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Schneider's (SNDR) Shares Plunge 11% in a Year: Here's Why

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 Shares of Schneider National (SNDR - Free Report) have lost 10.7% against the industry's 5.2% rise in a year’s time. The below-par performance was primarily caused by unfavorable pricing and closure of First to Final Mile (“FTFM”) operations.

Let’s take a look at the factors that are responsible for the dismal price performance.

Revenues in the truckload segment declined (8.3% in 2019) due to lower freight demand against higher truck capacity. Also, revenues in the logistics unit fell 8.7% in 2019. Moreover, this situation is unlikely to improve in the near term.

Additionally, closure of FTFM operations within the truckload unit is limiting bottom-line growth due to increased costs. Moreover, the return on equity (expressed as a percentage) for the company is currently 10 compared with 15.6 for its industry. This indicates that the company does not utilize shareholders’ funds efficiently.

Deterioration in operating ratio (operating expenses as a percentage of revenues) is also a concern. Evidently, the metric (on an adjusted basis) came in at 95.6% in 2019 compared with 92.4% in 2018.

Also, the company has an unimpressive record with respect to earnings per share. Schneider has trailing four-quarter negative earnings surprise of 12.2%, on average.

Negative Estimate Revisions and Zacks Rank

The pessimism surrounding the stock is evident from the Zacks Consensus Estimate for current-year earnings being revised downward by 5.9% in the past 60 days to $1.28.

Additionally, Schneider National carries a Zacks Rank #4 (Sell).

Stocks to Consider

Few better-ranked stocks in the Zacks Transportation sector are Ryanair Holdings RYAAY , Costamare CMRE and Azul S.A(AZUL - Free Report) , each sporting a Zacks Rank #1 (Strong Buy).  You can see the complete list of today’s Zacks #1 Rank stocks here

Shares of Ryanair, Costamare and Azul have increased more than 3%, 21% and 46%, respectively, in a year.

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