The going hasn’t gotten any easier for Heartland Express (NASDAQ:HTLD) in the last couple of quarters, as the company has continued to miss revenue expectations and has run its streak to five straight quarters of weaker than expected top-line results. While earnings performance has been a little better relative to expectations on a reported basis, gains on equipment sales have been an important part of that performance and seem unlikely to continue at the same rate. On top of all that, truckload rates are likely to peak in the first half of 2022 and then start declining.
I wasn’t that positive on Heartland back in August of 2021, and I thought investors would do better with Knight-Swift (KNX). Since then, Heartland shares have fallen about 10% versus the 15% rise in Knight-Swift, while Werner (WERN) and Schneider (SNDR) have likewise outperformed.
Given the underperformance at Heartland and the opportunity to take advantage of better driver availability, I think Heartland is likely less vulnerable to this next phase of the cycle and may well show better counter-cyclical performance. That said, I still think Knight-Swift offers a better long-term opportunity.
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Heartland Express Continues To Muddle Through As Trucking Rates Approach A Cyclical Top
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