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1. Company Snapshot

1.a. Company Description

Hub Group, Inc., a supply chain solutions provider, offers transportation and logistics management services in North America.The company's transportation services include intermodal, truckload, less-than-truckload, flatbed, temperature-controlled, and dedicated and regional trucking, as well as final mile, railcar, small parcel, and international transportation.Its logistics services comprise full outsource logistics solution, transportation management, freight consolidation, warehousing and fulfillment, final mile delivery, and parcel and international services.


The company also provides dry van, expedited, less-than-truckload, refrigerated, and flatbed truck brokerage services.It offers a fleet of approximately 1,000 tractors and 4,600 trailers to its customers, as well as the driver staffing, management, and infrastructure.The company serves a range of industries, including retail, consumer products, and durable goods.


As of December 31, 2021, it owned approximately 43,750 dry, 53-foot containers, as well as 450 refrigerated, 53-foot containers; and leased approximately 250 dry, 53-foot containers.The company was founded in 1971 and is headquartered in Oak Brook, Illinois.

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1.b. Last Insights on HUBG

Hub Group, Inc.'s recent performance has been influenced by several factors. The company's announcement that its quarterly reports from March 31, 2025, onwards "should no longer be relied upon" due to improper accounting, triggered a severe market reaction. This led to a significant decline in its shares. Furthermore, Robert W. Baird downgraded the stock from an outperform rating to a hold rating, citing a $29.00 price target. Despite this, Capital Fund Management S.A. raised its stake in Hub Group by 87.2% during the quarter. Analysts have given the stock a "Moderate Buy" rating.

1.c. Company Highlights

2. Hub Group's 2025 Earnings: A Closer Look at the Numbers

Hub Group's preliminary financial results for 2025 revealed a mixed bag, with operating cash flow coming in at approximately $194 million. The company's actual EPS for the quarter was $0.4441, slightly beating estimates of $0.44. For the full year 2025, consolidated operating revenue is expected to be $3.7 billion, a 7% decrease over the prior year. The ITS segment operating revenue is expected to be approximately $2.2 billion, and the Logistics segment operating revenue is expected to be around $1.6 billion. As Kevin Beth, Chief Financial Officer and Treasurer, noted, the company's results were impacted by a calculation error in purchase transportation costs and accounts payable, which led to an understatement of $77 million.

Publication Date: Feb -09

📋 Highlights
  • Error Restatement:: $77 million understatement due to purchase transportation cost and accounts payable calculation error to be corrected in 2025 10-K.
  • 2025 Operating Cash Flow:: Preliminary operating cash flow of $194 million for 2025.
  • Segment Revenue Decline:: Full-year 2025 consolidated revenue expected at $3.7 billion (-7% YoY), with ITS at $2.2 billion and Logistics at $1.6 billion.
  • 2026 Guidance:: Revenue projected between $3.65–$3.95 billion, with intermodal volume growth and logistics recovery expected.
  • Dedicated Revenue Impact:: Fourth quarter Dedicated revenue declined due to lost sites, despite 1% intermodal volume growth and stable revenue per load.

Segment Performance

The company's fourth quarter intermodal volume grew 1%, with stable revenue per load. However, Dedicated revenue declined due to lost sites. For 2026, Hub Group expects intermodal volume growth, but dedicated performance will be slightly lower. Logistics revenue is expected to recover through the year due to new business wins and improving profitability. The company's guidance for 2026 revenue is between $3.65 billion to $3.95 billion, representing a potential growth rate of 6.8% at the midpoint.

Valuation and Outlook

With a P/E Ratio of 24.0 and an EV/EBITDA of 8.65, the market appears to be pricing in a moderate level of growth for Hub Group. The company's ROE of 6.3% and ROIC of 4.39% suggest that it is generating returns above its cost of capital, but there is room for improvement. As the company navigates the challenges of the logistics industry, its ability to deliver on its 2026 guidance will be closely watched by investors. With a Dividend Yield of 1.19% and a Free Cash Flow Yield of 4.46%, Hub Group offers a relatively attractive income proposition.

3. NewsRoom

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AIxCrypto Co-CEO Jerry Wang Shares Weekly Investor Update: Hub Season 2 Launch, and Social Growth Momentum

06:29

Source: prnewswire.com

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HUBG ALERT: Ongoing Investigation Into Hub Group, Inc. - Contact Levi & Korsinsky

05:13

Source: newsfilecorp.com

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ROSEN, TOP RANKED INVESTOR COUNSEL, Encourages Hub Group, Inc. Investors to Inquire About Securities Class Action Investigation - HUBG

Feb -21

Source: newsfilecorp.com

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HUBG Investor News: If You Have Suffered Losses in Hub Group, Inc. (NASDAQ: HUBG), You Are Encouraged to Contact The Rosen Law Firm About Your Rights

Feb -20

Source: globenewswire.com

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Hub Group (HUBG) Shares Crater Amid Admitted Improper Accounting - Hagens Berman

Feb -20

Source: prnewswire.com

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$HUBG Stock Loss: Hub Group Inc. Hit with Securities Fraud Investigation after 24% Stock Drop, Investors Notified to Contact BFA Law to Protect Your Rights

Feb -20

Source: newsfilecorp.com

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INVESTOR ALERT: Pomerantz Law Firm Investigates Claims On Behalf of Investors of Hub Group, Inc. - HUBG

Feb -20

Source: prnewswire.com

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ROSEN, SKILLED INVESTOR COUNSEL, Encourages Hub Group, Inc. Investors to Inquire About Securities Class Action Investigation - HUBG

Feb -19

Source: newsfilecorp.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (8.92%)

6. Segments

Intermodal and Transportation Solutions

Expected Growth: 10%

Hub Group's 10% growth in Intermodal and Transportation Solutions is driven by increasing demand for efficient logistics, rising e-commerce sales, and growing need for supply chain visibility. Additionally, investments in digitalization, expansion of services, and strategic partnerships contribute to the segment's growth.

Logistics

Expected Growth: 8%

Hub Group's 8% logistics growth driven by increasing e-commerce demand, strategic acquisitions, and expansion of intermodal services. Additionally, investments in digitalization and process automation have improved operational efficiency, further boosting growth. Strong relationships with major retailers and a diverse customer base have also contributed to the company's growth momentum.

Intersegment Eliminations

Expected Growth: 0%

Hub Group's Intersegment Eliminations with 0% growth is attributed to the absence of significant transactions between its business segments, including Hub Group Trucking, Hub Group Dedicated, and Hub Group Logistics. This lack of intersegment activity is due to the company's focus on providing standalone logistics services, resulting in minimal eliminations.

7. Detailed Products

Intermodal

Hub Group's intermodal service provides door-to-door transportation of goods in containers that can be moved seamlessly between ships, trains, and trucks.

Truck Brokerage

Hub Group's truck brokerage service connects shippers with a network of qualified carriers to move goods by truck.

Dedicated

Hub Group's dedicated service provides customized transportation solutions for shippers who require a dedicated fleet of trucks and drivers.

Warehouse and Distribution

Hub Group's warehouse and distribution services provide storage, inventory management, and order fulfillment solutions for shippers.

Final Mile

Hub Group's final mile service provides delivery of goods from a hub or warehouse to a customer's doorstep.

Supply Chain Solutions

Hub Group's supply chain solutions provide customized logistics and transportation management services for shippers.

8. Hub Group, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Hub Group, Inc. operates in a highly competitive industry, and there are many substitutes available for its services. However, the company's strong brand reputation and extensive network of transportation services help to mitigate the threat of substitutes.

Bargaining Power Of Customers

Hub Group, Inc. has a large and diverse customer base, but some of its major customers have significant bargaining power due to their large volumes and long-term contracts. This gives them the ability to negotiate better prices and terms.

Bargaining Power Of Suppliers

Hub Group, Inc. has a diverse supplier base, and no single supplier has significant bargaining power. The company's large scale of operations and long-term contracts with suppliers also help to reduce the bargaining power of suppliers.

Threat Of New Entrants

The threat of new entrants in the logistics and transportation industry is low due to the high barriers to entry, including significant capital requirements and regulatory hurdles. Hub Group, Inc.'s established brand and extensive network of services also make it difficult for new entrants to compete.

Intensity Of Rivalry

The logistics and transportation industry is highly competitive, with many established players competing for market share. Hub Group, Inc. faces intense competition from other major logistics 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 19.54%
Debt Cost 3.95%
Equity Weight 80.46%
Equity Cost 8.46%
WACC 7.58%
Leverage 24.28%

11. Quality Control: Hub Group, Inc. passed 7 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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Mueller Industries

A-Score: 6.4/10

Value: 4.3

Growth: 7.1

Quality: 7.9

Yield: 2.0

Momentum: 9.0

Volatility: 8.0

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Expeditors International of Washington

A-Score: 5.5/10

Value: 2.9

Growth: 4.9

Quality: 7.1

Yield: 2.0

Momentum: 8.0

Volatility: 8.3

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J.B. Hunt Transport Services

A-Score: 4.2/10

Value: 3.3

Growth: 5.0

Quality: 5.3

Yield: 2.0

Momentum: 4.0

Volatility: 5.7

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Hub Group

A-Score: 4.1/10

Value: 5.1

Growth: 4.0

Quality: 6.1

Yield: 1.0

Momentum: 2.0

Volatility: 6.3

1-Year Total Return ->

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GXO Logistics

A-Score: 3.7/10

Value: 4.0

Growth: 5.9

Quality: 2.5

Yield: 0.0

Momentum: 3.5

Volatility: 6.0

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XPO Logistics

A-Score: 3.3/10

Value: 2.0

Growth: 4.8

Quality: 3.9

Yield: 0.0

Momentum: 4.5

Volatility: 4.3

1-Year Total Return ->

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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

43.27$

Current Price

43.27$

Potential

-0.00%

Expected Cash-Flows