Investors interested in Transportation - Services stocks are likely familiar with ZTO Express (Cayman) Inc. (ZTO) and TFI International Inc. (TFII) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank favors stocks w ...

Financial Data and Key Metrics Changes - The company reported total revenue before fuel surcharge of $1.7 billion, down from $1.9 billion in the same quarter last year [4] - Operating income was $153 million, with a margin of 8.9%, compared to $134 million in the third quarter of 2024 [4] - Adjusted net income decreased to $99 million from $134 million year-over-year, with adjusted EPS at $1.20 compared to $1.58 [4] - Free cash flow for the third quarter was nearly $200 million, contributing to a year-to-date total of just over $570 million, slightly above the previous year [5] Business Segment Data and Key Metrics Changes - LTL operations accounted for 40% of segmented revenue before fuel surcharge, generating $687 million, down 11% year-over-year [6] - Truckload segment revenue was $684 million, down from $723 million in the prior year, with operating income of $53 million compared to $70 million last year [7] - Logistics segment produced $368 million in revenue, down from $426 million, with operating income at $31 million versus $49 million last year [8] Market Data and Key Metrics Changes - The U.S. LTL market is experiencing a slow start in Q4, with expectations of a deterioration in operating ratio by 200 to 300 basis points due to a subdued freight environment [13] - The company anticipates a better outlook for 2026, driven by potential improvements in consumer spending and industrial sector investments [14] Company Strategy and Development Direction - The company is focusing on improving service quality and operational efficiencies, particularly in the LTL segment, to prepare for a rebound in freight volumes [3][6] - There is a strong emphasis on investing in AI to enhance cost efficiency and service quality, with plans for significant investments in 2026 [15][24] - The company is also considering M&A opportunities, contingent on market conditions and valuations, while currently prioritizing share buybacks [55] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for 2026, citing potential improvements in demand and pricing due to capacity reductions in the market [49] - The current operating environment is challenging, with government shutdowns impacting revenue from the Department of Defense, which constitutes a significant portion of the business [32][85] - The company is maintaining its workforce despite current challenges, anticipating a recovery in volumes and the need for skilled personnel [59] Other Important Information - The board approved a 4% increase in the quarterly dividend to $0.47 per share, reflecting a yield of close to 2% [4] - The funded debt-to-EBITDA ratio stands at 2.4 times, indicating a solid balance sheet [9] Q&A Session Summary Question: Thoughts on the state of the LTL market today - Management noted a slow start in Q4 and anticipated a deterioration in operating ratios due to a depressed macro environment [12][13] Question: Progress on internal initiatives in the LTL business - Management highlighted improvements in service quality and operational processes, with a focus on enhancing revenue quality and reducing claims [16][19] Question: Expectations for LTL margins and pricing - Management indicated that improvements in service would allow for better pricing power in the future, with a focus on growing small and medium-sized accounts [22][36] Question: Fourth quarter guidance and segment expectations - Management provided guidance for U.S. LTL operating ratio in Q4 at 96, with logistics and specialized truckload also expected to be lower [31][35] Question: Impact of CDL restrictions on pricing and demand - Management suggested that CDL restrictions could help correct the imbalance between supply and demand, potentially leading to improved pricing [48] Question: Integration process of Daseke - Management confirmed that financial integration is complete, with ongoing work on operational systems and sales strategies [74] Question: Volume trends in October and overall demand outlook - Management acknowledged a soft start to October, with expectations of a slow recovery as government issues are resolved [77][85]

Financial Highlights - TFI International achieved an operating margin of 85% [11] - The company's Free Cash Flow (FCF) yield is 108% [11] - FCF conversion rate reached 871% [11] - The company has access to US$09 billion in revolving credit facilities [11] - The annual forward dividend yield is 21% [11] Growth and Acquisitions - TFI International has completed 94 acquisitions since 2016, including 5 major acquisitions (defined as having a purchase price of US$2000 million and over) [11, 21] - The company's strategy focuses on acquisitions that are immediately accretive to EPS and free cash flow [21] - Since 2017, US$25 billion has been returned to shareholders [11] Operational Overview - Less-Than-Truckload segment accounts for 41% of Year-to-Date (YTD) Q3-2025 revenue [23, 33] - Truckload segment represents 39% of YTD Q3-2025 revenue [23, 37] - Logistics segment contributes 20% of YTD Q3-2025 revenue [23, 42] - E-commerce revenue reached US$466 million TTM 3Q25 [59]

Core Insights - TFI International Inc. reported a revenue of $1.97 billion for the quarter ended September 2025, reflecting a year-over-year decline of 9.9% and an EPS of $1.20 compared to $1.60 a year ago [1] - The reported revenue fell short of the Zacks Consensus Estimate of $2.04 billion, resulting in a surprise of -3.31%, while the EPS exceeded the consensus estimate of $1.19 by 0.84% [1] Financial Performance Metrics - Adjusted Operating Ratio for Truckload was 92.3%, higher than the three-analyst average estimate of 91.4% - Adjusted Operating Ratio for Less-Than-Truckload was 88.8%, also better than the three-analyst average estimate of 91.4% - Overall Adjusted Operating Ratio stood at 91.2%, slightly below the average estimate of 91.7% [4] - Canadian LTL Tonnage was reported at 566.00 KTons, compared to the average estimate of 571.61 KTons - U.S. LTL Tonnage was 822.00 KTons, below the average estimate of 834.74 KTons [4] Revenue Breakdown - Revenue before fuel surcharge was $1.72 billion, lower than the estimated $1.8 billion, marking a year-over-year decline of 9.5% - Fuel surcharge revenue was $243.78 million, below the average estimate of $255.01 million, representing a year-over-year decrease of 12.7% [4] - Revenue from Logistics was $367.77 million, compared to the estimated $409.34 million, reflecting a year-over-year decline of 13.8% - Revenue from Less-Than-Truckload was $687.04 million, significantly lower than the average estimate of $822.89 million, indicating a year-over-year change of -10.9% - Truckload revenue was reported at $684.1 million, below the average estimate of $738.68 million, with a year-over-year change of -5.4% [4] Stock Performance - TFI International's shares returned +0.5% over the past month, underperforming the Zacks S&P 500 composite's +3.6% change - The stock currently holds a Zacks Rank 5 (Strong Sell), suggesting potential underperformance in the near term [3]

Core Insights - TFI International Inc. reported quarterly earnings of $1.2 per share, exceeding the Zacks Consensus Estimate of $1.19 per share, but down from $1.6 per share a year ago, indicating an earnings surprise of +0.84% [1] - The company posted revenues of $1.97 billion for the quarter, missing the Zacks Consensus Estimate by 3.31% and down from $2.18 billion year-over-year [2] - TFI International shares have declined approximately 33.9% year-to-date, contrasting with the S&P 500's gain of 17.2% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $1.20 on revenues of $2.04 billion, and for the current fiscal year, it is $4.49 on revenues of $8.04 billion [7] - The estimate revisions trend for TFI International was unfavorable prior to the earnings release, resulting in a Zacks Rank 5 (Strong Sell) for the stock, indicating expected underperformance in the near future [6] Industry Context - The Transportation - Services industry, to which TFI International belongs, is currently ranked in the bottom 7% of over 250 Zacks industries, suggesting a challenging environment for stocks in this sector [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact investor sentiment and stock performance [5]

Core Insights - TFI International's U.S. LTL operations showed slight improvement in the third quarter, with the operating ratio (OR) remaining at 92.2%, an improvement from 94% in the previous quarter [1] - However, key metrics such as revenue per hundredweight excluding fuel decreased by 3.33% year-over-year, and total tons declined by 6.27% [2] - The overall OR for TFI's total LTL operations, including Canadian operations, increased by 150 basis points to 88.8%, while the Canadian segment's OR deteriorated to 81.2% from 76.3% [3] Financial Performance - TFI's adjusted earnings per share fell to $1.20 from $1.59 a year earlier, with significant declines in operating income across individual segments [5] - The LTL group reported operating income of $77.7 million, down from $96 million in the same quarter last year [5] - Despite the challenges, TFI announced a 4% increase in its quarterly dividend to 47 cents per share, effective January [4] Management Commentary - CEO Alain Bedard expressed optimism regarding the U.S. LTL operations, citing the unchanged OR as a sign of new segment leadership navigating a challenging freight environment [4] - Bedard highlighted the importance of average weight per shipment, which rose by 3.85%, as a key performance metric [2]

Core Insights - TFI International Inc. reported a decrease in total revenue for Q3 2025, amounting to $1.97 billion, down from $2.18 billion in the same period last year, primarily due to reduced volumes from weaker end market demand [4][8] - The company generated over $570 million in free cash flow year-to-date, exceeding the previous year's nine-month figure, which enhances its ability to operate and invest strategically [2][4] - The Board of Directors approved a 4% increase in the quarterly dividend to $0.47 per share, reflecting a commitment to returning excess capital to shareholders [6][18] Financial Highlights - Total revenue for Q3 2025 was $1,968.7 million, compared to $2,184.6 million in Q3 2024, marking an 11% decrease [4][8] - Adjusted EBITDA for Q3 2025 was $305.4 million, down from $357.2 million in Q3 2024 [32] - Net income for Q3 2025 was $84.7 million, compared to $125.9 million in Q3 2024, with diluted EPS decreasing from $1.48 to $1.02 [5][10] Segment Performance - The Less-Than-Truckload segment saw a revenue decrease of 11%, Truckload decreased by 7%, and Logistics decreased by 14% compared to Q3 2024 [7] - Operating income decreased by 19% for Less-Than-Truckload, 25% for Truckload, and 36% for the Logistics segment [7] Cash Flow and Shareholder Returns - Net cash from operating activities for Q3 2025 was $255.4 million, down from $351.1 million in Q3 2024 [13] - The company returned $104.8 million to shareholders during the quarter, including $37.3 million in dividends and $67.4 million in share repurchases [15] Guidance - For Q4 2025, TFI International expects adjusted diluted EPS to be in the range of $0.80 to $0.90, influenced by lower deliveries in the Logistics segment and weak overall freight demand [16]

Core Points - TFI International Inc. will release its third quarter financial results on October 30, 2025, after market close [1] - A webcast to discuss these results is scheduled for October 31, 2025, at 10:00 a.m. ET, which is a change from the previously announced time of 8:30 a.m. ET [1] Company Overview - TFI International Inc. is a leader in the North American transportation and logistics industry, operating in the United States, Canada, and Mexico through its subsidiaries [2] - The company focuses on creating shareholder value by identifying strategic acquisitions and managing a growing network of wholly-owned operating subsidiaries [2] - TFI International provides financial and operational resources to its subsidiaries, enhancing their business efficiency [2] - The company services various segments, including Less-Than-Truckload, Truckload, and Logistics [4]

Core Points - TFI International Inc. will release its financial results for Q3 2025 on October 30, 2025, after market close [1] - A webcast to discuss the results will be hosted on October 31, 2025, at 8:30 AM Eastern Time [1][3] Company Overview - TFI International Inc. is a leader in the North American transportation and logistics industry, operating in the U.S., Canada, and Mexico [2] - The company focuses on creating shareholder value through strategic acquisitions and managing a network of wholly-owned subsidiaries [2] - TFI International provides financial and operational resources to its subsidiaries to enhance their efficiency and business growth [2] Service Segments - TFI International operates in various segments including Less-Than-Truckload, Truckload, and Logistics [4]

Core Insights - TFI International Inc. reported a revenue of $2.04 billion for the quarter ended June 2025, reflecting a 10% decrease year-over-year, and an EPS of $1.34, down from $1.71 in the same quarter last year [1] - The revenue fell short of the Zacks Consensus Estimate of $2.05 billion by 0.77%, while the EPS exceeded the consensus estimate of $1.24 by 8.06% [1] Financial Performance Metrics - Adjusted Operating Ratio for Truckload was reported at 90.1%, better than the average estimate of 91% from three analysts [4] - Adjusted Operating Ratio for Less-Than-Truckload was 89.5%, compared to the average estimate of 91.6% [4] - Overall Adjusted Operating Ratio stood at 90.5%, against an average estimate of 91.1% [4] - Canadian LTL Tonnage was reported at 593.00 KTons, below the average estimate of 612.68 KTons [4] - U.S. LTL Tonnage was 842.00 KTons, slightly above the average estimate of 841.42 KTons [4] Revenue Breakdown - Revenue before fuel surcharge was $1.79 billion, matching the four-analyst average estimate, but representing an 8.5% year-over-year decline [4] - Fuel surcharge revenue was $243.62 million, below the average estimate of $263.28 million, marking a 19.7% decrease year-over-year [4] - Revenue from Logistics was $393.11 million, compared to the average estimate of $418.03 million, reflecting an 11.1% year-over-year decline [4] - Revenue from Less-Than-Truckload was $703.7 million, below the average estimate of $776.06 million, indicating an 11.4% year-over-year decrease [4] - Revenue from Truckload was $712.28 million, exceeding the average estimate of $665.74 million, but still showing a 3.4% decline year-over-year [4] Stock Performance - TFI International's shares returned +3.6% over the past month, while the Zacks S&P 500 composite increased by +4.9% [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]