Saia Q4 Earnings Exceed Expectations, Driving Stock Surge

Freight transportation and logistics leader Saia Inc. (NASDAQ: SAIA) reported impressive fourth-quarter earnings for CY2024, surpassing analyst projections. Revenue reached $789 million, a 5% year-over-year increase, exceeding the anticipated $777.3 million. Earnings per share (EPS) stood at $2.84, outperforming the consensus estimate of $2.77 by 2.6%. This strong performance propelled Saia’s stock price upward.

Saia’s Q4 CY2024 Performance Highlights

Here’s a closer look at Saia’s key performance indicators for Q4 CY2024:

• Revenue: $789 million, exceeding analyst estimates by 1.5% and demonstrating 5% year-on-year growth.
• EPS (GAAP): $2.84, surpassing analyst estimates by 2.6%.
• Operating Margin: 12.9%, a decrease from 15% in Q4 CY2023.
• Free Cash Flow: -$3.52 million, down from $62.91 million in the same period last year.
• Sales Volumes: Increased by 10.1% year-on-year, compared to 8.2% growth in Q4 CY2023.
• Market Capitalization: $12.73 billion.

Message from Saia’s Leadership

Saia’s President and CEO, Fritz Holzgrefe, expressed satisfaction with the company’s progress in CY2024, highlighting the expansion of their terminal network and workforce. The addition of 21 new terminals and relocation of 9 others strengthened Saia’s service capabilities. Holzgrefe emphasized the company’s commitment to operational excellence and its achievement of serving all 48 contiguous states. With over 15,000 employees, Saia is well-positioned as a leading national carrier.

Saia’s Business Model: From Produce to Transportation

Saia transitioned its business model from selling produce to providing freight transportation solutions. This strategic shift has proven successful, positioning Saia as a key player in the ground transportation industry.

Ground Transportation Industry Outlook

The ground transportation sector is experiencing growth driven by e-commerce and global trade expansion. Last-mile delivery is a particularly significant area of opportunity. Companies are leveraging data analytics and autonomous vehicle technology to optimize efficiency and cost-effectiveness. However, the industry remains susceptible to economic fluctuations and external factors like fuel costs.

Saia’s Long-Term Sales Growth

Saia has demonstrated strong long-term growth, with a 12.4% compounded annual sales growth rate over the past five years. This performance surpasses the average for industrial companies, indicating the strength of Saia’s offerings. While recent growth has slowed to 7.2% annually over the last two years due to cyclical headwinds, Saia continues to outperform its peers.

Analyzing Saia’s Revenue Dynamics

Saia shipped 1.48 million tons in the latest quarter, reflecting a 5.2% average annual growth in tons shipped over the past two years. This indicates that price increases have contributed to Saia’s revenue growth, exceeding the growth in volume.

Saia’s Q4 Revenue Performance and Future Outlook

Saia’s Q4 revenue of $789 million surpassed analyst estimates by 1.5%, showcasing 5% year-on-year growth. Analysts project 8.5% revenue growth over the next 12 months, exceeding the sector average and suggesting continued strong performance.

Saia’s Operating Margin and Efficiency

Saia has consistently maintained high operating efficiency, with an average operating margin of 14.8% over the last five years. This is notable given the company’s low gross margin, highlighting effective management of operating expenses. While the Q4 operating margin of 12.9% represents a year-on-year decrease, Saia’s long-term trend indicates strong profitability.

Earnings Per Share (EPS) Analysis

Saia’s EPS has grown at a remarkable 25.7% compounded annual rate over the past five years, outpacing its revenue growth. This signifies increasing profitability on a per-share basis. While EPS remained flat over the last two years, the Q4 EPS of $2.84, although lower year-on-year, still beat analyst estimates. Future projections anticipate a 14.2% growth in full-year EPS to $13.51.

Conclusion: Saia’s Strong Q4 Results and Future Potential

Saia’s Q4 results demonstrate strong financial performance, exceeding expectations in key areas such as sales volume, revenue, and EPS. While challenges remain in navigating cyclical headwinds and maintaining operating margins, the company’s long-term growth trajectory and strategic positioning in the ground transportation sector suggest significant potential for future success. The positive market response to the earnings announcement, with a 5.1% stock price increase to $505.02, reflects investor confidence in Saia’s prospects.