Here's Why Investors Should Give Old Dominion Stock a Miss Now

Old Dominion Freight Line, Inc. (ODFL is currently mired in multiple headwinds, which, we believe, have made it an unimpressive investment option.

Let’s delve deeper.

Southward Earnings Estimate Revision: The Zacks Consensus Estimate for the fourth quarter of 2025 earnings has moved 10.2% south in the past 90 days. For the current year, the consensus mark for earnings has been revised to 1.2% downward in the same time frame. The unfavorable estimate revisions indicate brokers’ lack of confidence in the stock.

Weak Zacks Rank and Style Score: ODFL currently carries a Zacks Rank #4 (Sell). The company’s current Value Score of F shows its unattractiveness.

Dim Price Performance: The company’s price trend reveals that its shares have lost 8.4% over the past six months against the transportation-truck industry’s 2.6% growth.

ODFL Stock Six-Month Price Comparison

Earnings Expectations: Downbeat earnings expectations cast a shadow over a company’s prospects. For fourth-quarter 2025, ODFL’s earnings are expected to decline 13.82% year over year. For 2025, ODFL’s earnings are expected to decline 12.23% year over year.

Other Headwinds: Macroeconomic concerns are leading to a tough freight environment. ODFL is being hurt by reduced demand for freight services. Due to the weakness in freight demand, shipment volumes and rates are low. The lackluster revenues, along with lingering supply chain issues, are affecting the operating ratio (operating expenses as a percentage of revenues), which deteriorated from 72% in 2023 to 73.4% in 2024 despite ODFL's cost-cutting efforts.

The truck industry, of which Old Dominion is an integral part, has been persistently battling a driver shortage for several years. As old drivers are retiring, trucking companies are finding it difficult to find new drivers to take their place since the low-paying job mostly does not appeal to the younger generation.

Bearish Industry Rank 

The industry to which ODFL belongs currently has a Zacks Industry Rank of 194 (out of 248 groups). Such a weak rank places the industry in the bottom 20% of the Zacks industries. Studies have shown that 50% of a stock price movement is directly tied to the performance of the industry group that it hails from.

In fact, a robust stock in a weak industry is likely to underperform an ordinary stock in a strong group. Therefore, considering the industry’s performance becomes imperative.

Stocks to Consider

Investors interested in the Transportation sector may also consider LATAM Airlines Group LTM and SkyWest, Inc. SKYW. Each stock presently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

LTM has an expected earnings growth rate of 52.63% for the current year. The company has a solid earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in three of the trailing four quarters, and met in the remaining one, delivering an average beat of 29.84%. The Zacks Consensus Estimate for LTM’s 2025 earnings has moved 5.34% north in the past 60 days.

SkyWest has an expected earnings growth rate of 32.95% for the current year. It has an impressive earnings surprise history. The company’s earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, delivering an average beat of 21.24%. The Zacks Consensus Estimate for SkyWest’s 2025 earnings has moved 3.82% north in the past 60 days.

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This article originally published on Zacks Investment Research (zacks.com).

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