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1. Company Snapshot

1.a. Company Description

TFI International Inc.provides transportation and logistics services in the United States, Canada, and Mexico.The company operates through Package and Courier, Less-Than-Truckload (LTL), Truckload (TL), and Logistics segments.


The Package and Courier segment engages in the pickup, transport, and delivery of items.The LTL segment is involved in the pickup, consolidation, transportation, and delivery of smaller loads.The TL segment offers expedited transportation, flatbed, tank container, and dedicated services, as well as TL brokerage services.


This segment carries full loads directly from the customer to the destination using a closed van or specialized equipment.The Logistics segment provides asset-light logistics services, including brokerage, freight forwarding, and transportation management, as well as small package parcel delivery.As of December 31, 2021, the company had 13,384 tractors, 50,091 trailers, and 9,428 independent contractors.


The company was formerly known as TransForce Inc.and changed its name to TFI International Inc.in December 2016.


TFI International Inc.is headquartered in Saint-Laurent, Canada.

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1.b. Last Insights on TFII

TFI International's recent performance was negatively impacted by a 25.16% earnings surprise and 6.89% revenue miss in Q4 2024. The company's operating income declined, and its claims ratio worsened, leading to a reset of margin expectations. Additionally, customer loss became evident, and the company's freight segment, Tforce, faced significant challenges. Furthermore, TD Cowen and RBC lowered their price targets on the stock to $135 and $127, respectively, citing the company's struggles.

1.c. Company Highlights

2. TFI International's Q3 2025 Earnings: A Deeper Dive

TFI International reported total revenue before fuel surcharge of $1.7 billion, a decline from $1.9 billion in the year-ago quarter. The company's operating income was $153 million, with a margin of 8.9%. Adjusted net income was $99 million, compared to $134 million in the third quarter of 2024, and adjusted EPS was $1.20, relative to $1.58 in the year-ago quarter. Notably, the actual EPS came out at $1.67, beating estimates of $0.862.

Publication Date: Nov -09

📋 Highlights
  • Free Cash Flow Strength:: Generated over $570 million year-to-date, enabling $67M share repurchases and a 4% dividend hike to $0.47/share (2% yield).
  • Margin Compression:: Operating income fell to $153M ($8.9M margin) vs. $134M in Q3 2024, with adjusted EPS dropping to $1.20 from $1.58.
  • Q4 Guidance Cut:: Adjusted EPS forecast narrowed to $0.80–$0.90, with full-year CapEx reduced to $100–175M (down from $200M) due to low volumes.
  • Service Improvements:: Small/medium revenue up 27.4%, on-time service improved 340 bps, and missed pickups fell 60%.
  • OR Outlook:: 200–300 bps operating ratio improvement expected in 2026 despite Q4 deterioration, driven by AI investments and network optimization.

Financial Performance

The company's financial performance was impacted by a subdued LTL market, with Alain Bedard, Chairman, President and Chief Executive Officer, noting that the market remains challenging. Despite this, TFI's balance sheet remains strong, with a funded debt-to-EBITDA ratio of 2.4x. The company repurchased a total of $67 million worth of shares during the quarter, bringing its total return of capital to shareholders to more than $100 million.

Operational Highlights

TFI is investing in AI to improve efficiency and provide better service, with a focus on quality of revenue, growing the number of shipments, and improving the operating ratio. The company has made progress in improving its service, with 4-day service improving, and next-day service on par with peers. As Alain Bedard noted, "the sun is coming up for the U.S. market, with velocity down but revenue per mile up."

Guidance and Outlook

For the fourth quarter, TFI expects adjusted diluted EPS to be in the range of $0.80 to $0.90. The company now expects full-year net CapEx, excluding real estate, to be $100 million to $175 million, compared to $200 million earlier. Analysts estimate next year's revenue growth at 2.7%, indicating a potential rebound in freight volumes.

Valuation

TFI International's current valuation metrics indicate a P/E Ratio of 19.86, P/B Ratio of 2.72, and EV/EBITDA of 8.05. The Dividend Yield is 2.07%, and the Free Cash Flow Yield is 10.19%. With a ROIC of 7.45% and ROE of 13.63%, the company's profitability metrics are stable. The Net Debt / EBITDA ratio is 2.35, indicating a manageable debt level.

3. NewsRoom

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Should You Rethink TFI International After Five Years of 95% Growth and Recent Acquisitions?

Nov -29

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A Fresh Look at TFI International (TSX:TFII) Valuation Following Latest Earnings Results

Nov -29

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ZTO vs. TFII: Which Stock Is the Better Value Option?

Nov -24

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TFI’s Bedard sees a stronger 2026 after a weak 4Q

Nov -04

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Freight Recession Drags On: Trucking Volumes Slide Again Despite Capacity Exits

Nov -03

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RBC Cuts TFI International's Price Target to US$102 from US$106

Nov -03

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Will TFI International's (TSX:TFII) Dividend Hike Amid Lower Earnings Shift Its Investment Story?

Nov -01

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TFI operating income drops amid US woes

Oct -31

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.71%)

6. Segments

Less-Than-Truckload

Expected Growth: 4.65%

TFI International Inc.'s Less-Than-Truckload (LTL) segment growth of 4.65% is driven by increasing e-commerce demand, rising industrial production, and a strong US economy. Additionally, the company's strategic acquisitions, investments in digitalization, and focus on operational efficiency have contributed to the growth. Furthermore, the LTL segment's ability to adapt to changing market conditions and provide flexible shipping solutions has also supported the growth.

Truckload

Expected Growth: 4.83%

TFI International Inc.'s Truckload segment growth of 4.83% is driven by increasing demand for e-commerce and online shopping, resulting in higher freight volumes. Additionally, the company's strategic acquisitions and investments in digital technologies have improved operational efficiency, leading to increased capacity and better asset utilization.

Logistics

Expected Growth: 4.65%

TFI International Inc.'s logistics segment growth of 4.65% is driven by increasing e-commerce demand, strategic acquisitions, and expansion into new markets. Additionally, investments in digitalization and process optimization have improved operational efficiency, leading to higher volumes and revenue growth.

Package and Courier

Expected Growth: 4.83%

TFI International Inc.'s Package and Courier segment growth of 4.83% is driven by increasing e-commerce demand, expansion of last-mile delivery services, and strategic acquisitions. Additionally, investments in digitalization and process optimization have improved operational efficiency, contributing to revenue growth.

Eliminations

Expected Growth: 4.65%

TFI International Inc.'s 4.65% growth is driven by increasing demand for logistics services, strategic acquisitions, and cost savings initiatives. The company's diversified portfolio, including truckload, less-than-truckload, and logistics services, has enabled it to capitalize on growth opportunities in the transportation industry.

7. Detailed Products

Less-than-Truckload (LTL) Freight

TFI International's LTL freight service provides reliable and efficient transportation of smaller shipments across North America.

Truckload (TL) Freight

TFI International's TL freight service offers dedicated truckload transportation for larger shipments, providing flexibility and customized solutions.

Dedicated Fleet Operations

TFI International's dedicated fleet operations provide customized transportation solutions for businesses with unique logistics requirements.

Intermodal Services

TFI International's intermodal services combine truck, rail, and sea transportation to provide efficient and cost-effective logistics solutions.

Warehousing and Distribution

TFI International's warehousing and distribution services provide secure, efficient, and technology-enabled storage and order fulfillment solutions.

Final Mile Delivery

TFI International's final mile delivery services provide customized, last-mile logistics solutions for businesses with high-volume shipments.

Specialized Logistics Services

TFI International's specialized logistics services provide customized solutions for unique transportation requirements, such as oversized or heavy haul shipments.

8. TFI International Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

TFI International Inc. operates in a highly competitive industry, but the threat of substitutes is mitigated by the company's diversified service offerings and strong brand recognition.

Bargaining Power Of Customers

TFI International Inc. has a large and diversified customer base, which reduces the bargaining power of individual customers. Additionally, the company's strong brand recognition and reputation for quality service reduce the likelihood of customers switching to competitors.

Bargaining Power Of Suppliers

TFI International Inc. relies on a network of independent contractors and third-party carriers to provide transportation services. While the company has some bargaining power due to its size and scale, suppliers still have some negotiating power due to the fragmented nature of the industry.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the transportation industry, including significant capital requirements and regulatory hurdles. Additionally, TFI International Inc.'s strong brand recognition and established network of operations make it difficult for new entrants to gain traction.

Intensity Of Rivalry

The transportation industry is highly competitive, with many established players competing for market share. TFI International Inc. faces intense competition from other large transportation companies, which can lead to pricing pressure and reduced margins.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 47.50%
Debt Cost 4.32%
Equity Weight 52.50%
Equity Cost 11.10%
WACC 7.88%
Leverage 90.47%

11. Quality Control: TFI International Inc. passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Momentum: 6.0

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TFI International

A-Score: 4.5/10

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Quality: 4.6

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Growth: 1.2

Quality: 3.0

Yield: 0.0

Momentum: 0.5

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

134.63$

Current Price

134.63$

Potential

-0.00%

Expected Cash-Flows