Knight-Swift Transportation Holdings Inc. (KNX) is currently mired in multiple headwinds, which, we believe, have made it an unimpressive investment option.

Let’s delve deeper.

Southward Earnings Estimate Revision: The Zacks Consensus Estimate for fourth-quarter 2024 earnings has been revised 15% downward over the past 90 days. For 2024, the consensus mark for earnings has moved 4.5% south in the same time frame. The bearish alterations in estimate revisions underscore a notable decline in brokers' confidence in the stock.

Weak Zacks Rank and Style Score: Knight-Swift currently carries a Zacks Rank #5 (Strong Sell). The company’s current Value Score of C shows its unattractiveness.

Unimpressive Price Performance: KNX has lost 2.9% so far this year against the industry’s surge of 4.3%.

YTD Price Comparison

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Negative Earnings Surprise History: KNX has a disappointing earnings surprise history. The company’s earnings lagged the Zacks Consensus Estimate in three of the last four quarters (outpaced the mark in the remaining quarter), delivering an average miss of 31.44%.

Earnings Expectations: Downbeat earnings expectations cast a shadow over a company’s prospects. For 2024, KNX’s earnings are expected to decline 38.95% year over year.

Other Headwinds: High costs related to driver wages, equipment, maintenance, fuel and other expenses are restricting Knight-Swift’s bottom-line growth. During the first nine months of 2024, salaries, wages and benefits expenses rose 18.6% year over year, while operations and maintenance expenses climbed 20.9%. Escalating fuel costs (up 6.7%) are also pushing up the operating costs. Total operating expenses increased 10% year over year to $5.38 billion in the first nine months of 2024.

KNX’s financial metrics indicate that its leverage is elevated, which is a massive negative for its shareholders. The company’s cash and equivalents were $166.35 million at the end of third-quarter 2024, which is lower than the long-term debt level of $1.50 billion. This implies that the company does not have enough cash to meet its debt obligations.

Stocks to Consider

Some better-ranked stocks from the Zacks Transportation sector are Expeditors International of Washington, Inc. (EXPD) and Wabtec Corporation WAB. Each stock presently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

EXPD has an impressive earnings surprise history. The company's earnings outpaced the Zacks Consensus Estimate in two of the trailing four quarters (missed the mark in the remaining quarter and met in the other quarter), delivering an average surprise of 4.75%.

The Zacks Consensus Estimate for EXPD’s 2024 earnings has been revised 6.4% upward over the past 90 days. EXPD has an expected earnings growth rate of 8.38% for 2024. Shares of EXPD have lost 4.5% so far this year.

WAB has an impressive earnings surprise history. The company's earnings outpaced the Zacks Consensus Estimate in three of the trailing four quarters (missed the mark in the remaining quarter), delivering an average surprise of 9.46%.

The Zacks Consensus Estimate for WAB’s 2024 earnings has been revised 2.5% upward over the past 90 days. WAB has an expected earnings growth rate of 28.55% for 2024. Shares of WAB have gained 57.4% so far this year.

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