Strong Return on Equity
Low Debt Levels
Robust Profit Margins
Strong Operating Profit Margin
Excellent Interest Coverage
Strong Liquidity Ratios
🏆 Strong Customer Relationships
📈 Flexibility and Cost Control
💼 Strategic Investment
🌱 Market Share Opportunity
🔮 Anticipated Economic Improvement
High Price-to-Earnings Ratio
Elevated Price-to-Sales Ratio
High Price-to-Free Cash Flow Ratio
Low Cash Ratio
📉 Revenue Decline
🛑 Increased Operating Costs
⚠️ Uncertain Demand Recovery
Old Dominion Freight Line exhibits strong business quality with a proven track record in customer service and cost control, though it faces challenges with revenue declines and increased operating costs. Looking forward, the company's strategic investments and market share potential provide a cautiously optimistic outlook, albeit with uncertainty regarding demand recovery.
Analysis Date: February 5, 2025
Last Updated: March 12, 2025
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Benjamin Graham's value investing approach focuses on finding stocks with a significant margin of safety between their intrinsic value and market price.
Intrinsic Value
Estimated fair value based on Graham's formula
$212.99
Current Market Price: $150.75
IV/P Ratio: 1.41x (>1.0 indicates undervalued)
Margin of Safety
Gap between intrinsic value and market price
28.999999999999996%
Graham recommended a minimum of 20-30% margin of safety
Higher values indicate a greater potential discount to fair value
Graham Criteria Checklist
Benjamin Graham's value investing checklist for ODFL
Positive earnings (5+ years)
Dividend history (5+ years)
P/E ratio ≤ 20 (27.49)
P/B ratio ≤ 1.5 (7.68)
Current ratio ≥ 2.0 (1.33x)
Long-term debt < Net current assets (0.22x)
Margin of safety (28.999999999999996%)
ODFL does not meet all Graham criteria
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
ODFL reports a gross profit margin of approximately 34.79% and a net profit margin of around 20.40%, indicating strong pricing power and cost control.
An operating profit margin of 26.55% signifies that the company is managing its operating expenses well, contributing positively to the overall profitability.
The price-to-free cash flow (P/FCF) ratio of approximately 41.41 suggests that the stock may be overvalued in relation to its free cash flow generation, which could be a concern for potential investors.
Profitability metrics measure a company's ability to generate earnings relative to its revenue, operating costs, and other relevant metrics. Higher values generally indicate better performance.
Return on Equity (ROE)
Measures how efficiently a company uses its equity to generate profits
28.02%
Higher values indicate better returns for shareholders
TTM (as of 2025-04-16)
Return on Assets (ROA)
Measures how efficiently a company uses its assets to generate profits
4.79%
Higher values indicate better asset utilization
TTM (as of 2025-04-16)
Gross Profit Margin
Percentage of revenue retained after accounting for cost of goods sold
34.79%
Higher values indicate better efficiency in production
TTM (as of 2025-04-16)
Net Profit Margin
Percentage of revenue retained after accounting for all expenses
20.40%
Higher values indicate better overall profitability
TTM (as of 2025-04-16)
With an interest coverage ratio exceeding 7283, ODFL shows exceptional ability to cover its interest obligations, indicating financial stability and security.
The current ratio of 1.33 and quick ratio also at 1.33 suggest that the company has a solid liquidity position, capable of meeting its short-term liabilities.
A cash ratio of 0.20 indicates that while the company is liquid, it holds a relatively low proportion of cash compared to its current liabilities, which could be a concern in times of financial distress.
Financial health metrics assess a company's ability to meet its financial obligations and its overall financial stability.
Debt to Equity Ratio
Total debt divided by total equity
0.01x
Lower values indicate less financial leverage and risk
Less than 1.0 is conservative, 1.0-2.0 is moderate, >2.0 indicates high risk
Q4 2024
Current Ratio
Current assets divided by current liabilities
1.33x
Higher values indicate better short-term liquidity
Less than 1.0 is concerning, 1.0-2.0 is adequate, greater than 2.0 is good
Q4 2024
Old Dominion Freight Line (ODFL) has maintained a consistent market share and strong customer relationships despite a challenging economic environment. The company reported a 99% on-time service rate and a cargo claims ratio below 0.1%, showcasing its commitment to superior customer service.
The company demonstrated a strong ability to control costs, as evidenced by a decline in direct operating expenses as a percentage of revenue over the past two years, even with lower network density and cost inflation.
ODFL has invested significantly in expanding its service center network, with capital expenditures totaling $771 million in 2024 and $757 million in 2023. This positions the company well for future growth when demand improves.
The company experienced a revenue decline of 7.3% in the fourth quarter due to decreased volumes, indicating challenges in the current economic climate.
The operating ratio increased by 410 basis points, primarily due to a decrease in revenue, highlighting the pressure from fixed costs in a softer demand environment.
ODFL is confident in its ability to continue winning market share, having gained more than any other LTL carrier over the past decade. The company's strategic focus and investment in capacity and technology position it well for future growth.
The company remains cautiously optimistic about future demand improvements, with indicators such as ISM moving above 50 and expectations for increased business levels from industrial customers.
While there are signs of potential economic recovery, ODFL acknowledges the unpredictability of the demand environment, making it difficult to forecast improvements in tonnage and revenue.