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1. Company Snapshot

1.a. Company Description

TFI International Inc.provides transportation and logistics services in the United States, Canada, and Mexico.The company operates through Package and Courier, Less-Than-Truckload (LTL), Truckload (TL), and Logistics segments.


The Package and Courier segment engages in the pickup, transport, and delivery of items.The LTL segment is involved in the pickup, consolidation, transportation, and delivery of smaller loads.The TL segment offers expedited transportation, flatbed, tank container, and dedicated services, as well as TL brokerage services.


This segment carries full loads directly from the customer to the destination using a closed van or specialized equipment.The Logistics segment provides asset-light logistics services, including brokerage, freight forwarding, and transportation management, as well as small package parcel delivery.As of December 31, 2021, the company had 13,384 tractors, 50,091 trailers, and 9,428 independent contractors.


The company was formerly known as TransForce Inc.and changed its name to TFI International Inc.in December 2016.


TFI International Inc.is headquartered in Saint-Laurent, Canada.

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1.b. Last Insights on TFII

TFI International's recent performance was negatively impacted by a 25.16% earnings surprise and 6.89% revenue miss in Q4 2024. The company's operating income declined, and its claims ratio worsened, leading to a reset of margin expectations. Additionally, customer loss became evident, and the company's freight segment, Tforce, faced significant challenges. Furthermore, TD Cowen and RBC lowered their price targets on the stock to $135 and $127, respectively, citing the company's struggles.

1.c. Company Highlights

2. TFI International's Strong Free Cash Flow and Strategic Capital Allocation

TFI International reported a robust financial performance in the fourth quarter of 2025, driven by its international initiatives and the team's hard work. The company's revenue before fuel surcharge was $1.7 billion, a decline from $1.8 billion in the prior year quarter. Operating income was $127 million, reflecting a margin of 7.6%. The company's actual EPS came out at $1.66, significantly higher than estimates at $0.852. Net cash from operating activities improved to $282 million, up 8% year-over-year, and free cash flow from the quarter was $259 million, a 25% increase year-over-year. For the full year 2025, TFI generated $832 million in free cash flow, demonstrating its ability to produce strong free cash flow regardless of the cycle.

Publication Date: Feb -19

📋 Highlights
  • Record Free Cash Flow:: Generated $832M in 2025 free cash flow, with Q4 up 25% YoY to $259M.
  • Revenue Decline Offset by Margin Gains:: Revenue before fuel surcharge fell to $1.7B (vs. $1.8B prior), but operating margin improved to 7.6% with $282M in operating cash flow (+8% YoY).
  • LTL Segment Resilience:: LTL revenue dropped 10% YoY to $661M, yet adjusted operating ratio improved to 89.9% (vs. 90.3% prior).
  • 2026 Guidance and Industrial Focus:: EPS guidance of $0.50–$0.60 for Q1 2026; targeting 50% organic LTL growth and 200–300 bps margin improvement in LTL by 2026.
  • Capital Allocation Strategy:: $200–$300M allocated to tuck-in acquisitions in 2026, alongside share buybacks and dividend increases, with leverage expected to reduce from $2.5M to $2M.

Segment Performance

Breaking down the business segments, LTL revenue declined 10% year-over-year to $661 million, but the company was able to improve its adjusted operating ratio to 89.9% relative to 90.3% in the year-ago period. Truckload revenue was $674 million, a decline from $693 million in the prior year, but the company saw early signs of improvement in the truckload sector. Logistics revenue was $358 million, a decline from $410 million in the prior year, but the company was able to expand its operating margin by 30 basis points over the third quarter.

Outlook and Guidance

Looking ahead to 2026, Alain Bedard outlined the company's expectations, including adjusted diluted EPS in the range of $0.50 to $0.60 for the first quarter. The company expects net CapEx, excluding real estate, to be in the range of $225 million to $250 million for the full year. The company's outlook assumes no significant change in the operating environment. As Alain Bedard stated, "We're ready for the upcycle in the US LTL market, citing the improvements in management tools, team stability, and commercial side improvements."

Valuation and Growth Prospects

Analysts estimate next year's revenue growth at 5.2%. With a P/E Ratio of 28.22, the market is pricing in a certain level of growth. The EV/EBITDA ratio is 11.25, indicating a reasonable valuation. The company's Return on Equity (ROE) is 11.65%, and Return on Invested Capital (ROIC) is 4.98%, indicating a decent return on capital employed. The Net Debt / EBITDA ratio is 3.72, which is relatively high, but the company's strong free cash flow generation should help reduce leverage over time.

Capital Allocation and Acquisitions

On capital allocation, Bedard stated that TFI will likely spend $200-300 million on tuck-in acquisitions in 2026, generate a dividend, and use the remaining cash to pay down debt or buy back shares. The company aims to reduce its leverage from $2.5 million to $2 million over time. David Saperstein noted that the reported leverage ratio includes letters of credit and earn-outs, which may not be considered leverage by some investors.

3. NewsRoom

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TFI International Inc. (TSE:TFII) Shares Could Be 49% Below Their Intrinsic Value Estimate

Jan -11

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Large carrier M&A proves elusive in 2025

Dec -31

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TFI International Declares Quarterly Dividend

Dec -15

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TFI International Inc.'s (TSE:TFII) Stock On An Uptrend: Could Fundamentals Be Driving The Momentum?

Dec -13

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Dixon Mitchell Investment Counsel Adds Another $7 Million of TFI International Stock on the Dip

Dec -10

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Should You Rethink TFI International After Five Years of 95% Growth and Recent Acquisitions?

Nov -29

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A Fresh Look at TFI International (TSX:TFII) Valuation Following Latest Earnings Results

Nov -29

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ZTO vs. TFII: Which Stock Is the Better Value Option?

Nov -24

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.71%)

6. Segments

Less-Than-Truckload

Expected Growth: 4.65%

TFI International Inc.'s Less-Than-Truckload (LTL) segment growth of 4.65% is driven by increasing e-commerce demand, rising industrial production, and a strong US economy. Additionally, the company's strategic acquisitions, investments in digitalization, and focus on operational efficiency have contributed to the growth. Furthermore, the LTL segment's ability to adapt to changing market conditions and provide flexible shipping solutions has also supported the growth.

Truckload

Expected Growth: 4.83%

TFI International Inc.'s Truckload segment growth of 4.83% is driven by increasing demand for e-commerce and online shopping, resulting in higher freight volumes. Additionally, the company's strategic acquisitions and investments in digital technologies have improved operational efficiency, leading to increased capacity and better asset utilization.

Logistics

Expected Growth: 4.65%

TFI International Inc.'s logistics segment growth of 4.65% is driven by increasing e-commerce demand, strategic acquisitions, and expansion into new markets. Additionally, investments in digitalization and process optimization have improved operational efficiency, leading to higher volumes and revenue growth.

Package and Courier

Expected Growth: 4.83%

TFI International Inc.'s Package and Courier segment growth of 4.83% is driven by increasing e-commerce demand, expansion of last-mile delivery services, and strategic acquisitions. Additionally, investments in digitalization and process optimization have improved operational efficiency, contributing to revenue growth.

Eliminations

Expected Growth: 4.65%

TFI International Inc.'s 4.65% growth is driven by increasing demand for logistics services, strategic acquisitions, and cost savings initiatives. The company's diversified portfolio, including truckload, less-than-truckload, and logistics services, has enabled it to capitalize on growth opportunities in the transportation industry.

7. Detailed Products

Less-than-Truckload (LTL) Freight

TFI International's LTL freight service provides reliable and efficient transportation of smaller shipments across North America.

Truckload (TL) Freight

TFI International's TL freight service offers dedicated truckload transportation for larger shipments, providing flexibility and customized solutions.

Dedicated Fleet Operations

TFI International's dedicated fleet operations provide customized transportation solutions for businesses with unique logistics requirements.

Intermodal Services

TFI International's intermodal services combine truck, rail, and sea transportation to provide efficient and cost-effective logistics solutions.

Warehousing and Distribution

TFI International's warehousing and distribution services provide secure, efficient, and technology-enabled storage and order fulfillment solutions.

Final Mile Delivery

TFI International's final mile delivery services provide customized, last-mile logistics solutions for businesses with high-volume shipments.

Specialized Logistics Services

TFI International's specialized logistics services provide customized solutions for unique transportation requirements, such as oversized or heavy haul shipments.

8. TFI International Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

TFI International Inc. operates in a highly competitive industry, but the threat of substitutes is mitigated by the company's diversified service offerings and strong brand recognition.

Bargaining Power Of Customers

TFI International Inc. has a large and diversified customer base, which reduces the bargaining power of individual customers. Additionally, the company's strong brand recognition and reputation for quality service reduce the likelihood of customers switching to competitors.

Bargaining Power Of Suppliers

TFI International Inc. relies on a network of independent contractors and third-party carriers to provide transportation services. While the company has some bargaining power due to its size and scale, suppliers still have some negotiating power due to the fragmented nature of the industry.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the transportation industry, including significant capital requirements and regulatory hurdles. Additionally, TFI International Inc.'s strong brand recognition and established network of operations make it difficult for new entrants to gain traction.

Intensity Of Rivalry

The transportation industry is highly competitive, with many established players competing for market share. TFI International Inc. faces intense competition from other large transportation companies, which can lead to pricing pressure and reduced margins.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 47.50%
Debt Cost 4.32%
Equity Weight 52.50%
Equity Cost 11.10%
WACC 7.88%
Leverage 90.47%

11. Quality Control: TFI International Inc. passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Growth: 9.2

Quality: 6.1

Yield: 10.0

Momentum: 4.5

Volatility: 6.3

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TFI International

A-Score: 4.5/10

Value: 5.3

Growth: 6.8

Quality: 4.6

Yield: 3.0

Momentum: 1.5

Volatility: 5.7

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Growth: 7.4

Quality: 6.0

Yield: 0.0

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A-Score: 2.4/10

Value: 5.8

Growth: 1.2

Quality: 4.4

Yield: 0.0

Momentum: 0.5

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

150.63$

Current Price

150.63$

Potential

-0.00%

Expected Cash-Flows