Forward Air (FWRD) AI Stock Analysis

• Market Cap: $496.51M
• Dividend Yield: 0.86%
• Average Volume (3M): 915.34K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.61
• Revenue Growth: 50.11%
• EPS Growth: -682.50%
• Country: US
• Employees: 6,319
• Sector: Industrials
• Sector Strength: 83
• Industry: Integrated Freight & Logistics
• EPS (TTM): -0.35
• Shares Outstanding: 30,423,222
• 10 Day Avg. Volume: 758,765
• 30 Day Avg. Volume: 915,336
• PEG Ratio: >-0.01
• Price to Book (P/B): 2.38
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -4.73
• Enterprise Value/Market Cap: 5.11
• Enterprise Value/Revenue: 0.31
• Enterprise Value/Gross Profit: 14.37
• Enterprise Value/Ebitda: -0.88
• 1Y Price Target: $31.00
• Price Target Upside: 62.90% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 5

Forward Air's overall stock score of 53 reflects significant financial challenges, including declining profitability and high financial leverage. While there are some positive technical signals and improvements from the earnings call, these are overshadowed by valuation concerns and market uncertainties. The company needs strategic adjustments to enhance financial stability and performance.

Positive Factors

Cost Management

FWRD has been tracking ahead of plan on the annualized cost savings initiatives and reached $80m, which will be the run-rate in 1Q 2025 and beyond.

Financial Performance

The legacy Expedited Freight business improved materially with an EBITDA margin of 10.4%, a 380-bps improvement from the previous quarter.

Liquidity

Adding the cash to the $277m of availability under the amended reduced revolving credit facility, liquidity at the end of the quarter was $382m with much more financial flexibility.

Negative Factors

Earnings Guidance

There was little in the way of forward guidance which makes forecasting difficult.

Market Environment

The LTL market environment remains soft, and the management has a long way to go to repair the business from the actions of the previous management.

Strategic Review

Activist shareholders are getting impatient with the lack of any results from the strategic review announced earlier.

Forward Air Business Overview & Revenue Model

Company Description

Forward Air Corporation (FWRD) is a leading asset-light freight and logistics company that specializes in expedited less-than-truckload (LTL) services across North America. The company operates through various segments, including expedited LTL, intermodal, pool distribution, and truckload services. Forward Air is known for its efficient and reliable transportation solutions, serving a wide range of industries with a focus on time-sensitive shipments.

How the Company Makes Money

Forward Air Corporation generates revenue primarily through its expedited less-than-truckload (LTL) services, which cater to businesses needing fast and reliable transportation of smaller freight volumes. The company's revenue model is built on providing premium, time-definite transportation services, which command higher rates than traditional LTL services. Additionally, Forward Air offers intermodal services that utilize rail and road networks to optimize cost and efficiency, pool distribution services for retail and other industries requiring distribution from a central point to multiple destinations, and truckload services for larger shipments. Strategic partnerships with airlines, freight forwarders, and logistics companies enhance its service offerings and expand its customer base, contributing to its earnings.

Forward Air Financial Statement Overview

Summary

Forward Air's financial statements indicate significant challenges. The income statement shows a drastic decline in profitability with negative net profit margin and inconsistent revenue growth. The balance sheet reveals high financial leverage with a concerning debt-to-equity ratio and negative return on equity. Cash flow trends are negative, suggesting operational inefficiencies and potential liquidity constraints. Overall, the financial position is unstable, necessitating urgent strategic adjustments.

Income Statement

The income statement reveals a significant decline in profitability with a negative net profit margin of -33.02% in the TTM, down from a positive 12.21% in 2023, reflecting substantial losses. Gross profit margin decreased to 7.14% in TTM. Revenue growth has been inconsistent, with a notable decline in 2024 compared to 2023. The EBIT margin also decreased to 1.20% in TTM. These metrics indicate potential challenges in maintaining profitability and revenue growth.

Balance Sheet

The balance sheet shows a concerning financial leverage with a debt-to-equity ratio of 1.95 in TTM, reflecting high reliance on debt. Return on equity has turned negative at -338.32% due to net losses, suggesting poor returns for shareholders. The equity ratio decreased to 8.52%, indicating a weakened equity position. These factors highlight financial instability and increased risk.

Cash Flow

The cash flow statement presents negative free cash flow in TTM, indicating challenges in generating cash after capital expenditures. The operating cash flow to net income ratio is negative, suggesting operational inefficiencies. The free cash flow to net income ratio reflects significant cash flow issues. The declining cash flow metrics point to potential liquidity constraints.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
2.47B	1.37B	1.97B	1.66B	1.27B
	Gross Profit
339.65M	330.15M	546.82M	365.33M	229.11M
	EBIT
-1.06B	88.21M	265.98M	159.30M	73.92M
	EBITDA
-916.64M	145.62M	290.14M	198.85M	111.05M
	Net Income Common Stockholders
-816.97M	167.35M	193.19M	105.86M	52.77M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
104.90M	121.97M	45.82M	37.32M	40.25M
	Total Assets
2.80B	2.98B	1.21B	1.12B	1.05B
	Total Debt
2.15B	1.95B	277.85M	320.07M	243.24M
	Net Debt
2.04B	1.82B	232.03M	282.75M	202.98M
	Total Liabilities
2.52B	2.22B	500.83M	524.17M	500.44M
	Stockholders Equity
201.73M	764.26M	707.24M	593.65M	547.33M
Cash Flow		Free Cash Flow
-112.46M	150.66M	218.36M	81.15M	63.84M
	Operating Cash Flow
-75.40M	181.39M	259.09M	120.26M	84.11M
	Investing Cash Flow
-1.61B	174.84M	-104.46M	-88.31M	-82.71M
	Financing Cash Flow
-163.83M	1.55B	-146.12M	-34.89M	-26.45M

Forward Air Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 19.03
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FWRD, the sentiment is Positive. The current price of 19.03 is above the 20-day moving average (MA) of 15.90, above the 50-day MA of 17.57, and below the 200-day MA of 28.88, indicating a neutral trend. The MACD of 0.01 indicates Negative momentum. The RSI at 59.42 is Neutral, neither overbought nor oversold. The STOCH value of 70.33 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FWRD.

Forward Air Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CHRW	70 Outperform	$11.39B	22.92	32.11%	2.78%	-0.22%	65.52%
JBHT	69 Neutral	$13.44B	24.61	13.97%	1.28%	-3.82%	-12.80%
HUBG	68 Neutral	$2.04B	19.46	6.35%	1.50%	-4.63%	-18.94%
LSTR	65 Neutral	$4.74B	24.59	20.03%	1.04%	-9.13%	-25.11%
Sector *	64 Neutral	$4.30B	11.88	5.23%	249.82%	4.12%	-10.27%
XPO	63 Neutral	$13.08B	34.16	26.24%	―	1.94%	60.91%
FWRD	53 Neutral	$496.51M	―	-147.96%	0.86%	50.11%	-682.50%

Forward Air Corporate Events

Forward Air Enhances Financial Flexibility for Growth

Forward Air Corporation’s subsidiary, Clue Opco LLC, has amended its Credit Agreement to increase its financial flexibility for future growth. The amendment includes changes to the financial performance covenant, reduction in revolving credit commitments, and new restrictions on certain financial activities, aiming to support the company’s long-term strategic objectives.