TFI International Inc. (TFII): A Bull Case Theory

We came across a bullish thesis on TFI International Inc. on Guardian Research’s Substack. In this article, we will summarize the bulls’ thesis on TFII. TFI International Inc.'s share was trading at $108.29 as of January 28th. TFII’s trailing and forward P/E were 27.84 and 20.53 respectively according to Yahoo Finance.

TFI International Inc., together with its subsidiaries, provides transportation and logistics services in the United States, Mexico, and Canada. TFII’s current setup creates an exciting disconnect between market perception and economic reality, offering what looks like a classic compounder temporarily priced like a value trap. After a brutal 40% stock decline, a deep look at fundamentals shows intrinsic value down no more than 10%, creating a powerful asymmetry for long-term investors.

While the market assumes permanent structural decline amid a freight recession, TFI’s cash-generating engine remains exceptional, with projected 2025 free cash flow of $700–$800 million supporting both aggressive buybacks and rising dividends. At the same time, the trucking industry is heading into a major supply-side shock driven by mass bankruptcies among small carriers and restrictive immigration policies that could remove more than 300,000 drivers from the labor pool.

When freight demand rebounds, it will collide with severely constrained capacity, giving large, diversified operators like TFI significant pricing power. Operationally, TFI continues executing its proven playbook under longtime CEO Alain Bédard: disciplined freight selection, decentralized decision-making, tight cost control, and opportunistic M&A. Even through steep volume declines, its LTL network maintained operating ratios, logistics stayed cash-generative, and truckload remains poised for sharp operating leverage once industrial activity turns.

Despite a tough earnings year, free cash flow remains robust thanks to sharp reductions in CapEx and strong working capital management, while leverage of ~2.3x and ample liquidity keep the balance sheet secure. Management is leaning in hard, retiring millions of shares at depressed prices, raising the dividend twice, and signaling confidence through heavy insider buying—including Bédard’s multimillion-dollar purchases. With the stock trading near bear-case valuation despite clear cyclical pressures and identifiable catalysts, TFI is positioned for a major rerating as capacity tightens, freight normalizes, and its operating leverage re-emerges.

Previously we covered a bullish thesis on Old Dominion Freight Line, Inc. by Richard Toad in October 2024, which highlighted the company’s scale advantages, pricing power, and consistently high ROIC driven by its LTL dominance. The company’s stock price has depreciated approximately by 44.79% since our coverage. This is because freight conditions tightened further. The thesis still stands as OD’s moat remains durable. Guardian Research shares a similar view but emphasizes TFI’s cyclical upside.

TFI International Inc. is not on our list of the  30 Most Popular Stocks Among Hedge Funds. As per our database, 28 hedge fund portfolios held TFII at the end of the third quarter which was 28 in the previous quarter. While we acknowledge the potential of TFII as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy NOW 

Disclosure: None.