Key Stats for Hub Group Stock
- Past-6-Month Performance: 12%
- 52-Week Range: $31 to $53
- Valuation Model Target Price: $49
- Implied Upside: 20%
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What Happened?
Hub Group stock is up about 12% in the last six months, recently trading near $41 per share, as investors moved past the accounting-driven pullback and refocused on improving freight and service trends heading into 2026.
The recovery reflects early signs of stabilizing intermodal demand, better operational consistency, and growing expectations for a firmer bid cycle after two years of softness.
The stock strengthened as analyst updates and institutional activity turned more constructive. Benchmark raised its price target from $40 to $50 and kept a buy rating, while short interest dropped 16.9% in January to 1.72 million shares, easing pressure after recent volatility.
Institutions were active: River Road Asset Management added 487,703 shares to hold 1.10 million shares, Federated Hermes increased its position by 105.7% to 52,756 shares, and HighTower Advisors adjusted its holdings to 829,400 shares, signaling engaged institutional repositioning during the recovery.
This week, the company reported preliminary Q4 results showing Intermodal volume up 1% year over year, stable revenue per load, and strong refrigerated and Mexico growth with refrigerated volume up 150% and Mexico volume up 33%.
CEO Phillip Yeager highlighted operational execution, noting that “our excellent service performance and the consolidation with our rail partners drove enhanced engagement with our customers.”
Hub Group also delivered a 90 basis point improvement in on-time performance and generated $194 million in operating cash flow for 2025.
Investors continued monitoring the accounting issue disclosed last week, when the company acknowledged an error that understated purchased transportation costs in 2025 and stated certain reports “should no longer be relied upon,” prompting investigations and earlier volatility.
Despite the uncertainty, improving freight indicators, analyst revisions, and institutional repositioning helped support the stock’s six-month climb.
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Is Hub Group Undervalued?
Under valuation assumptions, the stock is modeled using:
- Revenue Growth (CAGR): 0.6%
- Operating Margins: 4.7%
- Exit P/E Multiple: 17.7x
Revenue growth expectations remain modest as freight markets recover gradually, but steady intermodal performance, cost efficiency gains, and stronger alignment with rail partners support the potential for earnings improvement off a low base.
Dedicated and Logistics may also contribute more effectively as new business wins scale and onboarding delays ease, while network balance initiatives help reduce backhaul costs.
These operational drivers shape how effectively Hub Group converts stable volume trends into margin expansion throughout the year.
Over the next 12 months, intermodal pricing traction, asset utilization, fuel efficiency improvements, and continued productivity gains will have a meaningful impact on earnings quality.
Based on current assumptions, the valuation model points to a target price of $49, implying 20% total upside, suggesting the stock appears undervalued at its current levels.
At today’s price, Hub Group looks undervalued, supported by early-cycle freight stabilization, disciplined cost management, and the potential for margin recovery as demand gradually improves into 2026.
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