Saia Inc. Announces Decline In Q4 Income

Saia Inc. reported Q4 GAAP net income of $47.51 million, or $1.77 per share, down from $76.10 million, or $2.84 per share a year ago, while revenue was essentially flat at $789.95 million versus $788.95 million. The substantial year‑over‑year decline in the bottom line despite stable top‑line performance signals margin pressure and weak profitability trends that could weigh on the stock.

Analysis

Trade implications: tactically favor relative-value and hedged short exposure to SAIA. Direct plays: initiate a 1–2% portfolio notional short of SAIA (or buy 3‑month ATM put spread, e.g., 0.8/0.6 delta to cap capital) targeting 25–35% downside in 3–6 months with 15% stop. Pair trade: long ODFL or JBHT (1–1.5% weight) vs short SAIA (equal dollar) to capture scale premium if SAIA continues to underperform. Sector rotation: reduce small-cap LTL exposure by 50% and reallocate to large-cap logistics (ODFL, JBHT) and rail (UNP).

Key Decisions for Investors

• Establish a 1–2% portfolio short position in SAIA (ticker SAIA) with a 3–6 month horizon; place a stop-loss at 15% and a profit target of 30%, or alternatively buy a 3‑month ATM put spread (debit-limited) to express the trade while capping downside.
• Enter a pair trade: long 1% ODFL (Old Dominion, ODFL) or JBHT (J.B. Hunt, JBHT) and short 1% SAIA to capture relative scale advantage; rebalance if spread narrows >10% within 90 days.
• Reduce small-cap/asset-light LTL exposure by ~50% and reallocate to UNP (Union Pacific, 1–2% overweight) and UPS (1% overweight) to play modal shift and pricing power over next 6–12 months.
• Monitor three near-term triggers before increasing size: (1) SAIA Q1 guidance (within 30–45 days) — if margin guide improves >200 bps vs Q4, trim shorts; (2) US diesel (ULSD) moves +/-10% — sustained rise favors further shorting; (3) monthly U.S. Industrial Production/PPI falling >1% month-on-month — consider adding to shorts.