Morgan Stanley has upgraded its rating on Saia Inc. (SAIA, Financial) from Underweight to Equal Weight, adjusting its price target to $250 from a previous $270. This change reflects a reassessment after Saia's first-quarter performance, which fell significantly short of forecasts. The company's management has highlighted that the Q1 operating ratio is now considered the baseline, suggesting that market expectations for future earnings might need to be revised downward.
The analyst has revised Saia's earnings per share (EPS) forecasts for the financial years 2025, 2026, and 2027. The new projections are $11.36, $13.95, and $15.72, respectively, down from earlier estimates of $15.19, $17.06, and $18.11. Despite these reductions, the downgrade in expectations brings Saia's stock valuation more in line with its perceived fair value, according to the analyst.
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 $443.91 with a high estimate of $580.00 and a low estimate of $270.00. The average target implies an upside of 83.94% from the current price of $241.34. 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 2.0, 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 90.24% from the current price of $241.335. 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: February 03, 2025
- Revenue: $789 million for Q4 2024, a 5% increase from the previous year's Q4.
- Operating Ratio: 87.1% for Q4 2024, deteriorated by 210 basis points from 85% in Q4 2023.
- Diluted Earnings Per Share (EPS): $2.84 for Q4 2024, compared to $3.33 in Q4 2023.
- Full Year Revenue: $3.2 billion for 2024.
- Full Year Operating Income: $482.2 million for 2024.
- Full Year Diluted EPS: $13.51 for 2024, compared to $13.26 in 2023.
- Shipments Per Workday: Increased by 4.5% in Q4 2024.
- Revenue Per Shipment (Excluding Fuel Surcharge): Increased by 1.3% to $299.7 in Q4 2024.
- Weight Per Shipment: Increased by 3.7% in Q4 2024.
- Fuel Surcharge Revenue: Decreased by 12.5% in Q4 2024.
- Salaries, Wages, and Benefits: Increased by 8.7% in Q4 2024.
- Purchased Transportation Expense: Decreased by 11.1% in Q4 2024.
- Fuel Expense: Decreased by 2.9% in Q4 2024.
- Claims and Insurance Expense: Increased by 16.6% in Q4 2024.
- Depreciation Expense: $54.1 million in Q4 2024, an 18.3% increase year-over-year.
- Total Expenses: Increased by 7.7% in Q4 2024.
- Capital Expenditures: Over $1 billion in 2024.
- Cash on Hand: Just shy of $20 million at the end of 2024.
- Total Debt Outstanding: Approximately $200 million at the end 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 a record revenue of $3.2 billion for the full year 2024, marking a significant milestone in its 100th year of operation.
- The company opened 21 new terminals in 2024, expanding its national footprint and enabling direct service across the 48 contiguous states.
- Saia Inc (SAIA) onboarded over 1,300 new team members, enhancing its workforce to support growth and maintain high service standards.
- Fourth quarter revenue increased by 5% year-over-year to $789 million, setting a record for any fourth quarter in the company's history.
- The company successfully completed the upsize and extension of its revolving credit facility, providing financial flexibility for future capital expenditures.
Negative Points
- The operating ratio deteriorated to 87.1% in the fourth quarter, compared to 85% a year ago, indicating increased operational costs.
- Yield, excluding fuel surcharge, declined by 2.3% in the fourth quarter, reflecting challenges in pricing and mix optimization.
- Claims and insurance expenses increased by 16.6% year-over-year, driven by higher claims activity and unfavorable development of open cases.
- Depreciation expenses rose by 18.3% year-over-year due to ongoing investments in revenue equipment, real estate, and technology.
- Diluted earnings per share decreased to $2.84 in the fourth quarter, down from $3.33 in the same period last year, highlighting pressure on profitability.
