C.H. Robinson (CHRW) Shares Plunge 23% In A Year: Here's Why

Shares of C.H. Robinson Worldwide, Inc. (NASDAQ:CHRW) have declined 22.7% against the industry's 0.1% rise in a year’s time. The below -par performance was primarily caused by weak truck pricing.

Let’s take a detailed look into the factors hurting the stock.

Unfavorable pricing across most service lines have been affecting the company’s growth. Revenues declined 7.9% year over year in 2019. Amid weak freight demand, excess truck capacity is exerting pressure on the company’s truckload volumes. Large capital expenses, which were focused on improving technology, hurt C.H. Robinson’s bottom line.

Frequent management changes at C.H. Robinson have dented investors’ optimism in the stock, which is affecting the price.

Deterioration in operating ratio (operating expenses as a percentage of revenues) due to revenue weakness is also a concern. Evidently, the metric (on an adjusted basis) came in at 69.5% in 2019 compared with 66.3% in 2018.

Also, the company has an average track record with respect to earnings per share (EPS). C.H. Robinon’s earnings outperformed the Zacks Consensus Estimate in two of the last four quarters. It reported lower-than-expected EPS in the other two quarters. The company has trailing four-quarter negative earnings surprise of 7.5%, on average.

Negative Estimate Revisions and Lackluster Momentum Score

The negativity revolving around the stock is evident from the Zacks Consensus Estimate for current year earnings being revised downward by 15.1% in the past 60 days to $3.7.

The company’s Momentum Score of D further highlights its short-term unattractiveness.

Additionally, C.H. Robinson carries a Zacks Rank #5 (Strong Sell).

Stocks to Consider

Few better-ranked stocks in the Zacks Transportation sector are Azul S.A (NYSE:AZUL) , Frontline Ltd. (NYSE:FRO) and Costamare Inc. (NYSE:CMRE) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of Azul, Frontline and Costamare have increased 4.7%, 15.9% and 23.7%, respectively, in a year.

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