Investors with an interest in Transportation - Services stocks have likely encountered both ZTO Express (Cayman) Inc. (ZTO) and TFI International Inc. (TFII) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank favors stocks w ...

Company Overview - TFI International Inc. is a leading North American provider of transportation and logistics services, operating through multiple segments to deliver comprehensive freight and supply chain solutions [5] - The company leverages a large fleet and a network of independent contractors to maintain flexibility and scale across diverse markets [5] - TFI operates a diversified business model with both asset-based and asset-light segments, generating revenue from freight transportation, dedicated logistics, and brokerage services [7] Financial Performance - As of September 30, 2025, TFI International reported a revenue of $8.06 billion and a net income of $323.46 million [4] - The company has a dividend yield of 1.81% [4] - TFI shares were priced at $99.17 as of December 10, 2025, reflecting a decline of about 35% over the past year, underperforming the S&P 500 by 48 percentage points [3] Investment Activity - Dixon Mitchell Investment Counsel increased its position in TFI International by purchasing 93,705 shares, bringing its total holding to 912,039 shares valued at approximately $80.72 million [2][3] - The increased stake now represents 2.87% of Dixon Mitchell's assets under management (AUM) [3] - Dixon Mitchell has nearly doubled its shares in TFI since late 2024, indicating a belief in the company's potential as a buy-the-dip opportunity [9] Valuation and Growth Potential - TFI is currently trading at 26 times earnings and 12 times free cash flow (FCF), suggesting it trades at a discount to the broader market [10] - The company has an average cash return on invested capital (ROIC) of 14% over the last five years, showcasing a strong track record of profitable acquisitions [10] - TFI has been a significant performer since 2003, with sales growing by an average of 14% annually over the last decade, indicating its status as a top-tier compounder [11]

Investors interested in stocks from the Transportation - Services sector have probably already heard of ZTO Express (Cayman) Inc. (ZTO) and TFI International Inc. (TFII) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The Zacks Rank favors stocks with strong earnings e ...

Core Insights - The logistics sector has seen significant engagement from investors, particularly in the ASEAN and US markets, highlighting its growth potential and diversification opportunities [1] Investment Focus - The company has diversified its investments across various sectors including banking, telecommunications, logistics, and hotels, indicating a strategic approach to portfolio management [1] - The entry into the US market in 2020 reflects a growing interest in international investment opportunities, particularly in sectors like banks, hotels, and logistics [1] Market Trends - The popularity of insurance companies in the Philippines since 2014 suggests a shift in investment preferences among local investors, moving towards more diversified financial products [1] - The trend of using platforms like Seeking Alpha for analysis indicates a growing reliance on data-driven insights for investment decisions in both the ASEAN and US markets [1]

Core Insights - The logistics sector has seen significant engagement from investors, particularly in the ASEAN and US markets, highlighting its growth potential and diversification opportunities [1] - The popularity of insurance companies in the Philippines since 2014 indicates a shift in investment strategies among local investors, moving towards a more diversified portfolio [1] - The entry into the US market in 2020 reflects a growing interest in international investments, particularly in sectors such as banking, hotels, and logistics [1] Investment Strategies - Initial investments were focused on blue-chip companies, showcasing a common strategy among investors to seek stability and reliability [1] - The diversification into various industries and market cap sizes demonstrates a strategic approach to risk management and potential returns [1] - The use of platforms like Seeking Alpha for analysis indicates a trend towards utilizing external resources for informed investment decisions [1] Market Trends - The logistics and shipping industries are highlighted as key areas of investment, suggesting their importance in the current economic landscape [1] - The increasing engagement in the US market by investors from the Philippines points to a broader trend of globalization in investment practices [1] - The focus on banking and telco sectors in both ASEAN and US markets indicates their critical role in the overall economic framework [1]

Core Viewpoint - ZTO Express (Cayman) Inc. is currently viewed as a better value opportunity compared to TFI International Inc. based on various financial metrics and analyst outlooks [1]. Valuation Metrics - ZTO has a forward P/E ratio of 12.18, significantly lower than TFII's forward P/E of 20.28, indicating ZTO may be undervalued [5]. - The PEG ratio for ZTO is 3.93, while TFII's PEG ratio is 4.86, suggesting ZTO has a more favorable earnings growth outlook relative to its price [5]. - ZTO's P/B ratio stands at 1.25, compared to TFII's P/B of 2.68, further indicating ZTO's stock may be undervalued relative to its book value [6]. Analyst Outlook - ZTO holds a Zacks Rank of 2 (Buy), reflecting a positive earnings estimate revision trend, while TFII has a Zacks Rank of 5 (Strong Sell), indicating a less favorable outlook [3]. - The solid earnings outlook for ZTO, combined with its favorable valuation metrics, positions it as the superior value option in the current market [7].

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]