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Here's Why Investors Should Give Schneider (SNDR) a Miss
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Schneider National (SNDR - Free Report) faces challenges, such as lower pricing, revenue per order and brokerage volume. Moreover, investor worries escalate as liquidity concerns persist, leading to the stock's decline in the past year.
Let’s delve deeper.
Southward Earnings Estimate Revision: The Zacks Consensus Estimate for current-quarter earnings has been revised 11.11% downward over the past 60 days. For the current year, the consensus mark for earnings has moved 17.93% south in the same time frame. The unfavorable estimate revisions indicate brokers’ lack of confidence in the stock.
Unimpressive Price Performance: Schneider has declined 14% in the past year but surpassed its industry’s decrease of 2%.
Image Source: Zacks Investment Research
Weak Zacks Rank: SNDR currently carries a Zacks Rank #5 (Strong Sell).
Other Headwinds: SNDR’s fourth-quarter 2023 earnings fell short of expectations, declining by 75% compared to the previous year. While operating revenues slightly exceeded estimates, they still dropped by 12.1% year over year. The substantial 78% decrease in adjusted income from operations and operating ratio raises concerns about the company's financial and operational health.
Moreover, Schneider's liquidity concerns loom large as it closed the fourth quarter of 2023 with $102.4 million in cash and equivalents, significantly less than its long-term debt of $197.6 million. This shortfall implies that the company may struggle to meet its debt obligations.
Bearish Industry Rank: The industry to which SNDR belongs currently has a Zacks Industry Rank of 234 (250 plus groups). Such an unfavorable rank places SNDR in the bottom 7% of Zacks Industries.Studies show that 50% of a stock price movement is directly related to the performance of the industry group it belongs to.
A mediocre stock within a strong group is likely to outclass a robust stock in a weak industry. Therefore, reckoning the industry’s performance becomes imperative.
AL has an encouraging track record with respect to earnings surprise, having surpassed the Zacks Consensus Estimate in each of the trailing four quarters. The average beat is 20.15%. AL currently carries Zacks Rank #2 (Buy). Continuous fleet growth and increased sales activity are boosting Air Lease's revenues.
The Zacks Consensus Estimate for 2024 earnings has been revised 25.80% upward over the past 60 days. The company has an expected earnings growth rate of 30% for 2024. Shares of AL have rallied 31% in the past year.
SKYW sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. SkyWest's fleet modernization efforts are commendable. The Zacks Consensus Estimate for SKYW’s 2024 earnings has improved 19.22% over the past 60 days. Shares of SkyWest have surged 211.4% in the past year.
SKYW has an expected earnings growth rate of more than 100% for 2024. The company delivered a trailing four-quarter earnings surprise of 128.02%, on average.
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Here's Why Investors Should Give Schneider (SNDR) a Miss
Schneider National (SNDR - Free Report) faces challenges, such as lower pricing, revenue per order and brokerage volume. Moreover, investor worries escalate as liquidity concerns persist, leading to the stock's decline in the past year.
Let’s delve deeper.
Southward Earnings Estimate Revision: The Zacks Consensus Estimate for current-quarter earnings has been revised 11.11% downward over the past 60 days. For the current year, the consensus mark for earnings has moved 17.93% south in the same time frame. The unfavorable estimate revisions indicate brokers’ lack of confidence in the stock.
Unimpressive Price Performance: Schneider has declined 14% in the past year but surpassed its industry’s decrease of 2%.
Image Source: Zacks Investment Research
Weak Zacks Rank: SNDR currently carries a Zacks Rank #5 (Strong Sell).
Other Headwinds: SNDR’s fourth-quarter 2023 earnings fell short of expectations, declining by 75% compared to the previous year. While operating revenues slightly exceeded estimates, they still dropped by 12.1% year over year. The substantial 78% decrease in adjusted income from operations and operating ratio raises concerns about the company's financial and operational health.
Moreover, Schneider's liquidity concerns loom large as it closed the fourth quarter of 2023 with $102.4 million in cash and equivalents, significantly less than its long-term debt of $197.6 million. This shortfall implies that the company may struggle to meet its debt obligations.
Bearish Industry Rank: The industry to which SNDR belongs currently has a Zacks Industry Rank of 234 (250 plus groups). Such an unfavorable rank places SNDR in the bottom 7% of Zacks Industries.Studies show that 50% of a stock price movement is directly related to the performance of the industry group it belongs to.
A mediocre stock within a strong group is likely to outclass a robust stock in a weak industry. Therefore, reckoning the industry’s performance becomes imperative.
Stocks to Consider
Investors interested in the broader Transportation sector may consider stocks like Air Lease (AL - Free Report) and SkyWest (SKYW - Free Report) .
AL has an encouraging track record with respect to earnings surprise, having surpassed the Zacks Consensus Estimate in each of the trailing four quarters. The average beat is 20.15%. AL currently carries Zacks Rank #2 (Buy). Continuous fleet growth and increased sales activity are boosting Air Lease's revenues.
The Zacks Consensus Estimate for 2024 earnings has been revised 25.80% upward over the past 60 days. The company has an expected earnings growth rate of 30% for 2024. Shares of AL have rallied 31% in the past year.
SKYW sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. SkyWest's fleet modernization efforts are commendable. The Zacks Consensus Estimate for SKYW’s 2024 earnings has improved 19.22% over the past 60 days. Shares of SkyWest have surged 211.4% in the past year.
SKYW has an expected earnings growth rate of more than 100% for 2024. The company delivered a trailing four-quarter earnings surprise of 128.02%, on average.