Stifel, a financial services firm, adjusted its outlook on Saia Inc. (NASDAQ: NASDAQ:SAIA), a leading transportation company, by reducing its price target to $440 from the previous $475.
However, Stifel continues to recommend a Buy rating on the stock.
Saia reported second-quarter adjusted earnings per share (EPS) of $3.83, which fell short of the consensus estimate of $4.01 and Stifel's own target of $3.92. This shortfall was primarily attributed to an increase in lighter freight during the bid season and higher network investments. Following the earnings miss, Saia's shares plummeted nearly 20%, said an analyst from Stifel.
The reduced margin outlook contributed to the stock's decline. Market participants have been closely monitoring transportation companies with higher multiples, especially when faced with soft volume environments.
Meanwhile, TD Cowen also reduced Saia's price target from $475 to $416, while maintaining a Hold rating on Saia revising its full-year margin targets downward, citing higher-than-anticipated start-up costs for new terminals and a challenging demand environment.
However, Saia also reported a record revenue of $823 million in its second quarter, marking an 18.5% year-over-year increase. Concurrently, operating income rose by 14.4% to $137.6 million, despite a decline in the company's operating ratio due to costs associated with terminal openings and relocations. In line with this, Saia is in the midst of an aggressive expansion, planning to open nine more facilities in the third quarter and potentially four more in the fourth quarter.
InvestingPro Insights
As investors digest the recent developments and Stifel's revised outlook on Saia Inc., real-time data from InvestingPro offers additional context. Saia's market capitalization stands at $10.4 billion, with a P/E ratio of 27.51, which suggests the stock may be trading at a premium given its near-term earnings growth. The company's revenue growth remains robust, with a 13.28% increase over the last twelve months as of Q2 2024, and a quarterly growth rate of 18.52% for Q2 2024. Despite recent price volatility, with a one-week total return of -19.18%, Saia has been profitable over the last twelve months and analysts predict profitability this year.
InvestingPro Tips recommend caution due to the recent downward earnings revisions by analysts and the stock's significant hit over the last week. Additionally, the stock's volatility and its performance over the last month, which has seen a price total return of -16.42%, may be of interest to active traders. For those considering a longer-term perspective, it's noteworthy that Saia has delivered a strong return over the last five years and a high return over the last decade, although it currently does not pay a dividend to shareholders.
For those looking to delve deeper into Saia's financial health and stock performance, more InvestingPro Tips are available, providing a comprehensive analysis to help investors make informed decisions. Use coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, and gain access to additional tips that could further guide your investment strategy.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.