Forward Air (FWRD) shares soared 22.8% in the last trading session to close at $16.21. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 3.7% loss over the past four weeks.
The uptick followed a non-binding memorandum of understanding entered into by the company with one of its largest customers regarding the continued provision of services (the MOU covers services that the customer had planned to shift to other providers as part of an effort to diversify its list of vendors). Under the MOU, Forward Air expects to retain at least half of the approximately $250 million in revenue attributable to the customer for 2025, with the potential to retain an additional approximately 25%. Furthermore, the MOU extends the term of the contract for the retained services by no less than two years. The services that are expected to be transitioned to the other providers are likely to start later in 2026, with the majority taking place in December and throughout the balance of 2027.
This contractor for the air cargo industry is expected to post quarterly loss of $0.17 per share in its upcoming report, which represents a year-over-year change of +58.5%. Revenues are expected to be $632 million, up 2.1% from the year-ago quarter.
Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.
For Forward Air, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on FWRD going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Forward Air is a member of the Zacks Transportation - Truck industry. One other stock in the same industry, Saia (SAIA), finished the last trading session 1.2% higher at $433.22. SAIA has returned -1.8% over the past month.
Saia's consensus EPS estimate for the upcoming report has changed +0.1% over the past month to $3.31. Compared to the company's year-ago EPS, this represents a change of +24%. Saia currently boasts a Zacks Rank of #3 (Hold).
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This article originally published on Zacks Investment Research (zacks.com).