Old Dominion Freight Line Inc (ODFL, Financial) has recently been in the spotlight, drawing interest from investors and financial analysts due to its robust financial stance. With shares currently priced at $443.02, Old Dominion Freight Line Inc has witnessed a daily loss of 0.64%, marked against a three-month change of 10.79%. A thorough analysis, underlined by the GF Score, suggests that Old Dominion Freight Line Inc is well-positioned for substantial growth in the near future.
What Is the GF Score?
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
- Financial strength rank: 10/10
- Profitability rank: 10/10
- Growth rank: 10/10
- GF Value rank: 3/10
- Momentum rank: 8/10
Each one of these components is ranked and the ranks also have positive correlation with the long term performances of stocks. The GF score is calculated using the five key aspects of analysis. Through backtesting, we know that each of these key aspects has a different impact on the stock price performance. Thus, they are weighted differently when calculating the total score. With high ranks in financial strength, profitability, and growth, but a lower GF Value rank, GuruFocus assigned Old Dominion Freight Line Inc the GF Score of 94 out of 100, which signals the highest outperformance potential.
Understanding Old Dominion Freight Line Inc's Business
Old Dominion Freight Line Inc is a prominent player in the transportation industry, boasting a market cap of $48.34 billion and sales of $5.87 billion. With an operating margin of 27.97%, the company stands out as one of the most disciplined and efficient providers in the trucking industry. Its profitability and capital returns are significantly above its peers. Strategic initiatives focus on increasing network density through market share gains and maintaining industry-leading service, including ultra-low cargo claims, through steadfast infrastructure investment.
Financial Strength Breakdown
According to the Financial Strength rating, Old Dominion Freight Line Inc's robust balance sheet exhibits resilience against financial volatility, reflecting prudent management of capital structure. The Interest Coverage ratio for Old Dominion Freight Line Inc stands impressively at 3,535.93, underscoring its strong capability to cover its interest obligations. This robust financial position resonates with the wisdom of legendary investor Benjamin Graham, who favored companies with an interest coverage ratio of at least 5. With an Altman Z-Score of 26.86, Old Dominion Freight Line Inc exhibits a strong defense against financial distress, highlighting its robust financial stability. With a favorable Debt-to-Revenue ratio of 0.01, Old Dominion Freight Line Inc's strategic handling of debt solidifies its financial health.
Profitability Rank Breakdown
The Profitability Rank shows Old Dominion Freight Line Inc's impressive standing among its peers in generating profit. The company's Operating Margin has increased to 27.97% in 2023, up from 19.92% in 2019. Furthermore, Old Dominion Freight Line Inc's Gross Margin has also seen a consistent rise over the past five years, indicating the company's growing proficiency in transforming revenue into profit. Old Dominion Freight Line Inc's strong Predictability Rank of 4.5 stars out of five underscores its consistent operational performance, providing investors with increased confidence.
Growth Rank Breakdown
Ranked highly in Growth, Old Dominion Freight Line Inc demonstrates a strong commitment to expanding its business. The company's 3-Year Revenue Growth Rate is 17.6%, which outperforms better than 75.6% of 910 companies in the Transportation industry. Moreover, Old Dominion Freight Line Inc has seen a robust increase in its earnings before interest, taxes, depreciation, and amortization (EBITDA) over the past few years. Specifically, the three-year growth rate stands at 28, and the rate over the past five years is 22.3. This trend accentuates the company's continued capability to drive growth.
Next Steps
Considering Old Dominion Freight Line Inc's financial strength, profitability, and growth metrics, the GF Score highlights the firm's unparalleled position for potential outperformance. Investors seeking to capitalize on such robust financial health and promising growth trajectory should consider the insights provided by the GF Score. For those looking to explore further, GuruFocus Premium members can find more companies with strong GF Scores using the following screener link: GF Score Screen.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
