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 first-quarter 2025 earnings has moved 9.6% south in the past 90 days. For the current year, the consensus mark for earnings has been revised to 7.4% downward in the same time frame. The unfavorable estimate revisions indicate brokers’ lack of confidence in the stock.

Dim Price Performance:  The company’s price trend reveals that its shares have lost 26% so far this year compared with the transportation-truck industry’s 22.4% decline.

KNX Stock YTD Price Comparison

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

Negative Earnings Surprise History: KNX has a disappointing earnings surprise history. The company’s earnings lagged the Zacks Consensus Estimate in two of the last four quarters (outpaced the mark in the remaining two quarters), delivering an average miss of 8.96%.

Other Headwinds: High costs related to driver wages, equipment, maintenance, fuel and other expenses are restricting Knight-Swift’s bottom-line growth. During 2024, salaries, wages and benefits expenses rose 13.8% year over year, while operations and maintenance expenses climbed 15.5%. Total operating expenses increased 5.3% year over year to $7.16 billion in 2024. High costs naturally put pressure on margins.

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.

The truck industry, of which Knight-Swift is an integral part, has been persistently battling a driver shortage for several years. As old drivers are retiring, trucking companies are finding it difficult to find new drivers to take their place since the low-esteem jobs mostly do not appeal to the younger generation.

Bearish Industry Rank 

The industry to which KNX belongs currently has a Zacks Industry Rank of 234 (out of 248 groups). Such a weak rank places the industry in the bottom 5% of the Zacks industries. Studies have shown that 50% of a stock price movement is directly tied to the performance of the industry group that it hails from.

In fact, a robust stock in a weak industry is likely to underperform an ordinary stock in a strong group. Therefore, considering the industry’s performance becomes imperative.

Stocks to Consider

Investors interested in the Zacks Transportation sector may also consider Air Transport Services Group ATSG and Expeditors International of Washington EXPD.

Air Transport Services

Air Transport Services Group currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

ATSG has an expected earnings growth rate of 31% for the current year. The Zacks Consensus Estimate for ATSG’s 2025 earnings has remained constant over the past 90 days.

ATSG has an impressive earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in three of the trailing four quarters and missed once, delivering an average beat of 6.1%. Shares of ATSG have gained 50.1% in the past six months.

Expeditors

EXPD carries a Zacks Rank of 2 at present. The Zacks Consensus Estimate for EXPD’s 2025 earnings has been revised upward by 2.2% over the past 90 days.

EXPD has an encouraging track record regarding earnings surprise, having surpassed the Zacks Consensus Estimate in three of the trailing four quarters and met it once. The average surprise was 11.6%. Shares of EXPD have plunged 10.9% in the past six months.

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Expeditors International of Washington, Inc. (EXPD) : Free Stock Analysis Report

Knight-Swift Transportation Holdings Inc. (KNX) : Free Stock Analysis Report

Air Transport Services Group, Inc (ATSG) : Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research