ArcBest Corporation (ARCB): A Bull Case Theory

We came across a bullish thesis on ArcBest Corporation on Valueinvestorsclub.com by leob710. In this article, we will summarize the bulls’ thesis on ARCB. ArcBest Corporation's share was trading at $87.51 as of January 13th. ARCB’s trailing and forward P/E were 20.79 and 17.76 respectively according to Yahoo Finance.

ArcBest (ARCB) is a century-old, multi-segment logistics operator anchored by a unionized less-than-truckload (LTL) network and an asset-light brokerage and managed transportation business. The company operates 239 service centers across North America, with roughly 56% of its ~15,000 employees represented by the Teamsters, making it the last publicly traded predominantly unionized LTL carrier.

ArcBest’s 2024 revenue of $4.53 billion is split between its asset-based LTL segment ($3.33 billion, 74% of total, 10.2% EBITDA margin) and its asset-light logistics segment ($1.20 billion, 3–4% EBITDA margin), enabling ~20,000 daily shipments with an average haul of ~1,100 miles. Its 2024 collective bargaining agreement locks in predictable 4.2% annual labor cost escalations through mid-2028.

The North American LTL market, valued at $85 billion, is highly consolidated, with the top 10 carriers controlling 75% of revenue. Yellow’s 2023 liquidation removed ~9–10% of national capacity, redistributing assets to rational operators and improving rate discipline, which directly benefits ArcBest.

Despite a deep freight recession from 2023–25, industry pricing has remained rational, and a modest manufacturing rebound could normalize volumes quickly. ArcBest’s unionized, higher-cost structure creates significant operating leverage: shipment weights collapsed in 2024–25, amplifying EBITDA declines, but any recovery in tonnage or oversized freight mix could dramatically lift earnings.

Trading near its liquidation value of $50–$84 per share, based on terminal, fleet, and brokerage assets, ArcBest offers asymmetric upside. A mid-cycle recovery could drive 2028 EPS to $10–12, while normalization in shipment weights could push EPS to $18–20, implying a 2–3x potential upside. Catalysts include industrial recovery, tonnage normalization, terminal monetization, and potential M&A. With limited leverage, a unique niche in LTL, and a hard-asset floor, ArcBest presents a compelling risk/reward opportunity for investors at the bottom of the cycle.

Previously we covered a bullish thesis on Old Dominion Freight Line, Inc. (ODFL) by Richard Toad in October 2024, which highlighted the company’s scale advantages, union-free cost structure, high ROIC, and disciplined network reinvestment. The company's stock price has depreciated approximately by 12.49% since our coverage. The thesis still stands as ODFL’s operational moat remains strong. leob710 shares a similar perspective but emphasizes ArcBest’s unionized structure, higher leverage, and upside from freight recovery and asset monetization.

ArcBest Corporation is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 23 hedge fund portfolios held ARCB at the end of the third quarter which was 22 in the previous quarter. While we acknowledge the potential of ARCB 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.

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Disclosure: None.