HTLD

Heartland Express ($HTLD) Shares Surge as CEO and Major Shareholders Invest Over $5 Million Despite Earnings Slump

05/14/2025 20:58

Shares of trucking company Heartland Express ($HTLD) are surging following aggressive insider buying, particularly after the stock fell to the $7 range in early May, attracting significant purchases from the CEO and major shareholders. Heartland Express stock has been on a downward trajectory throughout early 2025. From mid-February levels of around $11.50, the shares plummeted to $7.60 by April 30, representing a decline of approximately 34% year-to-date. However, following substantial insider purchases beginning in early May, the stock has rebounded to $8.91 as of May 13, marking a 17.5% recovery from its recent lows. Leading this insider buying spree is Heartland Express CEO Michael Gerdin. On May 5, Gerdin purchased 148,272 shares at an average price of $7.85 for a total investment of $1,164,216.92. Just four days later, on May 9, he acquired the same number of shares at $8.50 per share, demonstrating strong conviction in the company's stock even as its price was rising. Alongside Gerdin's purchases, major shareholder 'Trust Anns' participated in the buying activity. This entity acquired a total of 396,693 shares between May 6 and May 8, and added another 167,644 shares on May 12. On the same day, board member Amanda Hupfeld joined the insider buying trend with a purchase of 2,000 shares. Notably, these insider purchases occurred immediately following the company's disappointing earnings release. On April 30, Heartland Express reported its first quarter 2025 results, with revenue declining 18.8% year-over-year to $219.42 million and a loss of $0.18 per share. These figures fell significantly short of market expectations, which had anticipated revenue of $241.37 million with the same $0.18 per share loss. In fact, Heartland Express has experienced several consecutive quarters of weak performance. The company reported revenue declines of 11.9% to $242.58 million in Q4 2024 and another 11.9% drop to $259.86 million in Q3, with both quarters resulting in net losses. For the full year 2024, revenue decreased by 13% to $1.05 billion with a net loss of $29.7 million. These disappointing results reflect broader challenges facing the trucking industry. Reduced freight demand, declining shipping rates, and increased operating costs due to inflation have pressured many transportation companies, including Heartland. Industry analysts project a recovery in freight demand in the latter half of 2025, though the near-term environment remains challenging. Despite these headwinds, the substantial stock purchases by Heartland Express insiders, particularly CEO Gerdin, can be interpreted as a strong signal that the current share price significantly undervalues the company's intrinsic worth. Notably, Gerdin has shown a consistent buying pattern, having purchased 50,000 shares in September 2024 and over 110,000 shares in November 2024. Currently, Heartland Express trades at 0.70 times sales (P/S) and 0.87 times book value (P/B), suggesting relative undervaluation. Analysts maintain an average price target of $12.00, representing approximately 35% upside potential from current levels. Wall Street analysts generally maintain a 'Hold' rating on Heartland Express. While the company is projected to achieve average revenue growth of 5.8% over the next three years, this falls below the transportation industry average of 7.5%. However, the recent insider buying indicates management's confidence in the company's long-term growth prospects and current discounted valuation. Heartland Express, founded in 1978 and headquartered in North Liberty, Iowa, provides dry van truckload services throughout North America under the Heartland Express and Millis Transfer brands, serving retail, manufacturing, and automotive industry customers. Investors will be closely watching for signs of performance improvement and any further insider purchases in the coming months. The recent buying activity is viewed as a positive signal of management's belief in the company's long-term value despite challenging industry conditions.

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