Shares of Schneider National (NYSE:SNDR) 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 (NASDAQ:RYAAY) , Costamare (NYSE:CMRE) and Azul S.A (NYSE:AZUL) , 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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Ryanair Holdings PLC (RYAAY): Free Stock Analysis Report
Costamare Inc. (CMRE): Free Stock Analysis Report
Schneider National, Inc. (SNDR): Free Stock Analysis Report
AZUL SA (AZUL): Free Stock Analysis Report
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