before fuel surcharge rose by 9% to $1.8 billion, partly due to the Daseke acquisition. However, operating income declined to $160 million from $198 million, resulting in an operating margin decrease from 11.8% to 8.8%. Adjusted net income fell to $102 million from $148 million, with adjusted EPS down to $1.19 from $1.71. Notably, accident-related expenses increased by $9 million compared to the prior year. The free cash flow for the quarter was $208 million, down from $244 million the previous year. TFI International's LTL segment, which made up 40% of revenue before fuel surcharge, saw a 10% increase in revenue to $737 million. The adjusted LTL operating ratio worsened to 90.3% from 86.1%. The truckload segment benefited from the Daseke acquisition, growing revenue to $693 million with an operating ratio of 91.5% from 87.3% the previous year. The logistics segment, however, saw a decline in revenue to $410 million and an operating margin drop to 10.5% from 11.6%. Additionally, TFI reduced its debt by $156 million, ending the year with a funded debt-to-EBITDA ratio of 2.1. The company also announced a 13% increase in its quarterly dividend to $0.45 per share and repurchased $42.4 million worth of shares. Looking ahead to 2025, TFI International expressed caution due to ongoing freight recession challenges and did not provide formal guidance, indicating an expected difficult year with potential EPS in the range of $5.75 to $6.00, similar to 2024.TFI International Corporate Events
Business Operations and Strategy
TFI International Retains Canadian Corporation Status
Neutral
Feb 24, 2025
TFI International Inc. announced it will retain its Canadian corporation status, reversing its previous plan to re-domicile to the United States. This decision was influenced by shareholder feedback, highlighting the company’s responsiveness to stakeholder concerns and its commitment to maintaining its current operational and market positioning.
TFI International Increases Quarterly Dividend by 13%
Dec 16, 2024
TFI International has announced a 13% increase in its quarterly dividend, raising it to US $0.45 per share, payable in January 2025. As a leader in North American transportation and logistics, TFI International continues to create value for shareholders through strategic growth and efficient operations.
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.