Old Dominion Freight Line, Inc.

Old Dominion Freight Line, Inc. (NASDAQ: ODFL) is a less-than-truckload (LTL) motor carrier based in North America. The company delivers regional, inter-regional, and nationwide LTL services through a single integrated, union-free organisation. Its services include expedited transportation, available through a network of service centres across the continental United States. Container drayage, truckload brokerage, and supply chain consulting are among the value-added services. It has 251 service center sites, 227 of which it owns and 24 of which it rents. Within its local service area, its service centres are responsible for freight pickup and delivery. Customers can access information, including freight tracking, shipping paperwork, rate quotations, rate databases, and account activity through its system.

Key Highlights

• The company reported YoY growth of 32.91% in revenue to USD 1.50 billion in Q1FY22 (ended March 31, 2022) compared to USD 1.13 million in Q1FY21.
• In Q1FY22, ODFL net income increased to USD 299.75 million from USD 199.36 million in Q1FY21.  
• As of March 31, 2022, the company had cash and cash equivalents of USD 541.31 million and total debt of USD 99.95 million.
• ODFL’s net margin for Q1FY22 was 20.0%, significantly higher than the industry median of 10.0%.
• Its ROE was 8.3% in Q1FY22 vs. the industry median of 5.2%.
• Strong balance sheet, the company had a debt-to-equity ratio of 0.03x as of Q1FY22.
• On March 29, 2022, ODFL announced its latest expansion initiatives in Q4FY21 and Q1FY22, with service centre growth in seven cities. Alliance, Texas, Byhalia, Miss., Clear Lake, Iowa, Kernersville, N.C., Marysville, Wash., West Columbia, S.C., and Westfield, Mass. are the LTL carrier's new or expanded facilities. The seven new and relocated service centres will reaffirm Old Dominion's commitment to operational excellence while increasing network capacity. The LTL carrier is focusing on expanding into recent locations and strengthening existing service centres by adding more doors, upgrading technology, and hiring more personnel, allowing the company to serve clients better as demand grows.
• Stock is currently trading below its crucial short-term (50-day) and long-term (200-day) SMA support level, a bearish indicator.
• The stock is leaning towards the lower end of its 52-week range of USD 1.92 to USD 29.70.

Conclusion: Considering the company’s strong fundamentals, recent collaboration with Dhruva Space Private limited, technical indicators, and associated risks. We recommend a "Watch" rating on the stock at the current price of USD 273.375, down 2.48%, as of May 09, 2022, at 12:26 PM PDT.

Technical Price Chart (as on May 09, 2022, at 12:26 PM PDT). Source: REFINITIV, Analysis by Kalkine Group

Technical Analysis Summary:

*Closing price as of May 09, 2022, at 12:26 PM PDT

Investors can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario.

Technical Indicators Defined: -

Support: A level where-in the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.

Resistance: A level where-in the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.

Note 1: The reference data in this report has been partly sourced from REFINITIV.  

Note 2: Investment decision should be made depending on the investors' appetite on upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the valuation has been achieved and subject to the factors discussed above. 

Note 3: The report publishing date is as per the Pacific Time Zone.

Disclaimer

The advice given by Kalkine Canada Advisory Services Inc. and provided on this website is general information only and it does not take into account your investment objectives, financial situation and the particular needs of any particular person. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. The website www.kalkine.ca is published by Kalkine Canada Advisory Services Inc. The link to our Terms & Conditions has been provided please go through them. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations later.