Since January 2026, Hub Group has been in a holding pattern, posting a small return of 0.7% while floating around $47.87. The stock also fell short of the S&P 500’s 6.3% gain during that period.
Is there a buying opportunity in Hub Group, or does it present a risk to your portfolio? See what our analysts have to say in our full research report, it’s free.
Why Do We Think Hub Group Will Underperform?
We’re passing on Hub Group for now. Here are three reasons why there are better opportunities than HUBG, plus one stock we’d rather own.
1. Long-Term Revenue Growth Disappoints
A company’s long-term sales performance is one signal of its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Unfortunately, Hub Group’s 1.6% annualized revenue growth over the last five years was sluggish. This was below our standards.
2. EPS Took a Dip Over the Last Two Years
Although long-term earnings trends give us the big picture, we like to analyze EPS over a shorter period to see if we are missing a change in the business.
Sadly for Hub Group, its EPS declined by more than its revenue over the last two years, dropping 28%. This tells us the company struggled to adjust to shrinking demand.
3. New Investments Fail to Bear Fruit as ROIC Declines
ROIC, or return on invested capital, is a metric showing how much operating profit a company generates relative to the money it has raised (debt and equity).
Over the last few years, Hub Group’s ROIC has unfortunately decreased significantly. We like what management has done in the past, but its declining returns are perhaps a symptom of fewer profitable growth opportunities.
Final Judgment
Hub Group falls short of our quality standards. With its shares trailing the market in recent months, the stock trades at 25.8× forward P/E (or $47.87 per share). This valuation tells us a lot of optimism is priced in - we think there are better stocks to buy right now. We’d recommend looking at one of our all-time favorite software stocks.
Stocks We Like More Than Hub Group
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