KnightSwift Down 49.5% YTD: What's Hurting the Stock?

Core Viewpoint - KnightSwift Transportation (KNX) has experienced a significant decline in share price, down 49.5% year-to-date, contrasting sharply with the broader market performance, including a 17.9% rise in the S&P 500 index [1] Financial Performance - The Zacks Consensus Estimate for KNX's 2024 earnings is projected at $1.12 per share, reflecting a 35% decline from 2023's actual earnings [3] - Revenue estimates for 2024 stand at $7.61 billion, indicating a 3.5% decrease from the previous year [3] - Current-quarter earnings are estimated at 35 cents per share, representing a 14.6% year-over-year decline, while revenues are expected to be $1.95 billion, also down 3.5% year-over-year [4] Growth Challenges - Weak freight demand is negatively impacting revenues, compounded by high operational costs related to driver wages, equipment, maintenance, and fuel [4] - The company's liquidity position is concerning, with cash and cash equivalents of $336 million and a current ratio of 0.88, indicating insufficient cash to meet current debt obligations [5] - The times interest earned ratio of 1.5 is significantly lower than the industry average of 9, highlighting financial strain [5] Positive Developments - KnightSwift reported an 18.9% year-over-year increase in revenues for Q2 2024, largely driven by the acquisition of U.S. Xpress Enterprises, effective July 1, 2023 [6] - Revenues, excluding truckload and LTL fuel surcharge, grew 18.1% year-over-year to $1.64 billion [6] - The Less-Than-Truckload segment generated revenues of $263.09 million in Q2 2024, up 15.1% year-over-year [7] Overall Outlook - Despite some areas of strength, projected declines in earnings and revenues, along with liquidity concerns, suggest that KnightSwift may face challenges in maintaining its growth momentum [8]