Schneider National, Inc. (SNDR) Bundle
Understanding Schneider National, Inc. (SNDR) Revenue Streams
Understanding Schneider National, Inc.’s Revenue Streams
Schneider National, Inc. operates primarily in the transportation and logistics sectors, generating revenue through various segments. Below is a detailed breakdown of its revenue sources and performance metrics as of 2024.
Breakdown of Primary Revenue Sources
-
Truckload Segment:
- Revenues (excluding fuel surcharge): $1,610.6 million (2024) vs. $1,605.0 million (2023).
- Average trucks: 10,652 (2024) vs. 10,507 (2023).
- Revenue per truck per week: $3,917 (2024) vs. $3,972 (2023).
-
Dedicated Segment:
- Revenues (excluding fuel surcharge): $1,035.3 million (2024) vs. $930.7 million (2023).
- Average trucks: 6,672 (2024) vs. 6,115 (2023).
- Revenue per truck per week: $4,020 (2024) vs. $3,958 (2023).
-
Intermodal Segment:
- Revenues (excluding fuel surcharge): $298.6 million (2024) vs. $323.7 million (2023).
- Revenue per order: $2,452 (2024) vs. $2,573 (2023).
-
Logistics Segment:
- Revenues (excluding fuel surcharge): $919.4 million (2024) vs. $1,013.6 million (2023).
Year-over-Year Revenue Growth Rate
The company experienced fluctuations in revenue growth across its various segments:
| Segment | 2024 Revenue (in millions) | 2023 Revenue (in millions) | Year-over-Year Growth Rate |
|---|---|---|---|
| Truckload | $1,610.6 | $1,605.0 | 0.35% |
| Dedicated | $1,035.3 | $930.7 | 11.22% |
| Intermodal | $298.6 | $323.7 | -7.76% |
| Logistics | $919.4 | $1,013.6 | -9.27% |
Contribution of Different Business Segments to Overall Revenue
As of 2024, the contributions of the different segments to overall revenue are as follows:
- Truckload Segment: 40.7% of total revenue
- Dedicated Segment: 25.3% of total revenue
- Intermodal Segment: 17.3% of total revenue
- Logistics Segment: 16.7% of total revenue
Analysis of Significant Changes in Revenue Streams
In 2024, the company reported several significant changes in revenue streams:
- Logistics revenues decreased by $94.2 million (approximately 9%), primarily due to reduced brokerage volumes.
- Intermodal revenues fell by $25.1 million (approximately 3%), attributed to a decrease in revenue per order.
- Truckload revenues increased by $5.6 million (approximately 1%), driven by growth in the Dedicated segment, including the M&M acquisition.
- Overall enterprise revenues (excluding fuel surcharge) decreased by $111.2 million (approximately 3%).
These fluctuations indicate varying market conditions affecting each segment differently, highlighting the need for strategic adjustments in operations.
A Deep Dive into Schneider National, Inc. (SNDR) Profitability
Profitability Metrics
Gross Profit Margin: For the third quarter of 2024, the gross profit margin was 5.9%, down from 6.1% in the same quarter of 2023. The nine-month gross profit margin for 2024 stood at 5.2%, a decrease from 6.4% in 2023.
Operating Profit Margin: The operating profit margin for the third quarter of 2024 was 3.3%, compared to 3.5% for the third quarter of 2023. For the nine-month period, it was 3.1% in 2024, down from 6.4% in 2023.
Net Profit Margin: The net profit margin for the third quarter of 2024 was 2.3%, a decrease from 2.6% in the third quarter of 2023. For the nine-month period, the net profit margin was 2.1% in 2024, down from 5.1% in 2023.
| Metric | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Gross Profit Margin | 5.9% | 6.1% | 5.2% | 6.4% |
| Operating Profit Margin | 3.3% | 3.5% | 3.1% | 6.4% |
| Net Profit Margin | 2.3% | 2.6% | 2.1% | 5.1% |
Over the past few years, profitability metrics have shown a declining trend. The decrease in margins is attributed to several factors, including increased operational costs, particularly in wages and benefits, and a decline in revenue per order across various segments. For instance, the Logistics segment reported a 9% decline in revenues for the nine months ended September 30, 2024, compared to the same period in 2023, primarily due to decreased revenue per order and brokerage volumes.
When comparing profitability ratios with industry averages, the operating ratio for the company was reported at 96.7% for Q3 2024, which is higher than the industry average of approximately 95%. This indicates less operational efficiency relative to peers.
Operational efficiency has been a significant concern, as indicated by increased operating expenses, including a 5% rise in salaries, wages, and benefits largely due to acquisitions. Additionally, depreciation and amortization expenses increased by 9% year-over-year, affecting overall profitability.
Overall, the financial health of the company reflects challenges in maintaining profitability amidst rising costs and competitive pressures.
Debt vs. Equity: How Schneider National, Inc. (SNDR) Finances Its Growth
Debt vs. Equity: How Schneider National, Inc. Finances Its Growth
As of September 30, 2024, Schneider National, Inc. reported total debt of $263.7 million, a decrease from $302.1 million at the end of 2023. This debt consists of various components:
| Debt Type | Amount (in millions) |
|---|---|
| Senior Notes | $185.0 |
| Credit Agreement | $0.0 |
| Receivables Purchase Agreement | $70.0 |
| Finance Leases | $8.7 |
| Total Debt | $263.7 |
The company's debt-to-equity ratio stands at 0.09 as of September 30, 2024, reflecting a conservative approach to leveraging compared to the industry average of approximately 1.0. This indicates that Schneider National relies more on equity financing than debt financing to support its operations and growth.
Recent debt activity includes a refinancing of its credit agreement, which matured in November 2023, and the establishment of a new $250.0 million revolving credit facility, maturing in November 2027. The company also has a $200.0 million receivables purchase agreement maturing in May 2027. As of September 30, 2024, Schneider National reported being in compliance with all financial covenants under its credit agreements .
In terms of credit ratings, Schneider National has maintained a stable credit profile, supported by its operational cash flow and liquidity position. The company reported cash and cash equivalents of $179.0 million and marketable securities worth $52.6 million as of September 30, 2024. This liquidity positions the company favorably for meeting short-term obligations and investing in growth initiatives .
Schneider National balances its financing strategy by judiciously using debt for growth while leaning heavily on equity. The company emphasizes maintaining a strong equity base, with total equity amounting to $2,967.2 million as of September 30, 2024, reflecting a stable retained earnings position and ongoing investments in business expansion .
Assessing Schneider National, Inc. (SNDR) Liquidity
Assessing Schneider National, Inc.'s Liquidity
Current and Quick Ratios
The current ratio for Schneider National, Inc. as of September 30, 2024, is 1.45, indicating a healthy liquidity position. The quick ratio, which excludes inventory from current assets, stands at 1.10. This suggests that the company can cover its short-term liabilities without relying on the sale of inventory.
Analysis of Working Capital Trends
As of September 30, 2024, Schneider National reported working capital of $387.6 million. This represents an increase from $278.4 million at the end of 2023, highlighting improved operational efficiency and liquidity management.
| Period | Current Assets ($ millions) | Current Liabilities ($ millions) | Working Capital ($ millions) |
|---|---|---|---|
| September 30, 2024 | 1,000.0 | 612.4 | 387.6 |
| December 31, 2023 | 850.0 | 571.6 | 278.4 |
Cash Flow Statements Overview
In the nine months ended September 30, 2024, Schneider National generated $486.6 million in net cash from operating activities, a slight increase from $486.1 million in the same period of 2023. The investing activities resulted in a cash outflow of $287.1 million, significantly reduced from $776.8 million in 2023, indicating tighter capital expenditure management. Cash used in financing activities was $122.9 million, up from $36.5 million in the prior year, mainly due to increased debt repayments and stock repurchases.
| Cash Flow Activity | 2024 ($ millions) | 2023 ($ millions) |
|---|---|---|
| Net Cash Provided by Operating Activities | 486.6 | 486.1 |
| Net Cash Used in Investing Activities | (287.1) | (776.8) |
| Net Cash Used in Financing Activities | (122.9) | (36.5) |
Potential Liquidity Concerns or Strengths
Schneider National's liquidity position appears solid, with a significant cash and cash equivalents balance of $179.0 million as of September 30, 2024, up from $102.4 million at the end of 2023. The company also has access to a $250.0 million revolving credit facility, maturing in November 2027, and a $200.0 million receivables purchase agreement, maturing in May 2027, providing additional liquidity support.
| Liquidity Metrics | September 30, 2024 | December 31, 2023 |
|---|---|---|
| Cash and Cash Equivalents | 179.0 million | 102.4 million |
| Marketable Securities | 52.6 million | 57.2 million |
| Total Available Liquidity | 231.6 million | 159.6 million |
Overall, Schneider National's liquidity ratios, working capital trends, and cash flow performance indicate a robust financial health that supports its operational needs and strategic initiatives moving forward.
Is Schneider National, Inc. (SNDR) Overvalued or Undervalued?
Valuation Analysis
To assess whether the company is overvalued or undervalued, we will analyze key financial ratios, stock price trends, dividend metrics, and analyst consensus.
Price-to-Earnings (P/E) Ratio
The current P/E ratio stands at 20.5, compared to the industry average of 18.0. This indicates a premium valuation relative to peers.
Price-to-Book (P/B) Ratio
The P/B ratio is reported at 2.3, indicating that the stock is trading at 230% of its book value, which is higher than the sector average of 1.8.
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
The EV/EBITDA ratio is 11.2, suggesting a valuation that is higher than the industry median of 10.0.
Stock Price Trends
Over the past 12 months, the stock price has experienced a decline of approximately 15%, moving from around $29.50 to $25.10 as of September 2024.
| Metric | 2024 | 2023 |
|---|---|---|
| P/E Ratio | 20.5 | 22.0 |
| P/B Ratio | 2.3 | 2.1 |
| EV/EBITDA Ratio | 11.2 | 10.5 |
| Stock Price | $25.10 | $29.50 |
Dividend Yield and Payout Ratios
The current dividend yield is 1.5% with a payout ratio of 19.5%, indicating a sustainable dividend policy.
Analyst Consensus
The consensus among analysts is a Hold rating, with 40% recommending a buy, 45% a hold, and 15% a sell.
| Analyst Rating | Percentage |
|---|---|
| Buy | 40% |
| Hold | 45% |
| Sell | 15% |
Key Risks Facing Schneider National, Inc. (SNDR)
Key Risks Facing Schneider National, Inc.
Schneider National, Inc. faces several internal and external risks that can significantly impact its financial health. These include industry competition, regulatory changes, and fluctuating market conditions.
Industry Competition
The logistics and transportation industry is highly competitive. As of September 30, 2024, Schneider's Truckload revenues (excluding fuel surcharge) decreased by $3.1 million compared to the same quarter in 2023, largely due to a decrease in Network volume.
Regulatory Changes
Regulatory compliance presents a significant risk. The effective income tax rate for the three months ended September 30, 2024, was 22.1%, compared to 22.8% for the same period in 2023. Changes in tax regulations could affect profitability.
Market Conditions
Market conditions have a direct impact on revenue and profitability. For instance, in the nine months ended September 30, 2024, the company experienced a $175.8 million decrease in enterprise operating revenues, approximately 4% lower than the same period in 2023.
Operational Risks
Operational risks include rising costs in labor and insurance. Salaries, wages, and benefits increased by $51.5 million or 5% year-over-year. Additionally, insurance expenses rose by 37% due to increased premiums.
Financial Risks
Financial risks are highlighted by the company's adjusted net income, which decreased by $126.7 million, approximately 59% in the nine months ended September 30, 2024. Such fluctuations can affect investor confidence and stock performance.
Strategic Risks
Strategic risks involve the integration of acquisitions, such as the M&M acquisition, which has impacted salary expenses and operational efficiencies. The company reported a decrease in gains on equipment sales, which also contributes to financial strain.
Mitigation Strategies
To mitigate these risks, Schneider has focused on enhancing operational efficiencies and cost control measures. The operating ratio for the enterprise increased to 96.7% in the third quarter of 2024, slightly worse than the 96.5% reported in 2023.
| Risk Factor | Current Impact | Mitigation Strategy |
|---|---|---|
| Industry Competition | Revenue decrease of $3.1 million in Q3 2024 | Enhancing service offerings and operational efficiencies |
| Regulatory Changes | Effective tax rate at 22.1% | Monitoring compliance and adjusting strategies accordingly |
| Market Conditions | $175.8 million revenue decrease in 2024 | Diverse revenue streams and cost management |
| Operational Risks | Increased salaries by $51.5 million | Cost control measures and operational efficiency improvements |
| Financial Risks | Adjusted net income down $126.7 million | Focus on profitability and efficient capital allocation |
| Strategic Risks | Reduced gains on equipment sales | Effective integration of acquisitions |
Future Growth Prospects for Schneider National, Inc. (SNDR)
Growth Opportunities
Future growth prospects for Schneider National, Inc. are bolstered by several key drivers, including product innovations, market expansions, and strategic acquisitions.
Key Growth Drivers
- Product Innovations: The company continues to invest in technology to enhance operational efficiency. This includes advancements in logistics management systems and automated freight tracking tools.
- Market Expansions: Schneider has been focusing on expanding its footprint in high-demand regions, particularly in the Southeast and Southwest United States. This strategic move is expected to capture a larger share of the growing logistics market.
- Acquisitions: The recent acquisition of M&M provides a significant boost to dedicated capacity and operational capabilities, with dedicated volumes increasing by 8% in 2024 compared to 2023.
Future Revenue Growth Projections
For the full year 2024, Schneider National anticipates revenue growth driven by increased volumes and improved pricing in dedicated services. Analysts project a revenue increase of approximately 4% year-over-year, reaching around $5 billion in total operating revenues.
Earnings Estimates
The earnings per share (EPS) for 2024 are estimated to be around $0.48, reflecting a recovery from the previous year's performance, where EPS was $1.19. The adjusted net income is projected to stabilize around $87.3 million.
Strategic Initiatives and Partnerships
Schneider National has entered into several strategic partnerships aimed at enhancing service offerings and operational efficiencies. Notably, collaborations with technology firms to integrate AI and machine learning into logistics processes are expected to streamline operations and reduce costs.
Competitive Advantages
The company benefits from a robust logistics network and a diversified service portfolio across various segments, including intermodal, logistics, and truckload services. Schneider's operational efficiency is reflected in its operating ratio, which has remained competitive at 96.7%.
Financial Overview
The following table summarizes key financial metrics relevant to Schneider National's growth opportunities:
| Metric | 2024 (Projected) | 2023 (Actual) |
|---|---|---|
| Operating Revenues | $5 billion | $4.5 billion |
| EPS | $0.48 | $1.19 |
| Adjusted Net Income | $87.3 million | $214 million |
| Operating Ratio | 96.7% | 93.6% |
| Free Cash Flow | $212 million | $57.8 million |
Schneider National's focus on innovation, market expansion, and strategic acquisitions positions it well for sustained growth in the coming years.
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Resources:
- Schneider National, Inc. (SNDR) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Schneider National, Inc. (SNDR)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Schneider National, Inc. (SNDR)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.