Hub Group: Steamrolled By An Intermodal Market With Little Demand And High Truckload Capacity

Oct. 28, 2023 5:00 PM ETHub Group, Inc. (HUBG) StockHUBG
Stephen Simpson
20.39K Followers

Summary

  • Hub Group's third-quarter results showed another steep decline in revenue and profitability, driven by weak pricing and volumes in the intermodal business.
  • Hub Group's management expects a muted peak season and anticipates further declines in intermodal volumes, but remains focused on growing the business and investing in technology.
  • Excess truckload capacity and weak rates have undermined the intermodal sector in recent quarters, but there are still significant volume conversion opportunities, as well as future growth tied to nearshoring.
  • Hub Group's business may not have bottomed yet, but the valuation is getting more attractive for investors willing to take a longer-term outlook.

Intermodal Freight Yard with Los Angeles Skyline at Sunset

halbergman

I thought that 2023 was going to be a rough year for transportation providers given high inventories and excess capacity exiting 2022, but this year has developed even worse than I expected, as demand has continued to underwhelm and marginal

This article was written by

20.39K Followers
Stephen Simpson is a freelance financial writer and investor.Spent close to 15 years on the Street (sell-side, buy-side, equities, bonds).

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