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HUNT J B TRANSPORT SERVICES INC 10-K Analysis & Summary – 2/21/2025

⚠️This is not investment advice.

⚠️ This is an experimental project and this report is for informational purposes only and should not be considered investment advice. Conduct your own thorough research and consult with a qualified financial advisor before making any investment decisions. ⚠️

J.B. Hunt Transport Services, I

Filing date:

02/21/2025

TLDR:

J.B. Hunt experienced a decrease in revenue and net earnings in 2024 compared to 2023. Key challenges include decreased volume in several segments and increased insurance costs, but the company maintains a strong financial position.

ELI5:

J.B. Hunt, a big trucking company, made less money in 2024 than in 2023. This was because they had fewer deliveries and higher insurance costs, but they are still in good financial shape.

Accession #:

0001437749-25-004736

Published on

Analyst Summary

  • Operating revenues decreased by 5.8% from $12.83 billion in 2023 to $12.09 billion in 2024.
  • Net earnings decreased by 21.6% from $728.29 million in 2023 to $570.89 million in 2024.
  • Gross Profit Margin decreased from 7.7% in 2023 to 6.9% in 2024.
  • Debt-to-Equity Ratio increased from 0.32 in 2023 to 0.37 in 2024.
  • Current Ratio decreased from 1.35 in 2023 to 1.06 in 2024.
  • Net cash provided by operating activities decreased from $1.74 billion in 2023 to $1.48 billion in 2024.
  • Marketplace for J.B. Hunt 360 revenue decreased from $765.6 million in 2023 to $395.8 million in 2024.

Opportunities and Risks

  • Risk Factors: Economic conditions, fuel costs, insurance and claims expenses, difficulty in attracting and retaining drivers, competition, and reliance on information technology systems.
  • Risk: Potential determination that independent contractors are employees, which could significantly increase costs.

Potential Implications

Company Performance

  • Monitor market conditions, cost management initiatives, and the successful integration of the BNSFL acquisition.
  • Watch for trends in insurance claim severity and the impact of potential regulatory changes regarding independent contractor classification.

Stock Price

  • P/E Ratio: 29.95, above the industry average.
  • P/B Ratio: 4.20, above the industry average.
  • P/S Ratio: 1.39, within the industry average.
  • EV/EBITDA: 10.85, within the industry average.

J.B. Hunt Transport Services, Inc. (JBHT) – 10-K Filing Analysis – Fiscal Year Ended December 31, 2024

Executive Summary

This report analyzes J.B. Hunt Transport Services, Inc.’s 2024 10-K filing. JBHT experienced a decrease in revenue and net earnings compared to 2023. Key challenges include decreased volume in several segments, increased insurance costs, and integration costs related to the BNSFL acquisition. However, the company maintains a strong financial position with adequate liquidity and is actively managing costs. The company’s commitment to technology and multimodal solutions remains a key strength. Overall, a HOLD recommendation is appropriate, pending improved market conditions and successful integration of recent acquisitions.

Company Overview

J.B. Hunt Transport Services, Inc. is one of the largest surface transportation, delivery, and logistics companies in North America. It operates through five segments: Intermodal (JBI), Dedicated Contract Services (DCS), Integrated Capacity Solutions (ICS), Final Mile Services (FMS), and Truckload (JBT). The company provides a wide range of transportation and logistics services to a diverse customer base, including Fortune 500 companies. JBHT leverages technology, including its J.B. Hunt 360° platform, to enhance efficiency and visibility in the supply chain.

Detailed Analysis

Management’s Discussion and Analysis (MD&A)

Management attributes the revenue decrease to lower volume within DCS, ICS and JBT, decreased revenue per load within JBI and JBT, and decreased revenue and stop counts in FMS. They highlight the impact of fuel surcharge revenue decreases. The MD&A emphasizes cost management initiatives and investments in technology. A red flag is the increased insurance premiums expense across multiple segments, indicating potential challenges in risk management or increased claim severity. The narrative is generally consistent with the financial results, acknowledging challenges while highlighting strategic initiatives.

Financial Statement Analysis

Income Statement

Operating revenues decreased by 5.8% from $12.83 billion in 2023 to $12.09 billion in 2024. Net earnings decreased by 21.6% from $728.29 million in 2023 to $570.89 million in 2024. The operating ratio increased from 92.3% in 2023 to 93.1% in 2024, indicating decreased operational efficiency.

Key Ratios:

  • Gross Profit Margin: Calculated from the provided data is approximately 6.9% in 2024 vs 7.7% in 2023 (Operating Income / Total Operating Revenues).

Balance Sheet

Total assets decreased slightly from $8.59 billion in 2023 to $8.31 billion in 2024. Total liabilities decreased from $4.48 billion to $4.30 billion. Shareholders’ equity decreased from $4.10 billion to $4.01 billion, primarily due to treasury stock purchases.

Key Ratios:

  • Debt-to-Equity Ratio: Increased from 0.32 in 2023 to 0.37 in 2024 (Total Liabilities / Total Shareholders’ Equity).
  • Current Ratio: Increased from 1.35 in 2023 to 1.05 in 2024 (Total Current Assets / Total Current Liabilities).

Cash Flow Statement

Net cash provided by operating activities decreased from $1.74 billion in 2023 to $1.48 billion in 2024. Net cash used in investing activities decreased significantly from $1.69 billion to $664 million, primarily due to reduced equipment purchases. Net cash used in financing activities increased from $58 million to $826 million, driven by increased treasury stock purchases and debt retirement.

Key Metrics:

  • Capital Expenditures: Decreased significantly, indicating a potential slowdown in growth investments.
  • Free Cash Flow: Decreased, calculated as Operating Cash Flow less Capital Expenditures.

Segment Analysis

JBI: Revenue decreased due to lower revenue per load, partially offset by increased load volume. Operating income decreased due to higher costs.
DCS: Revenue decreased due to lower productivity. Operating income decreased due to higher insurance premiums and start-up costs.
ICS: Revenue decreased significantly due to lower volumes. Operating loss increased due to decreased revenue and integration costs related to the BNSFL acquisition. Gross profit margin increased.
FMS: Revenue decreased slightly. Operating income increased due to improved revenue quality and cost management.
JBT: Revenue decreased due to lower revenue per load and volume. Operating income increased due to lower personnel and equipment-related costs.

Risk Factors

Key risk factors include economic conditions, fuel costs, insurance and claims expenses, difficulty in attracting and retaining drivers, competition, and reliance on information technology systems. The company also highlights the risk of a determination that independent contractors are employees, which could significantly increase costs.

Uncommon Metrics

The filing includes segment-specific metrics such as revenue per truck per week (DCS), revenue per load (JBI, ICS, JBT), and stops (FMS). The Marketplace for J.B. Hunt 360 revenue is tracked in the ICS segment, providing insight into the platform’s performance. Average effective trailing equipment usage is tracked in JBI and JBT, indicating asset utilization.

Conclusion and Actionable Insights

J.B. Hunt faced headwinds in 2024, resulting in decreased revenue and net earnings. Increased insurance costs and integration expenses negatively impacted profitability. However, the company maintains a strong financial position with adequate liquidity. The company’s commitment to technology and multimodal solutions remains a key strength. The increase in the dividend shows confidence in the company’s future.
Recommendation: HOLD. Monitor market conditions, cost management initiatives, and the successful integration of the BNSFL acquisition. Watch for trends in insurance claim severity and the impact of potential regulatory changes regarding independent contractor classification.

Financial Ratio and Metric Analysis for J.B. Hunt Transport Services, Inc. (JBHT)

Stock Price (2025-02-21): $167.71

Profitability

  • Gross Profit Margin:

    • Calculation: (Total Operating Revenues – Rents and purchased transportation – Salaries, wages and employee benefits – Depreciation and amortization – Fuel and fuel taxes – Operating supplies and expenses – Insurance and claims – General and administrative expenses, net of asset dispositions – Operating taxes and licenses – Communication and utilities) / Total Operating Revenues
    • 2024: ($12,087,204 – $5,378,336 – $3,232,440 – $761,141 – $652,129 – $495,375 – $313,664 – $306,355 – $72,547 – $43,992) / $12,087,204 = 6.9%
    • 2023: ($12,829,665 – $5,872,591 – $3,257,484 – $737,954 – $751,497 – $509,354 – $315,678 – $274,564 – $74,996 – $42,351) / $12,829,665 = 7.7%
    • Trend: (6.9% – 7.7%) / 7.7% = -10.39%
    • Industry: The transportation industry typically has gross profit margins ranging from 5% to 15%. JBHT’s gross profit margin is within this range.
  • Operating Profit Margin:

    • Calculation: Operating Income / Total Operating Revenues
    • 2024: $831,225 / $12,087,204 = 6.9%
    • 2023: $993,196 / $12,829,665 = 7.7%
    • Trend: (6.9% – 7.7%) / 7.7% = -10.39%
    • Industry: A good operating margin for the transportation industry is typically between 5% and 10%. JBHT’s operating margin is within this range.
  • Net Profit Margin:

    • Calculation: Net Earnings / Total Operating Revenues
    • 2024: $570,886 / $12,087,204 = 4.7%
    • 2023: $728,287 / $12,829,665 = 5.7%
    • Trend: (4.7% – 5.7%) / 5.7% = -17.54%
    • Industry: The average net profit margin for the transportation industry is around 3% to 7%. JBHT’s net profit margin is within this range.
  • Return on Assets (ROA):

    • Calculation: Net Earnings / Total Assets
    • 2024: $570,886 / $8,312,270 = 6.9%
    • 2023: $728,287 / $8,588,148 = 8.5%
    • Trend: (6.9% – 8.5%) / 8.5% = -18.82%
    • Industry: An average ROA for the transportation industry is around 5%. JBHT’s ROA is above average.
  • Return on Equity (ROE):

    • Calculation: Net Earnings / Total Shareholders’ Equity
    • 2024: $570,886 / $4,014,505 = 14.2%
    • 2023: $728,287 / $4,103,758 = 17.7%
    • Trend: (14.2% – 17.7%) / 17.7% = -19.77%
    • Industry: An average ROE for the transportation industry is around 10%. JBHT’s ROE is above average.
  • Earnings Per Share (EPS) – Basic and Diluted:

    • Basic EPS:
      • 2024: $5.60
      • 2023: $7.04
    • Diluted EPS:
      • 2024: $5.56
      • 2023: $6.97
    • Trend (Basic): ($5.60 – $7.04) / $7.04 = -20.45%
    • Trend (Diluted): ($5.56 – $6.97) / $6.97 = -20.23%
    • Industry: EPS varies significantly based on company size and profitability.

Liquidity

  • Current Ratio:

    • Calculation: Total Current Assets / Total Current Liabilities
    • 2024: $1,770,983 / $1,678,040 = 1.06
    • 2023: $1,961,192 / $1,452,500 = 1.35
    • Trend: (1.06 – 1.35) / 1.35 = -21.48%
    • Industry: A current ratio between 1.5 and 2.0 is generally considered healthy. JBHT’s current ratio is below the healthy range.
  • Quick Ratio (Acid-Test Ratio):

    • Calculation: (Total Current Assets – Inventories) / Total Current Liabilities
    • 2024: ($1,770,983 – $41,662) / $1,678,040 = 1.03
    • 2023: ($1,961,192 – $42,186) / $1,452,500 = 1.32
    • Trend: (1.03 – 1.32) / 1.32 = -21.97%
    • Industry: A quick ratio of 1 or greater is generally considered ideal. JBHT’s quick ratio is slightly above 1.
  • Cash Ratio:

    • Calculation: (Cash and Cash Equivalents) / Total Current Liabilities
    • 2024: $46,983 / $1,678,040 = 0.028
    • 2023: $53,344 / $1,452,500 = 0.037
    • Trend: (0.028 – 0.037) / 0.037 = -24.32%
    • Industry: The cash ratio is typically low for transportation companies.

Solvency/Leverage

  • Debt-to-Equity Ratio:

    • Calculation: (Long-Term Debt + Current Portion of Long-Term Debt) / Total Shareholders’ Equity
    • 2024: ($977,702 + $500,000) / $4,014,505 = 0.37
    • 2023: ($1,326,107 + $249,961) / $4,103,758 = 0.38
    • Trend: (0.37 – 0.38) / 0.38 = -2.63%
    • Industry: A debt-to-equity ratio of around 1.0 is average. JBHT’s debt-to-equity ratio is below average.
  • Debt-to-Assets Ratio:

    • Calculation: (Long-Term Debt + Current Portion of Long-Term Debt) / Total Assets
    • 2024: ($977,702 + $500,000) / $8,312,270 = 0.18
    • 2023: ($1,326,107 + $249,961) / $8,588,148 = 0.18
    • Trend: (0.18 – 0.18) / 0.18 = 0.00%
    • Industry: A debt-to-assets ratio of around 0.5 is average. JBHT’s debt-to-assets ratio is below average.
  • Interest Coverage Ratio (Times Interest Earned):

    • Calculation: Earnings Before Income Taxes / Interest Expense
    • 2024: $759,516 / $79,020 = 9.61
    • 2023: $934,887 / $65,933 = 14.18
    • Trend: (9.61 – 14.18) / 14.18 = -32.23%
    • Industry: A ratio above 1.5 is generally considered safe. JBHT’s interest coverage ratio is well above the safe range.

Activity/Efficiency

  • Inventory Turnover:

    • Calculation: Cost of Goods Sold / Average Inventory
    • Cost of goods sold is not explicitly listed, so we will calculate it as Total Operating Revenues – Operating Income.
    • 2024: $12,087,204 – $831,225 = $11,255,979
    • 2023: $12,829,665 – $993,196 = $11,836,469
    • 2024: $11,255,979 / (($41,662 + $42,186) / 2) = 269.14
    • 2023: $11,836,469 / (($42,186 + $42,816) / 2) = 278.14
    • Trend: (269.14 – 278.14) / 278.14 = -3.24%
    • Industry: Inventory turnover varies widely depending on the specific segment.
  • Days Sales Outstanding (DSO):

    • Calculation: (Accounts Receivable / Total Operating Revenues) * 365
    • 2024: ($1,224,166 / $12,087,204) * 365 = 36.95 days
    • 2023: ($1,334,912 / $12,829,665) * 365 = 37.93 days
    • Trend: (36.95 – 37.93) / 37.93 = -2.58%
    • Industry: The average DSO for the transportation industry is around 30 to 45 days. JBHT’s DSO is within this range.
  • Days Payable Outstanding (DPO):

    • Calculation: (Accounts Payable / Cost of Goods Sold) * 365
    • 2024: ($645,925 / $11,255,979) * 365 = 20.94 days
    • 2023: ($737,364 / $11,836,469) * 365 = 22.75 days
    • Trend: (20.94 – 22.75) / 22.75 = -7.95%
    • Industry: The average DPO for the transportation industry is around 20 to 30 days. JBHT’s DPO is within this range.
  • Asset Turnover:

    • Calculation: Total Operating Revenues / Total Assets
    • 2024: $12,087,204 / $8,312,270 = 1.45
    • 2023: $12,829,665 / $8,588,148 = 1.49
    • Trend: (1.45 – 1.49) / 1.49 = -2.68%
    • Industry: An asset turnover ratio of 1.0 or higher is generally considered good. JBHT’s asset turnover ratio is above average.

Valuation

  • Price-to-Earnings Ratio (P/E):

    • Calculation: Stock Price / Basic EPS
    • 2024: $167.71 / $5.60 = 29.95
    • 2023: $167.71 / $7.04 = 23.82
    • Industry: The average P/E ratio for the transportation industry is around 15 to 25. JBHT’s P/E ratio is above average.
  • Price-to-Book Ratio (P/B):

    • Calculation: Market Capitalization / Total Shareholders’ Equity
    • Market Cap is not provided, so we will calculate it as Stock Price * Shares Outstanding.
    • Shares outstanding is 100,555,126
    • 2024: ($167.71 * 100,555,126) / $4,014,505,000 = 4.20
    • 2023: ($167.71 * 103,220,027) / $4,103,758,000 = 4.22
    • Industry: The average P/B ratio for the transportation industry is around 2 to 4. JBHT’s P/B ratio is above average.
  • Price-to-Sales Ratio (P/S):

    • Calculation: Market Capitalization / Total Operating Revenues
    • 2024: ($167.71 * 100,555,126) / $12,087,204,000 = 1.39
    • 2023: ($167.71 * 103,220,027) / $12,829,665,000 = 1.36
    • Industry: The average P/S ratio for the transportation industry is around 0.5 to 1.5. JBHT’s P/S ratio is within this range.
  • Enterprise Value to EBITDA (EV/EBITDA):

    • Calculation: (Market Capitalization + Total Debt – Cash) / EBITDA
    • Market Capitalization: $167.71 * 100,555,126 = $16,863,094,263
    • Total Debt: $977,702 + $500,000 = $1,477,702
    • Cash: $46,983
    • EBITDA: Operating Income + Depreciation and Amortization = $831,225 + $761,141 = $1,592,366
    • 2024: ($16,863,094,263 + $1,477,702,000 – $46,983,000) / $1,592,366,000 = 10.85
    • Industry: The average EV/EBITDA ratio for the transportation industry is around 8 to 12. JBHT’s EV/EBITDA ratio is within this range.

Growth Rates

  • Revenue Growth:

    • Calculation: (Current Year Revenue – Previous Year Revenue) / Previous Year Revenue
    • 2024: ($12,087,204 – $12,829,665) / $12,829,665 = -5.79%
  • Net Income Growth:

    • Calculation: (Current Year Net Income – Previous Year Net Income) / Previous Year Net Income
    • 2024: ($570,886 – $728,287) / $728,287 = -21.61%
  • EPS Growth:

    • Calculation: (Current Year EPS – Previous Year EPS) / Previous Year EPS
    • 2024: ($5.60 – $7.04) / $7.04 = -20.45%

Other Relevant Metrics

  • JBI Loads: Increased from 2,044,980 in 2023 to 2,090,732 in 2024, a 2.24% increase.
  • DCS Loads: Decreased from 4,274,677 in 2023 to 3,985,221 in 2024, a -6.77% decrease.
  • ICS Loads: Decreased from 764,839 in 2023 to 609,854 in 2024, a -20.26% decrease.
  • FMS Stops: Decreased from 4,596,715 in 2023 to 4,316,578 in 2024, a -6.10% decrease.
  • JBT Loads: Decreased from 410,091 in 2023 to 389,832 in 2024, a -4.94% decrease.
  • Marketplace for J.B. Hunt 360 revenue: Decreased from $765.6 million in 2023 to $395.8 million in 2024, a -48.30% decrease.

Commentary

J.B. Hunt’s financial performance in 2024 reflects a challenging environment, with declines in revenue, net income, and EPS. Profitability margins have decreased across the board, indicating increased cost pressures or pricing challenges. While the company maintains a solid solvency position, liquidity metrics have weakened. The decrease in revenue and net income growth rates, along with declines in key operational metrics like DCS and ICS loads, raise concerns about future performance.

⚠️ This is an experimental project and this report is for informational purposes only and should not be considered investment advice. Conduct your own thorough research and consult with a qualified financial advisor before making any investment decisions. ⚠️