Last Thursday, J.B. Hunt Transport Services (JBHT) reported mixed fourth-quarter 2024 results, wherein the company’s earnings missed the Zacks Consensus Estimate while revenues surpassed the same.

JBHT is the second S&P 500 member from the broader Zacks Transportation sector to report fourth-quarter 2024 results, with Delta Air Lines (DAL) being the first one to have reported its results on Jan. 10, 2025.

The mixed results naturally raise the question: Should investors buy, hold, or sell JBHT stock now? A more in-depth analysis is needed to make that determination. Before diving into JBHT’s investment prospects, let’s take a glance at its quarterly numbers.

Snapshot of JBHT’s Q4 Results

JBHT reported fourth-quarter 2024 earnings per share of $1.53, which fell short of the Zacks Consensus Estimate of $1.62. The earnings miss naturally disappointed investors, resulting in the stock plunging more than 7% since Jan. 16. The bottom line increased 4.1% on a year-over-year basis.  

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

Total operating revenues of $3.15 billion narrowly beat the Zacks Consensus Estimate of $3.13 billion but declined 4.8% year over year. The decline was mainly due to lower fuel surcharge revenues and yield pressure in its Intermodal segment. Total operating income for the reported quarter increased 2% year over year to $207 million.

Segmental Weakness & Higher Interest Expenses: Major Woes

J.B. Hunt's top line continues to grapple with weakness across the majority of its business segments. Fourth-quarter 2024 operating revenues of $2.78 billion, excluding fuel surcharge revenue, decreased 2% from the year-ago reported quarter. The downfall was owing to a 3% and 2% decline in revenue per load, excluding fuel surcharge revenue in Intermodal (JBI) and Truckload (JBT), respectively, a 4% decline in average trucks in Dedicated Contract Services (DCS), and a 22% decline in load volume in Integrated Capacity Solutions (ICS).

Further, higher net interest expense is likely to mar J.B. Hunt’s bottom line. JBHT continues to incur higher interest expenses owing to higher interest rates and debt issuance costs. Net interest expense for 2022 and 2023 increased 9.7% and 16.2% year over year, respectively. Net interest expense for 2024 increased 23.9% year over year due to higher effective interest rates and consolidated debt balance, partially offset by higher interest income.

J.B. Hunt’s weak cash position is worrisome. JBHT's cash and cash equivalents stood at $46.98 million at the end of the fourth quarter of 2024, much lower than the short-term debt of $500 million. This implies that the company does not have sufficient cash to meet its debt obligations.

Long-Term Debt to Capitalization

Image Source: Zacks Investment Research

Given these headwinds surrounding the stock, earnings estimates have been southbound, as shown below.

Image Source: Zacks Investment Research

Price Performance of JBHT 

JBHT’s disappointing price performance is not limited to the post-fourth-quarter earnings release. Over the past six months, shares of JBHT have underperformed its industry and the S&P 500, of which the company is a key member.

Moreover, JBHT's price performance compares unfavorably with that of industry players like Knight-Swift Transportation Holdings Inc. (KNX) over the past six months.

Six-Month Price Comparison

Time to Get Rid of JBHT

It is quite clear that JBHT is grappling with issues like consistent segmental weakness, higher net interest expense and weak cash position.  We believe that the negatives surrounding JBHT stock outweigh the company's efforts to provide sustainable, environment-friendly solutions for customers and reward shareholders through dividend payouts and share buybacks. As a result, the stock appears a risky bet for investors. The stock’s current Zacks Rank #5 (Strong Sell) justifies our analysis.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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