News

Shares of Saia (NASDAQ: SAIA), the less-than-truckload (LTL) transportation company, fell sharply today after it posted disappointing results in its first-quarter earnings report.

The stock finished the day down 21% on the news.

Saia hits a roadblock

The LTL provider missed estimates on both the top and bottom lines, though it still posted growth in the quarter.

Revenue was up 14.3% to $754.8 million, which missed the consensus of $770.8 million. Revenue growth was driven by a 15.7% increase in LTL shipments per workday and a 6.2% increase in tonnage.

Pricing was also up as revenue per hundredweight, excluding fuel, rose 10.5%, and revenue per shipment rose 1.4%.

On the profit side, operating ratio, the inverse of operating margin, improved from 85% to 84.4%, and earnings per share rose 19% to $3.38, but that was worse than expectations of $3.44.

Management said that winter weather impacted operations and that March trends improved from February, though volume was still below its expectations at the end of the quarter.

The company also announced CFO Douglas Col's retirement.

Can Saia bounce back?

The sell-off in the stock seems a bit excessive as Saia still delivered solid growth and expanding profit margins, but viewed with a wider lens, today's decline seems less problematic.

Coming into today's report, Saia was roughly an 8-bagger over the last five years as it's emerged as a leader in the LTL industry, delivering improving margins and solid revenue growth.

A 21% drop is still disappointing to investors, but taken in the larger context, it seems like more of a correction on Saia's upward trajectory rather than a reason to be concerned.

Saia didn't offer guidance, but there doesn't seem to be a reason to change your thesis on the company despite the steep drop today.

Should you invest $1,000 in Saia right now?

Before you buy stock in Saia, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Saia wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.

*Stock Advisor returns as of April 22, 2024

Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.