(SAIA - Free Report
) shares have soared nearly 78% in the last 6 months, as this trucking company hitches up to the economic recovery. Late April saw a strong first-quarter report for this Zacks #1 Rank (Strong Buy) that included a positive EPS surprise of 100% and double digit revenue growth, leading to upward earnings estimate revisions in the past week.
Earnings per share of 34 cents in the first quarter easily beat last years 4 cents and doubled the Zacks Consensus Estimate of 17 cents. Revenue increased 10.6% to $268.7 million, and was almost in line with the Zacks Consensus Estimate. The outperformance came on the back of improved demand thanks to year-over-year increases of 2.6% in less-than-truckload (LTL) tonnage and 3.3% in average weight per shipment.
Higher prices and fuel surcharge increased LTL yield by 7.9% year over year. Quarterly operating ratio (operating expenses divided by revenue) improved to 95.9 from 98.3.
Earnings Estimates Are Climbing
The Zacks Consensus Estimate for 2012 has moved up by 5.4% in just the past seven days to $1.36. It is up more than 19% from 30 days ago as five out of seven estimates were revised upward.
The Zacks Consensus Estimate for 2013 has moved higher by nearly 3% in seven days and almost 15% in 30 days to $1.79. This suggests the potential for year-over-year profit growth of 31.97%.
Valuation Looks Attractive
Saia Inc. is currently trading at attractive multiples with respect to several valuation metrics. It has a forward P/E of 15.18x, whereas its peers trade at a forward P/E of 16.57x. Similarly, on a price-to-book basis, Saia Inc. currently trades at 1.46x compared with 2.05x of its peer group average. However, the company has a 1-year ROE of 7.4%, which is 36% below its peers.
Market Performance & Technical
Shares of Saia Inc. have soared nearly 78% in the last 6 months, and recently reached its 52-week high. The stock price of Saia Inc. is consistently beating the 200-day moving average from January 10, 2012. Also, it has remained above the 50-day moving average since the middle of December 2011. Volume is fairly strong, averaging roughly 265,000 daily.
The price chart remains significantly above the S&P 500 average from early January. The year-to-date return of the stock is over 57% compared with the S&P 500s return of 6.34%. The difference between the return from Saia and S&P 500 has widened significantly ever since the company reported its first-quarter 2012 financial results. During the short-period between April 26, 2012 and May 10, 2012, the return for Saia was 23.2%, whereas the S&P 500s return was a negative 3%.
Headquartered in Georgia, Saia Inc., is a trucking transportation company in the U.S. providing regional, interregional and national LTL service in 34 states. It was formerly known as SCS Transportation Inc. and was founded in 2000. The company has a network of 148 terminals servicing primarily retail, chemical, and manufacturing industries. Saia competes with other LTL operators, such as YRC Worldwide Inc. (YRCW) and Con-way Inc. (CNW).