Benchmark maintains Saia stock Buy rating despite volume growth slowdown

Investing.com - Benchmark has reiterated its Buy rating and $325.00 price target on Saia Inc. (NASDAQ:SAIA), positioning the stock between analysts’ range of $250-$380, despite noting a slowdown in the company’s volume growth during the second quarter of 2024. According to InvestingPro data, the company maintains a healthy financial position with a market capitalization of $7.8 billion.

The research firm attributes Saia’s previously outsized volume growth compared to competitors to terminal openings from network expansion investments over recent years. However, challenging comparisons and the difficult freight environment are now affecting volume growth, which has slowed in Q2 while still outpacing competitors ODFL and XPO. InvestingPro analysis shows the company operates with moderate debt levels and maintains strong liquidity, with current assets exceeding short-term obligations at a ratio of 1.43.

Benchmark observes that Saia’s volumes remained generally flat from March to May, which is below seasonal norms but within the company’s expectations. The firm also notes that tonnage is trending lower than estimated due to seasonally declining weight, creating a headwind for revenue per shipment.

Saia is managing toward an 89% operating ratio for Q2, improved from 91.1% in Q1, through cost-cutting measures to adjust for lower volume. Based on sub-seasonal volumes in May and potentially June, Benchmark has lowered its estimates for Q2, fiscal year 2025, and fiscal year 2026, with its 2026 estimate now 8% below FactSet consensus.

Despite these near-term challenges, Benchmark maintains its Buy rating based on Saia’s long-term margin potential, which it believes is currently constrained by significant investments made during a weak industrial freight economy. Trading at a P/E ratio of 24.5, investors seeking deeper insights can access comprehensive analysis and 12 additional ProTips through InvestingPro’s detailed research report, part of its coverage of over 1,400 US stocks.

In other recent news, Saia Inc. has reported mixed results in its less-than-truckload (LTL) shipments for the initial months of the second quarter of 2025. The company experienced a 1.9% drop in LTL shipments per workday in April, followed by a 3.2% decline in May. However, LTL tonnage per workday rose by 4.4% in April, although it dipped slightly by 0.4% in May. Meanwhile, the weight per shipment increased by 6.5% in April and 3.0% in May, indicating a shift in the nature of shipments.

Goldman Sachs has upgraded Saia’s stock rating from Neutral to Buy, raising the price target to $410, reflecting a positive outlook on the company’s future performance. UBS has maintained its Buy rating with a price target of $305, expressing confidence in Saia’s potential for margin expansion and earnings per share growth over the long term. In contrast, Stifel has significantly reduced its price target from $480 to $277, while still maintaining a Buy rating, citing challenges in the first quarter related to tonnage and operating ratio.

Saia’s management has attributed first-quarter revenue shortfalls to adverse weather conditions and a decline in shipments at higher-margin legacy terminals. The company is expected to focus on recalibrating its network to address these issues and improve operations. Despite the mixed signals, analysts generally maintain a positive view of Saia’s core business and long-term prospects.

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