Stephens has revised its rating on Saia (SAIA, Financial), lowering it from Overweight to Equal Weight, while adjusting the price target to $255 from $515. This decision comes as a result of softer shipments and yields observed in March, leading to a disappointing operating ratio for the first quarter. The company faced difficulties in aligning its costs with the decreased volumes toward the end of the quarter. Meanwhile, despite Saia's attempts to reprice freight, many shippers have opted for competitors offering lower prices.
The analyst expressed concerns over the time needed for Saia to enhance its services to a level that would regain lost market share and bolster yield growth. Consequently, Stephens has reduced its intermediate-term yield expectations and downgraded the shares. The ongoing challenges with operating ratios and yield performance could limit the stock's potential to rise significantly in the near future, the firm suggests.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 19 analysts, the average target price for Saia Inc (SAIA, Financial) is $315.75 with a high estimate of $515.00 and a low estimate of $250.00. The average target implies an upside of 33.17% from the current price of $237.11. More detailed estimate data can be found on the Saia Inc (SAIA) Forecast page.
Based on the consensus recommendation from 21 brokerage firms, Saia Inc's (SAIA, Financial) average brokerage recommendation is currently 2.1, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Saia Inc (SAIA, Financial) in one year is $459.12, suggesting a upside of 93.63% from the current price of $237.11. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Saia Inc (SAIA) Summary page.
SAIA Key Business Developments
Release Date: April 25, 2025
- Revenue: $787.6 million, a 4.3% increase from the first quarter of 2024.
- Operating Ratio: 91.1%, deteriorated by 670 basis points from 84.4% in the first quarter of 2024.
- Diluted Earnings Per Share: $1.86, compared to $3.38 in the first quarter of 2024.
- Tonnage: Increased by 11.0%.
- Shipment Increase: 2.9% increase in shipments.
- Average Weight Per Shipment: Increased by 7.8%.
- Salaries, Wages, and Benefits: Increased by 13.9% due to headcount growth and wage increases.
- Purchase Transportation Expense: Increased by 14%, accounting for 7.6% of total revenue.
- Depreciation Expense: $59 million, a 20.9% increase year-over-year.
- Cost Per Shipment: Increased by 9.4% year-over-year.
- Tax Rate: 24%, compared to 23.7% in the first quarter of 2024.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Saia Inc (SAIA, Financial) achieved first quarter records in revenue, tonnage, and shipments despite having one less workday compared to the previous year.
- Revenue increased by 4.3% year-over-year to $787.6 million, marking a record for any first quarter in the company's history.
- Contractual renewals averaged 6.1% in the quarter, reflecting strong customer belief in Saia Inc (SAIA)'s high-quality service.
- The company saw significant growth in newer markets, with facilities opened since 2022 contributing to shipment growth.
- Saia Inc (SAIA) remains focused on long-term opportunities, enhancing service offerings, and expanding its national network to provide better customer solutions.
Negative Points
- The operating ratio deteriorated to 91.1% from 84.4% a year ago, impacted by weather disruptions and sub-seasonal trends.
- First quarter diluted earnings per share decreased to $1.86 from $3.38 in the same quarter last year.
- Legacy facilities experienced a decline in shipments, contributing to a challenging operating environment.
- The uncertain macroeconomic environment led to cautious customer behavior, impacting shipment volumes.
- Total operating expenses increased by 12.6%, driven by higher salaries, wages, benefits, and depreciation expenses.
