Saia Builds Value: Why Its Uptrend Is Set to Continue

Key Points

• Saia outperformed in 2024, and the outlook for 2025 is solid, with another year of expansion and market share gains ahead. 
• Analysts' trends are positive and provide a tailwind for the stock and trucking industry. 
• Trump's tariffs may cause volatility in the first half of 2025 and open up an attractive buying opportunity. 

While tariff-induced volatility may impact Saia’s NASDAQ: SAIA stock price in the first half of 2025, this company is building leverage that ensures its stock price will continue to trend higher over the long term. Leverage is seen in the growing footprint, swelling shareholder value, and balance sheet, which promises the first two trends can continue. Highlights from FQ4 and 2024 include more than $1 billion in capital expenditures, including property, equipment, technology, and people, to cement its position as a national-direct LTL and logistics company with service in all 48 contiguous states. 

The balance sheet was impacted, including a cash reduction and debt increase, but no red flags were raised. The debt increase leaves the company in a net debt position relative to cash, but overall, it has low leverage and sufficient cash flow to sustain balance sheet health and growth plans in 2025. Total liability is less than 0.5x equity, with equity up nearly 20% compared to 2023. Regarding the cash flow, 2024 cash flow is negative due to the impact of increased CapEx, which was up more than double the previous year. The 2025 outlook includes another year of higher-than-usual spending but far less than 2024 and offset by an expectation for organic growth. 

Saia Grows Its Footprint and Outperforms in Q4

Saia had a solid quarter, aligning with details in reports from J.B. Hunt Transportation NASDAQ: JBHT and Knight-Swift Transportation NYSE: KNX, suggesting a bottom for the shipping/freight market and an upswing in 2025. It reported a better-than-expected $789 million in net revenue for a gain of 5% year over year to beat the consensus by 100 basis points. A 4.5% increase in LTL shipments per day, an 8.3% increase in tonnage, and a 1.3% increase in revenue per shipment drove strength, offset by a 2.3% decline in revenue per hundredweight. The expanding footprint, which includes 21 new terminals, underpinned the business with a nearly 11% gain compared to the prior year. 

The margin news is also favorable. The company was able to control its costs despite the ramp in footprint and drive a better-than-expected margin. The operating ratio increased by 210 basis points, less than forecast, and should improve over time as new markets develop. The salient detail is that $2.84 in GAAP earnings outpaced MarketBeat’s reported consensus by 250 basis points, double the top-line strength, and is sufficient to sustain the capital outlook. 

Saia didn’t provide guidance for 2025 but shows momentum with its expansion plans and is positioned to gain share, so it should produce another year of solid growth. Demand and pricing are expected to become tailwinds in the back half, so growth could reach a double-digit pace. Analysts are forecasting about 9% revenue growth at the consensus, with earnings to grow at nearly double the pace, potentially low estimates suggesting the positive sentiment trend will continue to support the price action. 

Analysts' Trends Provide Tailwind for Trucking Stocks 

Analysts' revisions for Saia and other truckers were mixed in H2 2024 and January 2025 but are positive overall. Trends for Saia include firm coverage, 17 analysts covering the stock, a Moderate Buy rating, and a rising price target. The analysts peg the stock at Moderate Buy with a bullish bias due to the high number of Buy ratings, 11 or roughly 65%. The consensus price target implies a 10% gain from critical support levels; the revision trend and high-end range of $644 add more than 20%.

The price action after the report is bullish. The market jumped more than 5% in premarket trading to confirm support at a critical level compounded by a cluster of moving averages. The critical level is near the middle of a long-term trading range; the cluster of moving averages includes the 6-day, 30-day, and 150-day EMAs, which show broad market support. If the market can sustain support after the opening, a move to the high end of the range is likely. If not, Saia could return to firmer support levels before continuing its long-term uptrend.