Update: Old Dominion Freight Line Earnings

| About: Old Dominion (ODFL)


The company managed to beat on the top and bottom lines.

We still have a long-term bullish outlook on the company given the rising economy, but the price may no longer be right.

We expected the company to post a solid quarter thanks to improving operational efficiencies.

Old Dominion Freight Line (NASDAQ:ODFL) posted 2Q earnings of $0.86 (beating $0.83 consensus) and revenues came in at $703 million (topping $692 million consensus). The company continues to hit on all cylinders, with 2Q operating ratio coming in at 82.5%, the best ever for the company. And its on-time delivery performance was 99% for the quarter.

Shares are up 47% since we first covered the stock back in July of last year. The stock is now trading right at our fair value estimate. Its EV/EBITDA multiple is also up to a more reasonable 11.3x. We think now's a good time to take profits and give the company a chance to implement some long-term initiatives to accelerate long-term growth. As we noted last July,

The company also has a $3 billion revenue target that it plans to hit by either 2015 or 2016. By our estimates, which in most cases are conservative, the company will generate $2.7 billion in revenue in 2015.

Wall Street consensus has the company hitting $3 billion in revenues for 2015 and EPS is expected to grow 17% y/y to $3.44.

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