Recently, TFI International revealed its Q1 2025 earnings, showing an increase in sales to $1,714 million and revenue to $1,964 million, compared to the same period last year. However, net income and earnings per share declined, indicating pressure on profitability. This earnings report likely added weight to the stock's 3% gain over the past week, against the backdrop of broader market movements, as major indexes rose on investors digesting various earnings announcements. The market's optimism was further bolstered by gains in tech stocks, contributing to a favorable environment for other sectors.

Be aware that TFI International is showing 2 possible red flags in our investment analysis.

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TFI International's recent earnings release highlights a challenging environment, with rising sales but declining net income. These challenges are underscored by issues with declining freight volumes and cost management that could pressure revenue and earnings forecasts. The company’s focus on efficiency, through initiatives like the Daseke acquisition and tech upgrades, could address profitability concerns, although uncertainties remain given the external economic environment.

Over a five-year span, TFI International's total shareholder return was 192.64%, indicating robust long-term performance. However, the last year has been difficult, with its shares underperforming the Canadian Transportation industry, which declined by 8.8%. This contrast with the long-term trend suggests ongoing market challenges.

TFI's current share price movement, given its 3% weekly gain against broader market optimism, stands in the shadow of analyst expectations, which set a consensus price target at CA$141.97. This target indicates a potential upside from the current price of CA$106.14. The undervaluation suggests market skepticism about realizing projected growth and improved margins amid current operational and economic hurdles.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include TSX:TFII.

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