ARCBEST CORPORATION (ARCB): what the price requires
At today's price, ARCBEST CORPORATION (ARCB) is priced for today's economics sustained for ~12.8 years. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.
Generated: 2026-07-19 · Source: https://boothcheck.com/report/ARCB
Headline
| Field | Value |
|---|---|
| Ticker | ARCB |
| Company | ARCBEST CORPORATION |
| Current price | $150.95/sh |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin needed | 5.3% |
| Operating margin today | 2.5% |
| Margin expansion implied | +2.8pp |
| Must persist for | 12.8y |
| Multiple paid | 37x operating income |
The operating-margin requirement is derived from the framework's value band at year 12, a separately labeled basis from the headline growth/duration solve.
Solve inputs: computed at a 11.9% cost of capital; growth searched up to the 25% self-funding ceiling; each 1pp moves the implied horizon ~2.2 years.
Reconcile: at the x-ray's 9.3% required return this reads ~7.5 years; the models below use their own rates.
How unusual the bet is: elevated
| Reference | Value |
|---|---|
| vs own history | +0.24σ |
| sustained it ~10 years at this level | 14% |
| implied end-window share | 0% |
Valuation X-Ray
The price is justified by relative-multiple; asset-based/earnings-power/growth-DCF land below the price.
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 7.05x | 4 | expensive |
| Earnings | 2.89x | 4 | expensive |
| Relative | 1.12x | 3 | expensive |
| Growth | 1.72x | 3 | expensive |
Families that justify the price: Relative Families that call it expensive: Asset, Earnings, Growth
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 8.6%); the inversion above states its own rate.
Per-Model Detail (n=14)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $57.09 | 2.64x | yes | FCF base $0.1B, growth -2% (input: historical growth), terminal g 0.5%, WACC 8.6%, 5yr projection |
| DCF Exit Multiple | Growth | $124.43 | 1.21x | yes | Exit EV/EBITDA: 12.4x / 14.4x / 16.4x (bear / base = today's held flat / bull), 5yr |
| Relative Valuation | Relative | $106.46 | 1.42x | yes | P/E 32.09x (blended: static sector reference 20x + trailing (TTM) 60x), scenarios: 27.1x / 32.1x / 37.1x (bear / base = reference held flat / bull), EV/EBITDA 13x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $27.07 | 5.58x | yes | BV/sh $57.59, ROE (TTM) 4.3%, ke 9.3% |
| Two-Stage Excess Return | Asset | $17.69 | 8.53x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $87.78 | 1.72x | yes | Rev $4.0B, growth -2% (input: historical growth; tapered), Terminal P/S: 0.7x / 0.8x / 1.0x (bear / base = today's held flat / bull, cap 8x) |
| Growth-Adjusted P/E | Relative | — | — | no | — |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $76.57 | 1.97x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $0.24B × (1−21%) / WACC 8.6% → EPV (no growth) |
| Residual Income | Asset | $15.21 | 9.92x | yes | BV $57.59 + 5yr PV of (ROE (TTM) 4.3% − Kₑ 9.3%) × BV; BV grows 2.8%/yr |
| Graham Number | Asset | $56.23 | 2.68x | yes | √(22.5 × EPS $2.44 × BVPS $57.59) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $134.62 | 1.12x | yes | EBITDA $0.26B × sector EV/EBITDA 13.0x |
| FCF Yield | Earnings | $54.77 | 2.76x | yes | FCF $149.8M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $49.78 | 3.03x | yes | SBC-adj FCF $0.14B (FCF $0.15B − SBC $0.01B) capitalized at Kₑ |
| Ben Graham Formula | Earnings | $2.04 | 74.00x | yes | EPS $2.44 × (8.5 + 2×-5.0%) × (4.4 / 5.3%) (excluded from median) |
| ROIC-Justified P/B | Asset | $1.08 | 139.77x | yes | BV $57.59 × (ROIC 0.2% / WACC 8.6%) (excluded from median) |
| P/Sales Sector | Relative | $361.88 | 0.42x | yes | Revenue $4.04B × sector P/S 2.0x |
| PEG Fair Value | Relative | — | — | no | — |
| Earnings Yield | Earnings | $26.38 | 5.72x | yes | EPS $2.44 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net debt | $137.2m |
| Net debt / NOPAT (after-tax) | 1.70x |
| Net debt / operating income (pre-tax) | 1.35x |
| Share count CAGR (buyback) | -3.6% |
| Burning cash | no |
Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.
Bullet Takeaways
- ArcBest is a freight carrier built around a less-than-truckload network, the asset-based business that moves smaller shipments from many customers on shared trucks, paired with an asset-light logistics arm.
- Capital discipline is the standout: ArcBest has cut its share count about 3.6% a year and carries low debt, buying back stock through a freight downturn that has pushed margins to cyclical lows.
- The defining risk is the cycle and the operating ratio; first-quarter 2026 asset-based operating ratio rose to 97.3% as wages and depreciation outpaced revenue, and the price assumes a margin recovery that depends on freight demand turning.
Bull Case
The capital allocation tells you what management thinks of its own stock at the bottom of a cycle: it keeps buying. ArcBest has reduced its share count by about 3.6% a year, repurchasing shares through a freight recession that has compressed margins across the industry, and it does so from a position of balance-sheet strength, with net debt of only about $137 million against trailing operating income near $87 million. Buying back stock when earnings are depressed is the disciplined move, because it retires the most shares per dollar precisely when the price reflects trough conditions. The flat-to-falling share count is the clearest evidence management believes the current margin is a cyclical low, not a new normal.
The LTL network is the durable asset, and the recent quarter showed it taking share even in a weak market. Asset-based revenue grew despite the downturn, and tonnage per day rose 6.5% year over year on a 2% increase in shipments and 5% heavier weight per shipment. The 10-K explains the demand driver plainly: tonnage is "directly affected by industrial production and manufacturing; distribution; residential and commercial construction; consumer spending, primarily in the North American economy." That ties ArcBest to the industrial cycle, and the cycle has been soft, yet the company grew volume by onboarding new core LTL customers. Winning volume in a down market is the sign of a network gaining density, which is the source of LTL profitability.
The pricing and the turn are where the bull case gets concrete. Contract renewals and deferred pricing agreements averaged a 6.3% increase in the first quarter, and management described LTL industry pricing as rational. ArcBest guided second-quarter asset-based operating ratio to improve 400 to 500 basis points sequentially, ahead of its 10-year historical average seasonal improvement of 350 basis points. The asset-light segment also returned to a small operating profit from a loss. Against a trucking cohort that includes Old Dominion's peers J.B. Hunt, Knight-Swift, and Saia's competitors, the bull case is that ArcBest is gaining LTL density, holding price, and positioned for operating leverage when freight demand recovers, all while shrinking the share count at trough prices.
Bear Case
The bear case is moat-erosion under cyclical stress, and the operating ratio is where it shows. Asset-based operating ratio climbed to 97.3% in the first quarter, meaning the segment spent 97.3 cents to earn a dollar of revenue, and operating income fell to $17.5 million as higher contractual wages, benefits, and depreciation outran the revenue line. An LTL carrier's whole value is its ability to run a low operating ratio through density and pricing; when costs rise faster than revenue even as tonnage grows, the network is not converting volume to profit. The 10-K flags the structural pressure directly, citing "ongoing weakness in the manufacturing sector and evolving freight dynamics, including the shift of some heavier LTL shipments" away from its mix. That shift is exactly the kind of erosion the bull case has to overcome.
The valuation is the harder problem because the price assumes a recovery the cycle has not delivered. At about 35 times operating income, the market is paying for growth held at the self-funding ceiling for roughly 13 years, a duration only about 14% of comparable fast-growers have ever sustained. The current operating margin is a thin 2.2%, cyclically depressed, so the multiple is enormous against trailing earnings. The price is, in effect, capitalizing a normalized margin that has not yet returned, and the static methods agree it is stretched: the asset-value, earnings-power, and even forward-growth lenses all flag the price as expensive, with only the relative-multiple lens reaching it. There is no conservative method defending the level.
The dependency, then, is entirely on the freight cycle turning and the operating ratio falling back toward better levels. ArcBest guided to a sequential margin improvement, but freight cycles are notoriously hard to time, and a prolonged industrial slowdown keeps the operating ratio elevated regardless of how well the company executes. The balance sheet is sound, so this is not a solvency bear; it is a multiple bear. A trucking company earning a 2.2% margin and priced at 35 times operating income has priced in the recovery, and if the recovery is slower or shallower than the guidance implies, the multiple compresses toward what the depressed earnings actually support. The bear does not need ArcBest to be poorly run; it needs the freight cycle to disappoint the recovery the price has already booked.
Valuation
The price is a bet on normalization, and the numbers make that explicit. At about 35 times operating income against a thin 2.2% trailing margin, the price is not valuing what ArcBest earns now; it is valuing what it earns when the freight cycle recovers and the operating ratio falls. Inverted, the price embeds growth held at the self-funding ceiling for roughly 13 years, which is the framework's way of saying the multiple assumes a long, sustained run of the better margins that the cycle has not yet provided. The trailing earnings are cyclically depressed, so the headline multiple overstates the demand on the business, but the direction is clear: this is a recovery valuation, not a current-earnings valuation.
The methods split the way they do for a cyclical priced for the upturn. The asset-value, earnings-power, and forward-growth lenses all flag the price as expensive, sitting well above where they land, because they read the trough earnings. Only the relative-multiple lens reaches the price, which makes sense if peers are similarly priced for a freight recovery. When the static methods say expensive and only the peer lens agrees with the price, the price is leaning on the assumption that the whole group re-rates as the cycle turns. That is a defensible bet if the recovery comes, but it is a bet on the cycle, and the valuation has little support beneath it if the recovery stalls.
Solvency is the reassuring part and keeps this a multiple story rather than a survival one. Net debt of about $137 million is a modest 1.6 times trailing operating income, the company is not burning cash, and it has continued to buy back stock, shrinking the share count about 3.6% a year. A strong balance sheet through a downturn is exactly what lets a cyclical wait for the recovery and repurchase shares at trough prices. Against the trucking cohort, ArcBest is gaining LTL volume and holding pricing, but the price has already credited the margin recovery, so the question for the buyer is whether the freight cycle delivers the operating-ratio improvement the guidance points to and the multiple requires.
Catalysts
The first-quarter 2026 results were mixed but pointed to a turn. Revenue rose 3.3% to $998.8 million, and while the company posted a small net loss of $(0.05) per share, adjusted EPS of $0.32 beat consensus by three cents. The asset-based LTL segment grew revenue 1.3% to $655.0 million on tonnage up 6.5%, but operating income fell to $17.5 million as the operating ratio rose to 97.3% on higher wages and depreciation. The asset-light segment improved from a loss to a small operating profit.
The forward signals were the more important part of the print. Contract renewals and deferred pricing averaged a 6.3% increase, management called LTL pricing rational, and it guided second-quarter asset-based operating ratio to improve 400 to 500 basis points sequentially, ahead of the 10-year average seasonal gain of 350 basis points. A larger-than-seasonal margin improvement is the catalyst the bull case is built on, and management cited strong April momentum heading into the quarter.
The forward watch items are the operating ratio and the freight cycle. Whether the guided 400-to-500-basis-point sequential improvement materializes, and whether contract pricing holds at mid-single digits, are the swing factors for the margin recovery the price assumes. Because tonnage tracks industrial production and manufacturing, the broader freight and manufacturing data are the external variables with the most leverage on results, and a sustained turn there is what would validate the recovery valuation, while continued manufacturing weakness is the scenario the elevated multiple is most exposed to.
Peer Cohorts (Per Segment, With Filing Citations)
Core business (reported)
- ODFL (OLD DOMINION FREIGHT LINE, INC.)
- FY2025 10-K: …was deregulated in 1980. The largest 5 and 10 LTL motor carriers accounted for approximately 56% and 81%, respectively, of the domestic LTL market in 2024 according to information reported in Transport Topics . We believe consolidation in our industry will continue due to increased customer demand for transportation…
- FY2025 10-K: …a "just-in-time" basis, which may increase our costs and adversely affect our ability to meet our customers' needs; • consolidation in the ground transportation industry may create other large carriers with greater financial resources to use in operations and other competitive advantages relating to their size; •…
- SAIA (Saia, Inc.)
- FY2025 10-K: …economic recessions or times of reduced growth rates in the economy, which may limit our ability to maintain or increase prices or grow our business; • Many customers reduce the number of carriers they use by selecting approved transportation service providers, periodically accepting bids from multiple carriers for…
- FY2025 10-K: …have a material adverse effect on our financial condition, results of operations, liquidity and cash flows. These conditions include recessionary economic cycles and downturns in customer business cycles, labor and supply shortages, global uncertainty and instability, inflation, changes in U.S. social, political, and…
- JBHT (J.B. HUNT TRANSPORT SERVICES, INC.)
- FY2025 10-K: 7.1 years. We perform routine servicing and preventive maintenance on our equipment at our regional terminal facilities. Competition and the Industry The freight transportation markets in which we operate are frequently referred to as highly fragmented and competitive. Our JBI segment competes with other intermodal…
- FY2025 10-K: …our growth and profitability. In addition, our growth could be limited by an inability to attract third-party carriers upon whom we rely to provide transportation services. We operate in a competitive and highly fragmented industry. Numerous factors could impair our ability to maintain our current profitability and…
- KNX (Knight-Swift Transportation Holdings Inc.)
- FY2025 10-K: …Logistics gross margin (revenue, excluding intersegment transactions, less purchased transportation expense, excluding intersegment transactions) as a percentage of logistics revenue, excluding intersegment transactions Average Containers Intermodal Average containers in operation during the period GAAP Operating…
- FY2025 10-K: …capacity. By late 2022, inflationary pressures across equipment, fuel, labor, maintenance, and insurance began to weigh more heavily on industry cost structures as demand patterns started to shift. 2023 - 2025 Beginning in 2023, the freight market entered a prolonged downcycle characterized by moderated consumer…
- SNDR (Schneider National, Inc.)
- FY2025 10-K: …7 Table of Contents We operate in a highly competitive and fragmented industry that is characterized by intense price competition which could have a materially adverse effect on our results of operations. Our operating segments compete with many other truckload carriers, logistics, brokerage, and transportation…
- FY2025 10-K: …competitive, scalable capacity. In 2025, we implemented stricter qualification requirements for certain third-party carriers in response to cargo theft concerns, which reduced the number of carriers in our network and influenced volume and mix within the period. Logistics also plays a role in innovation, including…
- WERN (WERNER ENTERPRISES, INC.)
- FY2025 10-K: …to reduce our exposure to fuel price fluctuations. We operate in a highly competitive industry, which may limit growth opportunities and reduce profitability. The freight transportation industry is highly competitive and includes thousands of trucking and non-asset-based logistics companies. We compete primarily with…
- FY2025 10-K: …claims; and associate health claims (supplemented by premium-based insurance coverage above certain dollar levels). For that reason, our financial results may also be affected by driver safety, medical costs, weather, legal and regulatory environments and insurance coverage costs to protect against catastrophic…
- LSTR (LANDSTAR SYSTEM, INC.)
- FY2025 10-K: …which the Company operates, could cause reduced demand for the Company's services and a reduction in the volume of shipments transported by the Company's network, and could have a material adverse effect on Landstar's results of operations. Substantial industry competition. As noted above in Item 1, "Business -…
- FY2025 10-K: …400%, in the premiums charged by third party insurance companies to the Company for excess coverage for commercial trucking liabilities in excess of $10 million. Moreover, the Company from year to year manages the level of its financial exposure to commercial trucking claims in excess of $10 million, including…
- ZTO (ZTO Express (Cayman) Inc.)
- FY2025 20-F: …fleets, as well as technology infrastructure and people, particularly talent in overall management, business operation and information technology. We expect our continued investments to further improve our parcel handling capacity, increase market penetration, and enhance customer services and operational efficiency.…
- FY2025 20-F: …those set forth under "Item 3. Key Information-D. Risk Factors" or in other parts of this annual report on Form 20-F. A. Operating Results General Factors Affecting Our Results of Operations Demand from China e-commerce industry for express delivery services We have benefited from the rapid growth of China's…
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.
Sources
ArcBest Q1 2026 results, 2026 · ArcBest FY2025 10-K