HUB GROUP, INC. (HUBG): what the price requires
At today's price, HUB GROUP, INC. (HUBG) is priced for +19.4% growth. 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: 2026-07-14 · Exported: 2026-07-16 · Source: https://boothcheck.com/report/HUBG
Headline
| Field | Value |
|---|---|
| Ticker | HUBG |
| Company | HUB GROUP, INC. |
| Current price | $47.56/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 | 2.8% |
| Operating margin today | 3.8% |
| Margin compression implied | -1.0pp |
| Implied growth | 19.4% |
| Multiple paid | 23x 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 9.1% cost of capital with 4% terminal growth over a 5-year stage; each 1pp of cost of capital moves the implied operating-profit growth ~7.3pp.
How unusual the bet is: within-range
| Reference | Value |
|---|---|
| vs own history | +0.20σ |
| cohort percentile (of 225 peers) | 54 |
| sustained it ~5 years at this level | 38% |
| 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 | 3.17x | 5 | expensive |
| Earnings | 2.54x | 5 | expensive |
| Relative | 0.79x | 5 | justifies |
| Growth | 1.91x | 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 7.7%); the inversion above states its own rate.
Per-Model Detail (n=18)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $13.44 | 3.54x | yes | FCF base $0.1B, growth -6% (input: historical growth), terminal g 0.5%, WACC 7.7%, 5yr projection |
| DCF Exit Multiple | Growth | $41.13 | 1.16x | yes | Exit EV/EBITDA: 8.2x / 10.2x / 12.2x (bear / base = today's held flat / bull), 5yr |
| Relative Valuation | Relative | $46.52 | 1.02x | yes | P/E 20.8x (blended: static sector reference 18x + trailing (TTM) 27x), scenarios: 17.6x / 20.8x / 24.0x (bear / base = reference held flat / bull), EV/EBITDA 12x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $18.81 | 2.53x | yes | BV/sh $28.22, ROE (TTM) 6.2%, ke 9.3% |
| Two-Stage Excess Return | Asset | $15.02 | 3.17x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $24.91 | 1.91x | yes | Rev $3.7B, growth -6% (input: historical growth; tapered), Terminal P/S: 0.7x / 0.8x / 0.9x (bear / base = today's held flat / bull, cap 8x) |
| Peter Lynch Fair Value | Relative | $60.55 | 0.79x | yes | EPS $1.73, growth 35% (input: historical EPS growth), PEG=0.78 (Undervalued) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $31.06 | 1.53x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $0.24B × (1−25%) / WACC 7.7% → EPV (no growth) |
| Residual Income | Asset | $14.52 | 3.28x | yes | BV $28.22 + 5yr PV of (ROE (TTM) 6.2% − Kₑ 9.3%) × BV; BV grows 4.0%/yr |
| Graham Number | Asset | $33.14 | 1.44x | yes | √(22.5 × EPS $1.73 × BVPS $28.22) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $57.05 | 0.83x | yes | EBITDA $0.33B × sector EV/EBITDA 12.0x |
| FCF Yield | Earnings | $12.48 | 3.81x | yes | FCF $113.4M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $9.10 | 5.23x | yes | SBC-adj FCF $0.09B (FCF $0.11B − SBC $0.02B) capitalized at Kₑ |
| Ben Graham Formula | Earnings | $55.82 | 0.85x | yes | EPS $1.73 × (8.5 + 2×15.0%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | $4.97 | 9.57x | yes | BV $28.22 × (ROIC 1.4% / WACC 7.7%) |
| P/Sales Sector | Relative | $154.51 | 0.31x | yes | Revenue $3.73B × sector P/S 2.5x |
| PEG Fair Value | Relative | $64.87 | 0.73x | yes | EPS $1.73 × (PEG 1.5 × growth 25.0% (input: historical EPS growth)) → PE 37.5x |
| Earnings Yield | Earnings | $18.70 | 2.54x | yes | EPS $1.73 / 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 | $135.8m |
| Net debt / NOPAT (after-tax) | 1.26x |
| Net debt / operating income (pre-tax) | 0.95x |
| Interest coverage | 11.0x |
| Share count CAGR (buyback) | -2.9% |
| Burning cash | no |
Bullet Takeaways
- Hub Group moves freight by rail and truck, running intermodal, dedicated trucking, and logistics-brokerage businesses, and it is operating through the trough of a multiyear freight downturn, with preliminary 2025 revenue down about 7% to $3.7 billion.
- The most immediate risk is not the cycle but the books: the company is restating its first three 2025 quarters and received a Nasdaq delinquency notice in March 2026 for filing its 2025 results late.
- Watch the 2026 outlook of $3.65 billion to $3.95 billion in revenue and the targeted 100-basis-point margin improvement in Logistics, the markers of whether the freight recovery and the self-help both arrive.
Bull Case
What the valuation methods understate about Hub Group is the cyclicality of the earnings they are reading. Freight is in a prolonged downturn, and the company's trailing operating margin near 4% reflects the trough, not the business's earning power across a cycle. Capitalize trough earnings and the stock looks expensive on the static lenses; that is what happens to every cyclical at the bottom. The bull case starts by refusing to treat a depressed year as the run rate. Intermodal showed slight volume growth and record service levels even through the soft market, a sign the franchise is holding share while it waits for pricing and volume to recover.
The recovery has both a market component and a self-help component, and the second is within management's control. On the market side, the 2026 outlook calls for intermodal volume growth to drive the Intermodal and Transportation Solutions segment and for Logistics to recover through new business wins. On the self-help side, management is targeting a 100-basis-point margin improvement in Logistics through restructuring, and expects lower rail purchase costs to ease the cost base. A cyclical company that can widen margins from cost actions while it waits for volumes does not need a roaring freight market to improve earnings.
The balance sheet gives Hub Group the patience to wait out the cycle. Net debt is modest at under one times operating income, interest coverage runs above eleven times, and the share count has been shrinking about 3% a year, direct evidence the company is buying back stock through the downturn rather than husbanding cash defensively. A low-leverage cyclical with declining share count at the bottom of its cycle is positioned to compound for holders if and when the freight market turns. The bull case is normalized earnings power that today's trough multiple obscures, paired with a balance sheet that can be patient.
Bear Case
The bear case is clearest in how the valuation methods disagree, and the disagreement is one-sided. The asset-value lens, the earnings-power lens, and even the growth-DCF lens all read the price as expensive on what Hub Group earns today; only the peer-multiple comparison justifies it. When the conservative methods, which price the company on its current earnings, all land below the price while only a relative comparison reaches it, the market is paying for a recovery that has not happened. At about 21 times operating income, the price embeds operating growth near 18% a year, a steep bar that assumes both the freight cycle turns and the margin initiatives deliver. If the downturn persists, the price is supporting a far smaller earnings base than it assumes.
The more urgent problem is the accounting, which is a governance red flag a freight cycle has nothing to do with. Hub Group is restating its first three quarters of 2025 and received a delinquency notice from Nasdaq on March 24, 2026, for failing to file its full-year 2025 results on time. Restatements undermine confidence in the very numbers the valuation rests on, and a late filing raises questions about internal controls. For a company asking the market to look through trough earnings to a recovery, the credibility of its reported earnings is exactly what it needs most, and that credibility is currently in question.
The freight market itself offers no near-term cushion. Brokerage is expected to face continued volume pressure, and dedicated trucking performance is expected to be slightly lower due to lost sites. Trucking and intermodal are intensely competitive, with capacity that floods back as soon as rates rise, which caps how far and how fast pricing can recover. The bear case is a triple bind: a cyclical priced for recovery while still in the trough, an accounting overhang that clouds the numbers, and a competitive freight market that limits the upside even when the cycle does turn.
Valuation
The price works out to roughly 21 times company-wide operating income, which inverts to operating growth of about 17.7% a year over a five-year stage. Read that as a direction rather than a precise figure, but the comparison that matters is to the company's depressed starting point: a trailing operating margin near 4%, the trough of a freight downturn. The price is not asking for 18% growth off a normal base; it is asking for a recovery from trough earnings back toward normalized levels, plus the margin gains management has targeted. Whether that is demanding depends entirely on the freight cycle, which is the one variable Hub Group does not control.
The methods agree the price is full on current earnings. The asset-value, earnings-power, and growth-DCF lenses all sit below the price; only the peer-multiple comparison justifies it. That is the pattern of a cyclical at the bottom: the static methods price the trough, and only a comparison to where peers trade, which embeds the same recovery expectation, reaches the price. The interpretation is not that the methods are wrong; it is that the price is a bet on normalization, and the only lens that supports it is the one that already assumes the cycle turns. There is no method grounded in today's earnings that defends the price on its own.
Solvency is the part that lets the bet be patient. Net debt under one times operating income, interest coverage above eleven times, and a falling share count describe a financially sound cyclical that can wait out the downturn without distress. The downside is bounded by that balance sheet and by the demonstrated value of the franchise, not by any near-term liquidity risk. But the valuation does carry an unusual non-cyclical risk in the accounting restatement and the late filing, which cloud the reliability of the numbers the whole valuation depends on. The price rests on a freight recovery the methods do not yet credit, and on the company restoring confidence in its own reporting.
Catalysts
The freight cycle is the dominant catalyst, read through the 2026 outlook. Management guided to revenue of $3.65 billion to $3.95 billion, with intermodal volume growth driving the largest segment and Logistics recovering through new business wins, while brokerage stays under volume pressure. Each quarter's intermodal volumes and pricing are the clearest read on whether the trough is behind the company, and the targeted 100-basis-point Logistics margin improvement plus lower rail purchase costs are the self-help levers to watch for margin recovery independent of the market.
The accounting situation is the other near-term catalyst, and resolving it is a precondition for the rest of the story. The company is working through a restatement of its first three 2025 quarters and a Nasdaq delinquency notice received in March 2026. Filing its delayed results, completing the restatement, and regaining compliance would remove an overhang that currently sits on top of the cyclical thesis. Until the numbers are clean and current, the freight-recovery catalysts are harder for the market to underwrite, so the timing of the filings is itself a signal worth tracking.
Peer Cohorts (Per Segment, With Filing Citations)
Core business (reported)
- EXPD (EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.)
- (no filing in the citation store)
- CHRW (C.H. ROBINSON WORLDWIDE, INC.)
- (no filing in the citation store)
- BCO (BRINK’S CO)
- (no filing in the citation store)
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
company preliminary FY2025 results, 2026 · company disclosures, 2026 · company FY2026 guidance