Saia, Inc. (SAIA): Did This Logistics Stock Get a Good Rating from Analysts?

We recently compiled a list of the 10 Best Logistics Stocks to Buy Now. In this article, we are going to take a look at where Saia, Inc. (NASDAQ:SAIA) stands against the other logistics stocks. You can also check out the 20 Biggest Logistics Companies in the US here.

The logistics industry is experiencing major developments, which bring both risks and opportunities. These changes are being driven by new technology, more competitors, changing customer expectations, and new business models. The global logistics market was valued at nearly $2.6 trillion in 2022. The market is projected to grow to $4.5 trillion by 2027, expanding at a compound annual growth rate of 11.5%.

Meanwhile, the US Freight and Logistics Market is predicted to reach a value of $1.67 trillion by 2030. The domestic market is seeing expansion due to an increase in e-commerce trade within the country. The e-commerce sector saw a growth of over 14% year-over-year in 2023 to reach $925 billion. The number of e-commerce users is predicted to increase from 264.5 million in 2021 to 289.9 million by 2027. There is rising demand for logistical services particularly among online retailers that do not operate physical stores and rely heavily on third-party warehousing.

Technology is reshaping how logistics companies function. Those who succeed will be the ones who can effectively use new technologies like data analytics and platform solutions. Data analytics is considered significantly more important in the transportation and logistics (T&L) sector over the next five years compared to other industries. Around 90% of experts in T&L prioritize these aspects, higher than the average of 83% seen across other sectors.

The potential for growth is high, yet the logistics industry has been slow to capitalize on it. According to a report by PWC, only 28% of T&L companies consider themselves 'advanced' in digitization. In comparison, 41% of automotive companies and 45% of electronics companies already view themselves as advanced. The main hurdle for transportation and logistics firms lies in developing a 'digital culture' and providing good training.

The majority of newcomers in the logistics sector are startups, and many of them aim to use new technology to establish their presence in the industry. So far, most of these startups operate in asset-light segments of the value chain, such as virtual freight forwarding. Private equity flows in digital logistics startups since 2011 have surpassed $150 million, whereas funding from legacy logistics companies is less than $10 million.

Our Methodology

To shortlist the best logistics stocks, we relied on Insider Monkey’s database of 920 hedge funds as of Q1 2024 to analyze the hedge fund sentiment for each stock. We picked the logistics stocks with the highest number of hedge fund investors. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).

A long line of trucks transporting goods across the open road, symbolizing the long-distance transportation services of the company.

Saia, Inc. (NASDAQ:SAIA)

Number of Hedge Fund Holders: 38

Value of Hedge Fund Holdings: $561,605,000

Saia, Inc. (NASDAQ:SAIA)  is a less-than-truckload trucking company that was established in 1924 in Houma, LA. The company also specializes in non-asset truckload service and third-party logistics.

In Q1 2024, Saia, Inc. (NASDAQ:SAIA) reported a net profit margin of 12.02%, reflecting an over 4% YoY increase. Meanwhile, the operating income of $117.91 million observed an over 18% YoY increase. EPS was reported at $3.38, reflecting a rise of 18.6% over the last year.

Analysts have evaluated Saia, Inc. (NASDAQ:SAIA) stock and provided 12-month price targets over the past three months, resulting in an average target price of $525.92. The price targets range from a low of $445 to a high of $578.

The new average price target represents a 14.18% increase from the previous average target of $460.6, indicating a generally optimistic outlook on the stock. Based on recommendations from 14 analysts, the stock is rated as a "Moderate Buy."

Here’s what Madison Investments said about Saia, Inc. (NASDAQ:SAIA) in its Q4 2023 investor letter:

“Our best performing stock on an absolute basis for the year was Saia, Inc. (NASDAQ:SAIA), which benefited greatly from its improving return profile. The company has made admirable progress in improving its margins and growing capacity. While the transportation market slowed from an overheated 2022, 2023 held up better than expected and SAIA’s results exceeded expectations. SAIA also benefited from the bankruptcy of one its larger competitors, which tightened the market and helped expand SAIA’s multiple by almost 10 points.”

Overall SAIA ranks 8th on our list of the best logistics stocks to buy. You can visit 10 Best Logistics Stocks to Buy Now to see the other logistics stocks that are on hedge funds’ radar. While we acknowledge the potential of SAIA as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than SAIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

 

READ NEXT: Analyst Sees a New $25 Billion “Opportunity” for NVIDIA and Jim Cramer is Recommending These 10 Stocks in June.

 

Disclosure: None. This article is originally published at Insider Monkey.