Will Arcbest Corp (NASDAQ:ARCB) be in financial trouble before September?

Arcbest Corp is scheduled to announce its earnings today. The next earnings report is expected on the 2nd of November 2021. Arcbest Corp Net Income Per Employee is projected to increase significantly based on the last few years of reporting. The past year's Net Income Per Employee was at 5,454. The current year Earnings before Tax is expected to grow to about 99.8 M, whereas Revenue Per Employee is forecasted to decline to about 206.4 K. While some of us are becoming more enthusiastic about industrials space, let's go over Arcbest Corp in greater detail to make a better estimate of its debt utilization. What exactly are Arcbest Corp shareholders getting in September?
Published over a year ago
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Reviewed by Michael Smolkin

The company currently holds 384.14 M in liabilities with Debt to Equity (D/E) ratio of 0.45, which is about average as compared to similar companies. Arcbest Corp has a current ratio of 1.5, which is within standard range for the sector.
The firm shows a Beta (market volatility) of 0.6507, which signifies possible diversification benefits within a given portfolio. Let's try to break down what Arcbest's beta means in this case. As returns on the market increase, Arcbest Corp returns are expected to increase less than the market. However, during the bear market, the loss on holding Arcbest Corp will be expected to be smaller as well. Even though it is essential to pay attention to Arcbest Corp historical returns, it is always good to be careful when utilizing equity current trending patterns. Our philosophy in foreseeing any stock's future performance is to check both, its past performance charts as well as the business as a whole, including all available technical indicators. Arcbest Corp exposes twenty-one different technical indicators, which can help you to evaluate its performance. Arcbest Corp has an expected return of -0.41%. Please be advised to confirm Arcbest Corp mean deviation, standard deviation, treynor ratio, as well as the relationship between the downside deviation and information ratio to decide if Arcbest Corp performance from the past will be repeated at some point in the near future.
ArcBest Corp financial leverage ratio helps determine the effect of debt on the overall profitability of the company. It measures the total debt position of ArcBest Corp, including all of ArcBest Corp's outstanding debt obligations, and compares it with the equity. In simple terms, the high financial leverage means the cost of production, together with running the business day-to-day, is high, whereas, lower financial leverage implies lower fixed cost investment in the business and generally considered by investors to be a good sign. So if creditors own a majority of ArcBest Corp assets, the company is considered highly leveraged. Understanding the composition and structure of overall ArcBest Corp debt and outstanding corporate bonds gives a good idea of how risky the capital structure of a business is and if it is worth investing in it. Please read more on our technical analysis page.

Understanding ArcBest Total Debt

ArcBest Corp liabilities are broken down into two parts on the balance sheet. These are short-term (or current) obligations and long-term debt. ArcBest Corp has to fulfill its short-term liabilities in this reporting year and should be no more than 12 months old. Long-term debt, on the other hand, is anything beyond the 12-month payment timeframe. Common short-term liabilities found on ArcBest Corp balance sheet include debt obligations and money owed to different ArcBest Corp vendors, workers, and loan providers. Below is the chart of ArcBest main long-term debt accounts currently reported on its balance sheet.
You can use ArcBest Corp financial leverage analysis tool to get a better grip on understanding its financial position

How important is ArcBest Corp's Liquidity

ArcBest Corp financial leverage refers to using borrowed capital as a funding source to finance ArcBest Corp ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. ArcBest Corp financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to ArcBest Corp's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of ArcBest Corp's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the breakdown between ArcBest Corp's total debt and its cash.

Is ArcBest Corp valued fairly by the market?

The entity reported the previous year's revenue of 3.07 B. Net Income was 92.56 M with profit before overhead, payroll, taxes, and interest of 197.73 M.

Liabilities Breakdown

Tax Liabilities
477.8 M
Current Liabilities
401.5 M
Long-Term Liabilities
Total Liabilities879.29 Million
Current Liabilities477.82 Million
Long-Term Liabilities401.47 Million
Tax Liabilities69.6 Million

Arcbest Corp has a good chance to finish above $60 in 2 months

Current Information Ratio is up to -0.09. Price may slip again.
As of the 2nd of August, Arcbest Corp shows the risk adjusted performance of (0.047247), and Mean Deviation of 2.57. Arcbest Corp technical analysis gives you the methodology to make use of historical prices and volume patterns to determine a pattern that approximates the direction of the firm's future prices. Put another way, you can use this information to find out if the firm will indeed mirror its model of historical prices and volume momentum, or the prices will eventually revert. We were able to break down nineteen technical drivers for Arcbest Corp, which can be compared to its rivals. Please confirm Arcbest Corp mean deviation, standard deviation, treynor ratio, as well as the relationship between the downside deviation and information ratio to decide if Arcbest Corp is priced correctly, providing market reflects its regular price of 59.11 per share. Given that Arcbest Corp has jensen alpha of (0.28), we suggest you to validate Arcbest Corp's prevailing market performance to make sure the company can sustain itself at a future point.

Whereas some firms in the trucking industry are either recovering or due for a correction, Arcbest Corp may not be performing as strong as the other in terms of long-term growth potentials. To conclude, as of the 2nd of August 2021, we see that Arcbest Corp follows the market closely. The company is undervalued with low probability of bankruptcy within the next 24 months. Our actual 90 days buy-sell recommendation on the company is Hold.

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Editorial Staff

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