Saia, Inc. (NASDAQ:SAIA) stock fell on Wednesday as investors weighed mixed fourth-quarter freight trends against confidence in the company's long-term national expansion strategy.Earlier this month, Saia provided fourth-quarter LTL operating data, where it said October LTL shipments and tonnage per workday fell year over year, while weight per shipment inched higher.In November, shipments and tonnage per workday rose, but weight per shipment slipped versus last year.Also Read: General Mills Cautions About ...

Saia, Inc. (NASDAQ:SAIA) stock fell on Wednesday as investors weighed mixed fourth-quarter freight trends against confidence in the company's long-term national expansion strategy.Earlier this month, Saia provided fourth-quarter LTL operating data, where it said October LTL shipments and tonnage per workday fell year over year, while weight per shipment inched higher.In November, shipments and tonnage per workday rose, but weight per shipment slipped versus last year.Also Read: General Mills Cautions About ...

Core Insights - Soapstone Management sold its entire stake in Saia, amounting to 23,750 shares valued at $6.51 million, during the third quarter of 2025, resulting in a complete exit from the stock [2][3] - The sale reduced Soapstone's exposure to Saia by 4.4% of its reportable assets, and as of September 30, 2025, Saia no longer contributed to the fund's assets under management (AUM) [3] Company Overview - Saia, Inc. is a prominent North American provider of less-than-truckload (LTL) freight transportation, operating a large fleet and extensive terminal network [5][8] - As of December 5, 2025, Saia's stock price was $330.91, with a market capitalization of $8.81 billion, revenue of $3.23 billion, and net income of $283.62 million for the trailing twelve months (TTM) [4] Market Performance - Saia shares experienced a one-year decline of 36%, underperforming the S&P 500 by 49 percentage points [3] - Despite recent challenges, Saia has been acquiring terminals from former competitor Yellow, positioning itself for potential recovery as market conditions improve [11] Investment Perspective - The LTL industry is currently in a cyclical trough, and while Soapstone's exit may reflect a search for better short-term opportunities, Saia is viewed as a long-term buy-and-hold investment, still 45% below its all-time high [10][12]

Core Insights - Madison Small Cap Fund experienced a challenging third quarter in 2025, with a decline of 1.3%, underperforming its benchmarks due to stock selection and a speculative market environment [1] Company Performance - Saia, Inc. (NASDAQ:SAIA) reported a one-month return of -13.67% and a 52-week loss of 53.76%, closing at $250.48 per share with a market capitalization of $6.673 billion as of November 20, 2025 [2] - In Q3 2025, Saia, Inc. announced revenue of $839.6 million, which remained relatively flat compared to Q3 2024 [4] Investment Strategy - Madison Small Cap Fund exited its position in Saia, Inc. during the third quarter due to a challenging macroeconomic environment for LTL pricing and operational issues related to geographic expansion [3] - The fund expressed a willingness to revisit the investment in the future if operating rates improve, highlighting the company's strong customer service focus and excellent business moat [3]

Core Viewpoint - The Zacks Transportation-Truck industry is currently facing significant challenges due to supply-chain disruptions, high inflation-driven interest rates, and a shortage of truck drivers, yet some companies are demonstrating resilience through growth strategies and operational efficiency [1]. Industry Overview - The Zacks Transportation-Truck industry consists of truck operators that transport freight across North America, offering various services including full-truckload and less-than-truckload (LTL) services, as well as logistics and intermodal services [2]. Current Trends - Supply-chain disruptions and weak freight rates are negatively impacting the industry, with the Cass Freight Shipments Index declining by 5.4% year over year in September, marking a continuous decline for seven months [3]. - Companies are focusing on cost-cutting measures to improve productivity and efficiency in response to high material, labor, and transportation costs, as well as tariffs that pressure margins [4]. - The trucking industry is projected to face a shortage of over 160,000 drivers by 2030, exacerbating supply-chain challenges [5]. - Tariff policies from the current administration are increasing costs and disrupting supply chains, creating uncertainty for investors [6]. Industry Performance - The Zacks Transportation-Truck industry ranks 239 out of 244 Zacks industries, placing it in the bottom 2% and indicating poor near-term prospects [7][8]. - The industry's earnings estimate for 2025 has decreased by 30.9% year over year, reflecting a loss of confidence among analysts regarding earnings growth potential [9]. - Over the past year, the industry has declined by 31.4%, underperforming the S&P 500's increase of 14.2% and the broader transportation sector's decline of 13.9% [10]. Valuation Metrics - The industry is currently trading at an EV-to-EBITDA ratio of 11.82X, compared to the S&P 500's 18.24X and the sector's 10.03X, with historical trading ranges between 7.86X and 16.3X over the past five years [13]. Notable Companies - J.B. Hunt Transport Services (JBHT) is recognized for its diverse transportation services and has seen a year-over-year share price increase of 14.5%, currently holding a Zacks Rank of 3 (Hold) [16][17]. - Saia, which provides regional and interregional LTL services, also holds a Zacks Rank of 3, with a 2% upward revision in the Zacks Consensus Estimate for 2025 earnings over the past 60 days [19].

Core Insights - Saia, Inc. (SAIA) continues to exhibit weakness, contrasting with previous bullish outlooks, attributed to valid market caution amid macroeconomic volatility [1] Company Analysis - The logistics sector has been a focus for nearly two decades, with significant experience in stock investing and macroeconomic analysis [1] - The company has diversified investments across various industries and market capitalizations, including banks, telecommunications, logistics, and hotels [1] - The analyst has been trading in the US market for four years, with holdings in US banks, hotels, shipping, and logistics companies [1] Market Context - The cautious market stance is influenced by ongoing macroeconomic volatility, impacting investor sentiment towards Saia, Inc. [1]

Financial Performance - Operating revenue for Q3 2025 was $839,644,000, a slight decrease of 0.5% compared to $842,103,000 in Q3 2024[14] - Net income for Q3 2025 was $86,316,000, down 6.2% from $92,748,000 in Q3 2024[14] - Basic earnings per share for Q3 2025 was $3.23, down from $3.47 in Q3 2024, reflecting a decrease of 6.9%[14] - Net income for the nine months ended September 30, 2025, was $207,517,000, a decrease of 27.5% compared to $285,962,000 for the same period in 2024[32] - Revenue for the nine months ended September 30, 2025, increased to $2,444,334,000, up 1.0% from $2,420,122,000 in 2024[32] - Basic earnings per share for the nine months ended September 30, 2025, was $7.76, down 27.5% from $10.72 in 2024[34] - Operating revenues for the nine months ended September 30, 2025, were $2.4 billion, up 1.0% from the same period in 2024[64] - Consolidated operating income for the third quarter of 2025 was $118.6 million, down from $125.2 million in the prior year quarter, resulting in an operating ratio of 85.9%[65] - Net income for the third quarter of 2025 was $86.3 million, or $3.22 per diluted share, compared to $92.7 million, or $3.46 per diluted share, in the third quarter of 2024[72] Assets and Liabilities - Total current assets increased to $496,994,000 as of September 30, 2025, up 14.0% from $435,769,000 at December 31, 2024[12] - Total assets reached $3,500,960,000, representing a 10.5% increase from $3,166,857,000 at December 31, 2024[12] - Long-term debt, less current portion, increased to $218,000,000 as of September 30, 2025, compared to $194,981,000 at December 31, 2024[12] - The company’s total debt increased to $219,199,000 as of September 30, 2025, from $200,294,000 at December 31, 2024[37] - Total stockholders' equity increased to $2,526,027,000 as of September 30, 2025, up 9.3% from $2,311,271,000 at December 31, 2024[12] Cash Flow and Investments - Net cash provided by operating activities was $457,665,000 for the nine months ended September 30, 2025, compared to $418,963,000 in 2024, reflecting a 9.2% increase[21] - The company reported a net cash used in investing activities of $(454,472,000) for the nine months ended September 30, 2025, a decrease of 47.8% from $(868,224,000) in 2024[21] - Cash and cash equivalents at the end of the period were $35,500,000, compared to $14,405,000 at the end of the same period in 2024[21] - Net cash used in investing activities decreased by $413.7 million to $454.5 million for the nine months ended September 30, 2025, compared to $868.2 million in the prior year, primarily due to the acquisition of terminals from Yellow Corporation[86] Operational Metrics - Operating expenses for Q3 2025 totaled $721,034,000, a marginal increase of 0.2% from $716,932,000 in Q3 2024[14] - LTL shipments decreased by 1.9% to 2.3 million shipments in Q3 2025, while LTL tonnage was down 1.5% to 1.6 million tons[62] - LTL revenue per shipment, excluding fuel surcharge, increased by 0.3% to $294.35 in Q3 2025[62] - The operating ratio for Q3 2025 was 85.9%, compared to 85.1% in Q3 2024[54] - Salaries, wages, and employee benefits increased by $2.9 million in the third quarter of 2025, primarily due to higher group health insurance costs[66] Debt and Financing - The company had outstanding borrowings of $118,000,000 under the Revolving Credit Facility as of September 30, 2025, compared to $94,000,000 at December 31, 2024[39] - The company’s liquidity needs primarily arise from capital investments and working capital requirements, with $445,600,000 available under the Revolving Credit Facility as of September 30, 2025[39] - The Company entered into a $350 million uncommitted Private Shelf Agreement with PGIM, Inc., allowing the issuance of senior notes through November 9, 2026[40] - The Company issued senior promissory notes totaling $100 million under a Private Shelf Agreement, bearing interest at 6.09% per annum, maturing on May 1, 2029[92] - The Revolving Credit Facility was amended to increase commitments by $300 million to a total of $600 million, with a maturity date extended to December 9, 2029[89] Compliance and Risk Management - As of September 30, 2025, the Company maintained compliance with a consolidated net lease adjusted leverage ratio of less than 3.50 to 1.00[43] - The Company was in compliance with its debt covenants under both the Revolving Credit Facility and the Private Shelf Agreement as of September 30, 2025[94] - The Company is exposed to market risks including interest rates and diesel fuel prices, with a fuel surcharge program in place to mitigate risks from rising diesel prices[100] Miscellaneous - The effective tax rate was 24.8% for the quarters ended September 30, 2025, and 2024[71] - Working capital at September 30, 2025, was $201.1 million, an increase from $90.7 million at September 30, 2024[84] - The company implemented a 5.9% general rate increase on October 1, 2025, affecting approximately 25% of operating revenue[80] - The company anticipates a 3.0% salary and wage increase for all employees, excluding executives, effective October 1, 2025[81] - Contractual obligations for operating leases totaled $152.9 million as of September 30, 2025, with purchase obligations amounting to $39.7 million[96] - The Company has accrued approximately $3.5 million for uncertain tax positions and $99.0 million for claims and insurance liabilities as of September 30, 2025[98]

Core Viewpoint - Saia is focusing on cost controls and efficiency initiatives to navigate through current challenges while awaiting a market recovery [1] Financial Performance - Saia reported third-quarter adjusted earnings per share of $2.81, exceeding consensus estimates by 25 cents but down 65 cents year-over-year [1] - Revenue for the quarter was $840 million, slightly down year-over-year but $11 million above consensus estimates [2] - Tonnage declined 1.5% year-over-year, with daily shipments down 2% year-over-year but up 3% from the second quarter [4][5] Tonnage Trends - Tonnage showed a deteriorating trend throughout the quarter, with a 0.9% increase in July followed by declines of 2.2% and 3.3% in August and September, respectively [3] - October tonnage is down 4% year-over-year, with management noting weaker performance in the first weeks of the month [3] Operational Efficiency - The adjusted operating ratio was reported at 87.6%, which is 250 basis points worse year-over-year but 20 basis points better than the second quarter [7] - New terminals showed a 100 basis points improvement in operating ratio and are now operating below a 95% average [8] Pricing Environment - Management indicated that the pricing environment remains rational, with contractual rate increases averaging 5.1% in the quarter and a new general rate increase of 5.9% implemented on October 1 [6]

Core Insights - Saia reported revenue of $839.64 million for the quarter ended September 2025, reflecting a decrease of 0.3% year-over-year, but a positive surprise of +0.75% compared to the Zacks Consensus Estimate of $833.38 million [1] - The company's EPS was $2.81, down from $3.46 in the same quarter last year, but exceeded the consensus estimate of $2.54 by +10.63% [1] Financial Performance Metrics - Operating Ratio was reported at 85.9%, better than the estimated 88.7% by analysts [4] - LTL (Less-Than-Truckload) Shipments totaled 2,333, surpassing the estimate of 2,320 [4] - LTL pounds per shipment were 1,355, slightly below the average estimate of 1,363 [4] - LTL revenue per hundredweight (CWT), excluding fuel surcharge, was $21.72, compared to the estimated $21.86 [4] - LTL Tonnage was reported at 1,581.00 KTon, marginally above the estimate of 1,580.35 KTon [4] - LTL Revenue Per Hundredweight (CWT) was $25.76, in line with the average estimate of $25.75 [4] Stock Performance - Saia's shares have returned -5.6% over the past month, contrasting with the Zacks S&P 500 composite's +3.6% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market [3]

Financial Data and Key Metrics Changes - The third quarter revenue was $839.6 million, a decrease of 0.3% compared to the previous year, reflecting the macroeconomic landscape [12][18] - The adjusted operating ratio increased to 87.6%, up from 85.1% a year ago, primarily due to a decrease in adjusted cost per shipment [18] - The diluted earnings per share were $3.22, down from $3.46 in the same quarter last year, while adjusted diluted earnings per share were $2.81 [18] Business Line Data and Key Metrics Changes - The ramping markets, consisting of 39 terminals opened since early 2022, improved their operating ratio by over 100 basis points compared to the second quarter, now operating at a sub-95 [4][5] - Shipments per workday decreased by 1.9% year-over-year but improved by 3.2% sequentially [8][12] - The cargo claims ratio was 0.54%, marking the fourth consecutive quarter below 0.6%, indicating strong service performance [7] Market Data and Key Metrics Changes - The company experienced a 3% sequential increase in shipments, but a 4.8% decrease compared to the third quarter of 2024 [9] - The fuel surcharge revenue increased by 2.1%, accounting for 15.2% of total revenue compared to 14.8% a year ago [12] - The overall freight market has shown softer trends in 2025, impacting shipment volumes [8][19] Company Strategy and Development Direction - The company is focused on customer service, network optimization, and cost control, with an emphasis on expanding its national footprint to enhance customer relationships [4][5] - A general rate increase of 5.9% was implemented on October 1, impacting approximately 25% of operating revenue [11] - The company aims to leverage its investments in network expansion to become a significant player in the less-than-truckload (LTL) industry [20][21] Management's Comments on Operating Environment and Future Outlook - Management noted that the economic backdrop remains uncertain, but the company is well-positioned to adapt and leverage its network investments [20][21] - The company anticipates that the current market conditions are in the early stages of realizing its full potential, with expectations for improved performance as the market stabilizes [21] - Management expressed confidence in the company's ability to maintain high service levels while managing costs effectively [19][20] Other Important Information - The company recorded a $14.5 million net operating expense reduction from a gain on real estate disposal and impairment [2] - Salaries, wages, and benefits increased by 0.7% year-over-year, driven by higher employee-related costs [13] - Accident claims and insurance expenses rose by 22.5% year-over-year, primarily due to existing claims development and inflation [17] Q&A Session Summary Question: Trends in October regarding tonnage and shipments - Management reported that shipments in October are down around 3.5%, with tonnage down about 4%, indicating a softer start to the month compared to expectations [24][25] Question: Updates on new terminals and their performance - Management highlighted that the new terminals are showing improved productivity and cost efficiency, with expectations for continued improvement as they mature [32][34] Question: Pricing environment and yield metrics - Management noted that the pricing environment remains disciplined, with a focus on maintaining yield metrics despite challenges in the market [40][41] Question: Network optimization efforts - Management discussed ongoing network optimization initiatives, emphasizing the importance of AI tools in improving operational efficiency [48][50] Question: Capacity and technology investments - Management indicated that the company has ample capacity across its network and continues to invest in technology to drive efficiencies [63][64] Question: Growth opportunities in a down year - Management expressed confidence in the ability to grow share-of-wallet with existing customers, even in a challenging economic environment [90][91]