What Happened?
Shares of freight transportation and logistics provider Saia (NASDAQ:SAIA) fell 3% in the morning session after its peer, Old Dominion Freight Line, reported disappointing second-quarter results that fueled sector-wide concerns. Old Dominion, a major trucking company, posted second-quarter earnings and revenue that both fell short of Wall Street's expectations. This miss signaled ongoing softness in the domestic economy, a sentiment echoed by Old Dominion's management. The news weighed on the broader logistics sector, adding to existing investor jitters. Saia's own recent performance likely made it more susceptible to the negative sentiment, as the company had reported a year-over-year decline in its second-quarter net income and earnings per share just days earlier. This followed a recent downgrade from analysts at Stifel, which had cited concerns over the company's sluggish volumes and margin erosion.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Saia? Access our full analysis report here, it’s free.
What Is The Market Telling Us
Saia’s shares are quite volatile and have had 19 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was about 21 hours ago when the stock dropped 3.1% on the news that bellwether United Parcel Service (UPS) reported weak earnings and withheld its full-year guidance, citing “macro-economic uncertainty” and low consumer sentiment. The logistics giant reported a decline in revenue and missed profit estimates, sending a chill through the entire logistics chain. UPS pointed to a challenging economic environment and near-historic lows in U.S. consumer confidence as key factors for its performance. By withholding its full-year forecast, the company signaled significant uncertainty ahead, confirming fears of a broader economic slowdown that could impact demand for shipping and freight services. This news weighed on other ground and rail transportation stocks, as investors worried that the headwinds affecting UPS could be a sign of wider issues across the industry.
Saia is down 30.4% since the beginning of the year, and at $309.85 per share, it is trading 45.6% below its 52-week high of $569.08 from November 2024. Investors who bought $1,000 worth of Saia’s shares 5 years ago would now be looking at an investment worth $2,568.
Today’s young investors won’t have read the timeless lessons in Gorilla Game: Picking Winners In High Technology because it was written more than 20 years ago when Microsoft and Apple were first establishing their supremacy. But if we apply the same principles, then enterprise software stocks leveraging their own generative AI capabilities may well be the Gorillas of the future. So, in that spirit, we are excited to present our Special Free Report on a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next.