KNX - Heartland Express Continues To Muddle Through As Trucking Rates Approach A Cyclical Top

• Heartland has continued to miss top-line expectations despite strong pricing in the trucking industry, as driver availability continues to limit the company's ability to take advantage of rates.
• Availability should improve as 2022 goes on, but Heartland will likely be facing declining spot rates and meaningfully lower gains on sales; the latter an important driver of operating income.
• Heartland has shown some counter-cyclical behavior in past cycles and still has some longer-term leverage to M&A.
• Heartland shares may hold some appeal for the next six to 12 months, but the longer-term bull case is harder to make in my opinion.

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