Knight-Swift Continues to Grapple With Rising Operating Expenses

Knight-Swift Transportation Holdings Inc. KNX is currently mired in multiple headwinds, which, we believe, have made it an unimpressive investment option.Factors Weighing on KNX Stock: High costs related to driver wages, equipment, maintenance, fuel and other expenses are restricting Knight-Swift’s bottom-line growth. During the first nine months of 2024, salaries, wages and benefits expenses rose 18.6% year over year, while operations and maintenance expenses climbed 20.9%. Escalating fuel costs (up 6.7%) are also pushing up the operating costs. Total operating expenses increased 10% year over year to $5.38 billion in the first nine months of 2024.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.Driver shortage continues to be a major challenge facing the trucking industry. As old drivers retire, trucking companies find it difficult to hire drivers since the job does not appeal to the younger generation.Partly due to these headwinds, shares of KNX have plunged 5.4% over the past year compared with the industry’s loss of 20%.Image Source: Zacks Investment ResearchSouthward Earnings Estimate Revision:The negative sentiment surrounding the stock is evident from the fact that the Zacks Consensus Estimate for first-quarter 2025 earnings has been revised 20.5% downward over the past 90 days. For 2025, the consensus mark for earnings has moved 14.5% south in the same time frame. The bearish alterations in estimate revisions underscore a notable decline in brokers' confidence in the stock.KNX’s Zacks Rank: Knight-Swift currently carries a Zacks Rank #4 (Sell).Negative Earnings Surprise History: KNX has a disappointing earnings surprise history. The company’s earnings lagged the Zacks Consensus Estimate in three of the last four quarters (outpaced the mark in the remaining quarter), delivering an average miss of 31.44%.Stocks to ConsiderInvestors interested in the Zacks Transportation sector may also consider some better-ranked stocks such as American Airlines AAL and United Airlines UAL.American Airlines currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. AAL has an expected earnings growth rate of 16% for the current year. The company 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 124.4%. Shares of AAL have risen 16.4% in the past year.United Airlines currently carries a Zacks Rank #2 (Buy). UAL has an expected earnings growth rate of 1.3% for the current year.The company has an encouraging track record with respect to the earnings surprise, having surpassed the Zacks Consensus Estimate in each of the trailing four quarters. The average beat is 26.9%. Shares of UAL have climbed 122.9% in the past year.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report United Airlines Holdings Inc (UAL): Free Stock Analysis Report Knight-Swift Transportation Holdings Inc. (KNX): Free Stock Analysis Report American Airlines Group Inc. (AAL): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks