Capitalcube gives Swift Transportation Co. a score of 44.
Our analysis is based on comparing Swift Transportation Co. with the following peers – USA Truck, Inc., Celadon Group, Inc., Heartland Express, Inc., P.A.M. Transportation Services, Inc., J.B. Hunt Transport Services, Inc., Covenant Transportation Group, Inc. Class A, Knight Transportation, Inc., Universal Logistics Holdings, Inc., Werner Enterprises, Inc. and Marten Transport, Ltd. (USAK-US, CGI-US, HTLD-US, PTSI-US, JBHT-US, CVTI-US, KNX-US, ULH-US, WERN-US and MRTN-US).
Swift Transportation Co. has a fundamental score of 44 and has a relative valuation of UNDERVALUED.
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- With respect to peers, relative outperformance over the last year is in contrast to the more recent underperformance.
- Swift Transportation Company Class A currently trades at a higher Price/Book ratio (3.23) than its peer median (1.98).
- We classify SWFT-US as Harvesting because of the market’s relatively low growth expectations despite its relatively high returns.
- SWFT-US‘s median net profit margins and relatively high asset efficiency give it some operating leverage.
- Changes in annual earnings are in line with its chosen peers but lags in terms of revenue, implying the company is cost conscious and selective about spending for growth.
- SWFT-US‘s return on assets currently and over the past five years is around the peer median and suggest that it does not have any particular operational advantages versus peers.
- The company’s relatively low gross margin and median pre-tax margin suggest operations may be constrained on pricing versus peers.
- While SWFT-US‘s revenue growth in recent years has been above the peer median, the stock’s P/E ratio is less than the peer median suggesting that the company’s earnings may be peaking and the market expects a decline in its growth expectations.
- The company’s capital investment program suggests it is under-investing in a business that is producing peer median returns.
- SWFT-US might have enough interest coverage to take-on additional debt prudently.
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Leverage & Liquidity
SWFT-US might have enough interest coverage to take-on additional debt.
- While SWFT-US‘s debt to enterprise ratio of 30.72% is on the high side compared to an overall benchmark of 25% (Note: The peer median is currently 30.72%), it also enjoys a relatively high interest coverage level of 8.15x which may give the company enough financial strength to support additional debt. Thus, the company is classified as having Some Capacity to raise more debt.
- Of the 10 chosen peers for the company, only 9 of the stocks have an outstanding debt balance. Companies with no debt include HTLD-US.
SWFT-US has maintained its Some Capacity profile from the recent year-end.
- SWFT-US‘s interest coverage has declined 0.79 points from last year’s high but remains above its five-year average interest coverage of 4.20.
- The decrease in its interest coverage to 8.15x from 8.94x (in 2015) was also accompanied by a decrease in its peer median during this period to 7.82x from 10.36x.
- Interest coverage rose 1.75 points relative to peers (and is now higher than its peer median).
- SWFT-US‘s debt-EV is less than (but within one standard deviation of) its five-year average debt-EV of 45.80%.
- Like the interest coverage trend, the decrease in its debt-EV (to 30.72% from 44.48%) was also accompanied by a decrease in its peer median during this period (to 30.72% from 37.58%).
- Relative to peers, debt-EV fell 6.90 percentage points.
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Key Liquidity Items
|Company||Debt/Enterprise Value (%)||Current Ratio||Interest Coverage (x)||Cash Flow To Total Debt (%)|
|USA Truck, Inc.||64.06||1.23||2.51||30.91|
|Celadon Group, Inc.||64.48||1.16||1.38||18.48|
|Heartland Express, Inc.||0||2.3||No interest exp||999|
|P.A.M. Transportation Services, Inc.||61.79||1.18||5.2||33.48|
|J.B. Hunt Transport Services, Inc.||9.4||1.4||30.54||95.6|
|Covenant Transportation Group, Inc. Class A||39.16||1.31||7.49||51.21|
|Knight Transportation, Inc.||2.22||2.44||146.29||432.56|
|Universal Logistics Holdings, Inc.||40.5||1.32||6.12||30.16|
|Werner Enterprises, Inc.||8.27||1.94||61.75||222.11|
|Marten Transport, Ltd.||1.26||1.42||0||2029.73|
|Swift Transportation Company Class A||30.72||1.55||8.15||36.95|
|Best In Class||1.26||2.44||No interest exp||2029.73|
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Swift Transportation Co. engages in the provision of transportation solutions. It operates through the following segments: Truckload, Dedicated, Central Refrigerated, and Intermodal. The Truckload segment consists of one-way movements over irregular routes throughout the United States, Mexico, and Canada. The Dedicated segment offers tailored solutions under long-term contracts. The Central Refrigerated segment consists of shipments for customers that require temperature-controlled trailers. The Intermodal segment includes revenues generated by moving freight over the rail in the company’s containers and other trailing equipment, and revenues for drayage to transport loads between the railheads and customer locations. The company was founded by Jerry C. Moyes in 1966 and is headquartered in Phoenix, AZ.
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