HTLD · Heartland Express
Conviction · Low · more likely to lag the S&P 500 over the next three months
Wrong if: a daily close above $12.27
Note written ·
Price against the kill line
14.7% clear of its kill line on the 13 November 2026 close.
How to read this
This note expects the shares to lag the market, so its kill line sits above the price: a close above the red mark would prove the view wrong. Prices run from low on the left to high on the right. The dot is where the stock closed on 13 November 2026, left of the mark while it is below the line; a dot right of the mark has closed through it.
The scale is stretched near the line, so close calls are easy to see. More than 8% from the line, the stock reads well clear, with a hollow dot to show the figure is off the drawn scale.
The kill line is the research note's own test. The portfolio sells on business facts, not on a price. How the portfolio decides
Three months against the kill line
Daily closes, to . Red: the kill line, a daily close above $12.27, on record since 11 November 2026. The shares are down 18.2% since the close; the S&P 500 is down 2.1% over the same sessions. Figures in the note can cover a different window.
Kill line
A daily close above $12.27, level with the 200-day average of closes, which would show the shares leading the S&P 500. A fourth-quarter 2026 operating ratio below 98.7% with revenue above the third quarter's $179.5 million would also show the shares leading.
Research onlyNot in the portfolio.
Catalyst
Key figures from the filings · Industrials
Quarter to 30 September 2026, filed 6 November 2026; valuation at the 13 November 2026 close
- Revenue, latest quarter ($M)
- 180
- Revenue, change on a year (%)
- −8.7
- Operating margin (%)
- 1.3
- Free cash flow, four quarters ($M)
- −81.1
- Net cash, cash less debt ($M)
- −51.4
- Enterprise value to sales (×)
- 1.2
- Free-cash-flow yield (%)
- −10.1
All filed numbers
What Heartland Express reports to the SEC in its quarterly and annual filings. Each group states its period and filing date once; a figure dated otherwise says so. Built from the filings known on .
| Quarter to | Revenue ($M) | On a year (%) | Operating margin (%) |
|---|---|---|---|
| first filed | 180 | −8.7 | 1.3 |
| first filed | 184 | −12.5 | 9.0 |
| first filed | 176 | −19.7 | −1.9 |
| first filed | 179 | −26.1 | −12.7 |
| first filed | 197 | −24.4 | −3.7 |
| first filed | 210 | −23.4 | −5.9 |
| Pre-tax income ($M) | 1.2 |
| Net income ($M) four quarters: −12.7 | 1.0 |
| Diluted shares, change on a year (%) against the quarter to 30 September 2025 | −0.2 |
| Operating cash flow ($M) | 70.0 |
| Capital spending ($M) | 151 |
| Free cash flow ($M) | −81.1 |
| Cash and short-term investments ($M) | 48.5 |
| Debt ($M) non-current long-term debt plus current maturities | 99.9 |
| Net cash, cash less debt ($M) | −51.4 |
| Deferred revenue ($M) | Not reported |
| Backlog, orders not yet delivered ($M) | Not reported |
| Receivables ($M) | 75.5 |
| Inventory ($M) | Not reported |
| Shareholders' equity ($M) | 754 |
| Market value ($M) | 806 |
| Enterprise value, market value plus net debt ($M) | 857 |
| Enterprise value to sales (×) | 1.2 |
| Enterprise value to operating income (×) | Not meaningful |
| Price to earnings (×) | Not meaningful |
| Price to book value (×) | 1.1 |
| Free-cash-flow yield (%) | −10.1 |
Short interest (FINRA, settled 15 October 2026, published 26 October 2026): 4.4% of shares outstanding sold short, 6.0 days of average trading to cover, −5.6% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $0 | $0 |
| 12 monthsfrom | $31K | $492K |
The thesis
Heartland Express is more likely to lag the S&P 500 over the next three months. Its margin recovery stalled in the third quarter of 2026, and the fourth-quarter 2026 report, expected around February 2027, is the first that can show whether contract repricing lowers the operating ratio. The operating ratio is operating expenses as a share of revenue, so lower is better.
The company reported an operating ratio of 98.7% on 20 October 2026, against 91.0% in the second quarter, because gains on equipment sales fell to $7.8 million from $25.0 million. The third-quarter report missed on revenue and earnings, and Baird, UBS and Barclays each cut a rating or target within eight days of it. Management places the full benefit of contract negotiations in 2027, so no reported quarter has yet shown it.
The shares closed at $10.36 on 12 November 2026, 37.7% below the 52-week high of $16.64 set on 9 June 2026. The three-month change was −18.9% (adjusted daily closes). The company filed its third-quarter Form 10-Q with the SEC on 6 November 2026, and its chief financial officer was scheduled to present at Baird's 2026 Global Industrial Conference on 12 November 2026.
Bullish and bearish views on Heartland Express, Inc.
The bull case on Heartland Express, Inc. (HTLD), in brief: profitability returned from a year earlier. The bear case: the third-quarter report missed.
Bull case
- Profitability returned from a year earlier. Third-quarter 2026 net income was $1.0 million, or $0.01 per share, against an $8.3 million loss a year earlier. The operating ratio improved to 98.7% from 103.7% (third-quarter earnings release, 8-K, 20 October 2026).
- Management expects repricing to build. The release says the benefit of ongoing contract negotiations will not be fully reflected in operating results until 2027. It credits tighter industry capacity and better customer pricing (third-quarter earnings release, 20 October 2026).
- Debt is falling quickly. Debt and finance lease obligations were $99.9 million at 30 September 2026, after a $35 million payment in the quarter, against $494.1 million tied to the 2022 acquisitions. Cash was $48.5 million at the same date (third-quarter earnings release).
- The fleet is new and capital needs are small. Average tractor age is 2.3 years. Remaining 2026 net capital spending is guided to $2 million to $5 million, funded from operating cash flow (third-quarter earnings release, 20 October 2026).
- The shares held above the late-October low. The close was $10.36 on 12 November 2026, above the $10.09 close of 6 November 2026 (quoted daily closes).
Bear case
- The third-quarter report missed. Earnings per share of $0.01 compared with a $0.04 estimate. Sales of $179.504 million compared with a $188.365 million estimate (company news, Benzinga, 20 October 2026).
- Margins moved the wrong way from the second quarter. The operating ratio rose to 98.7% from 91.0%, and disposal gains fell from $25.0 million to $7.8 million. Management guides $9 million to $13 million of disposal gains for the rest of 2026, below the second-quarter level (earnings releases, 20 October 2026).
- Revenue keeps shrinking. Third-quarter operating revenue of $179.5 million compares with $196.5 million a year earlier (earnings release, 20 October 2026). Fuel surcharge revenue of $32.7 million sits inside that total, so diesel prices affect the comparison.
- Brokers cut ratings and targets. Baird downgraded the shares to Neutral from Outperform with a $12 target on 20 October 2026. UBS kept Neutral with a $12 target on 21 October 2026. Barclays kept Underweight and lowered its target to $10 on 28 October 2026.
- The shares trail both moving averages. The last close sits under the 50-day average of $11.17 and the 200-day average of $12.28 (adjusted daily closes, 12 November 2026).
Price setup
The shares closed at $10.36 on 12 November 2026. The 52-week intraday high is $16.64 (9 June 2026), and the 52-week closing low is $7.08 (20 November 2025). The reference close three months earlier was $12.79 on 14 August 2026, which gives the −18.9% change on adjusted closes.
The 50-day average of adjusted closes is $11.17 and the 200-day average is $12.28. The shares have closed under both since the third-quarter report. Barclays' $10 target sits just under the last close, and Baird and UBS each set $12.
Insider activity is limited to a Form 4 filed 2 September 2026 for director James G. Pratt: a grant of 5,000 shares on 31 August 2026, an award rather than an open-market purchase or sale. Founding-family trusts and partnerships hold overlapping stakes of 14.1% to 28.3% each against 77,332,611 shares outstanding (reported 6 August 2026), which leaves a small effective float.
Catalysts ahead
- ~February 2027 (est.): Fourth-quarter 2026 earnings report. First report showing whether the operating ratio improves from 98.7% with disposal gains guided to $9 million to $13 million for the rest of 2026, and whether revenue stops shrinking from $179.5 million.
- 31 December 2026: End of the fourth quarter of 2026. Closes the period in which management's guided disposal gains and early contract repricing first show in results.
What would change the view
A daily close above $12.27, level with the 200-day average of closes, which would show the shares leading the S&P 500. A fourth-quarter 2026 operating ratio below 98.7% with revenue above the third quarter's $179.5 million would also show the shares leading.
What it trades with
Heartland Express trades with US truckload carriers. It responds to spot-rate and contract-rate data, diesel prices and the freight cycle. Concentrated family ownership adds stock-specific moves. Reported profit swings with equipment-sale gains, which were $25.0 million in the second quarter of 2026 and $7.8 million in the third. The $0.02 quarterly dividend, paid 7 October 2026, is small against the share price.
The evidence, claim by claim (8)
- Third-quarter 2026 operating revenue was $179.5 million versus $196.5 million a year earlier; operating ratio 98.7% versus 103.7%; net income $1.0 million ($0.01 per share) versus an $8.3 million loss. Heartland Express third-quarter 2026 earnings release (8-K) · as of
- Gain on disposal of property and equipment was $7.8 million in the third quarter of 2026 versus $25.0 million in the second; management expects $9 million to $13 million for the rest of 2026. Heartland Express third-quarter 2026 earnings release (8-K) · as of
- Third-quarter earnings per share of $0.01 missed a $0.04 estimate; sales of $179.504 million missed a $188.365 million estimate. Company news (Benzinga) · as of
- Baird downgraded Heartland Express to Neutral from Outperform with a $12 target; UBS kept Neutral with a $12 target. Baird and UBS notes, reported 20 October 2026 and 21 October 2026 · as of
- Barclays kept Underweight and lowered its price target to $10. Barclays note, company news · as of
- Debt and finance lease obligations were $99.9 million and cash was $48.5 million at 30 September 2026, after a $35 million payment toward acquisition-related debt in the quarter. Heartland Express third-quarter 2026 earnings release (8-K) · as of
- The company filed its third-quarter 2026 Form 10-Q with the SEC. SEC EDGAR filing index, CIK 799233 · as of
- Director James G. Pratt received a grant of 5,000 shares on 31 August 2026. SEC Form 4 filed 2 September 2026 · as of
Sources
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