Chicago, IL – May 13, 2025 – Today, Zacks Equity Research discusses Marten Transport MRTN and PAMT CORP PAMT.
Industry: Trucking
Link: https://www.zacks.com/commentary/2466693/2-truck-stocks-that-continue-to-be-in-focus-despite-industry-challenges
The Zacks Transportation-Truck industry faces headwinds from tariff-induced economic uncertainties, weak freight rates, driver shortages and inflation-induced woes.
The industry demonstrates resilience despite macroeconomic challenges causing uncertainty in demand, especially for companies prioritizing growth and operational efficiency. Among the companies in the industry that are likely to survive the challenges are Marten Transport and PAMT CORP.
The Zacks Transportation - Truck industry houses truck operators transporting freight to diverse customers, mainly across North America. These companies provide full-truckload or less-than-truckload (LTL) services over the short, medium or long haul. The range of trucking services these companies provide includes dry-van, dedicated, refrigerated, flatbed and expedited.
Some companies have an extensive fleet of company-owned tractors and trucks and independent contractor trucks. Besides trucking, most entities offer logistics and intermodal services as well as value-added services like container drayage, truckload brokerage, supply-chain consulting and warehousing. A few also offer asset-light services to other third-party logistics companies in the transportation sector.
Supply-Chain Disruptions & Weak Freight Rates: Lingering supply-chain disruptions continue to dent stocks in the industry. Below-par freight rates are also hurting the industry’s prospects. Highlighting the weak freight demand, the Cass Freight Shipments Index declined5.3% year over year in March. This measure has deteriorated year over year in each of the past eight months, which confirms the overall declining trend.
Focus on Cost Cuts to Drive the Bottom Line: Despite signs of cooling inflation, we are by no means out of the woods. The hotter-than-expected inflation readings in the past few months substantiate our view. We note that the industry has been experiencing significant levels of inflation, including higher prices for labor, freight and fuel. The industry players are focusing on cost-cutting measures and making efforts to improve productivity and efficiency, to mitigate high expenses and a weaker-than-expected demand scenario.
Prolonged Truck-Driver Shortage: The persistent driver shortage in the trucking industry is exacerbating supply-chain challenges across the United States. Driver scarcity issues limit trucking capacity, making it difficult for trucking companies to meet increased freight demand. American Trucking Associations’ Association’s chief economist, Bob Costello, expects the trucking industry to be short of more than 160,000 drivers by 2030.
Tariff Turmoil: The current administration is focused on protectionism that restricts international trade to help domestic industries. Tariff tensions are heating up, with new tariffs levied by the U.S. federal government, which has impacted the United States’ biggest trading partners — Canada, Mexico, and China . With retaliatory tariffs against the United States, trade tensions are escalating. This trade war is expected to result in increased volatility and uncertainty going forward. The tariff turmoil is hurting global trade. The slowdown of the same is likely to hurt the industry players.
The Zacks Transportation - Truck industry is a 16-stock group within the broader Zacks sector. The industry currently carries a Zacks Industry Rank #244, which places it in the bottom 1% of 246 Zacks industries.
The group’s Zacks Industry Rank, the average of the Zacks Rank of all member stocks, indicates dismal near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperforms the bottom 50% by a factor of more than 2 to 1.
The industry’s position in the bottom 50% of the Zacks-ranked industries is a result of a negative earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are gradually losing confidence in this group’s earnings growth potential. The industry's earnings estimate for 2025 has decreased 42.7% on a year-over-year basis.
Before we present a few stocks from the industry that you may want to buy or hold on to, let’s take a look at the industry’s recent stock market performance and the valuation picture.
Truck Industry Underperforms S&P 500 and Sector
The Zacks Transportation-Truck industry has lagged the Zacks S&P 500 composite and the Transportation sector over the past year.
The industry has plunged 30.6% over this period against the S&P 500's appreciation of 8.3% and the broader sector’s decline of 17.4%.
Based on the trailing 12-month EV-to-EBITDA (enterprise value to earnings before interest, tax, depreciation and amortization), a commonly used multiple for valuing trucking stocks, the industry is currently trading at 13.64X compared with the S&P 500’s 15.2X. It is above the sector’s EV/EBITDA of 8.82X.
Over the past five years, the industry has traded as high as 19.57X and as low as 7.86X, with the median being 12.59X.
Headquartered in Mondovi, WI, Marten Transport offers a network of refrigerated and dry truck-based transportation capabilities across its five distinct business platforms — Truckload, Dedicated, Intermodal, Brokerage and MRTN de Mexico.
MRTN’s cost-control efforts are impressive. MRTN currently carries a Zacks Rank #3 (Hold). The Zacks Consensus Estimate for second-quarter 2025 earnings has been revised 1 cent upward over the past 30 days.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
PAMT CORP is a holding company that owns subsidiaries engaged in providing truckload dry van carrier services, transporting general commodities throughout the continental United States, as well as in the Canadian provinces of Ontario and Quebec.
PAM has experienced growth not only by significantly expanding its customer base but also through acquisitions. The company currently carries a Zacks Rank #3.
Since 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.
Today you can access their live picks without cost or obligation.
See Stocks Free >>
Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
support@zacks.com
https://www.zacks.com
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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
Marten Transport, Ltd. (MRTN) : Free Stock Analysis Report
PAMT Corp. (PAMT) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research
