[For the original 2019 post, go here.]

In my evaluation of trucking companies valuation multiples, I looked at both publicly traded logistics companies that primarily have trucking as their main revenue source, as well as past transactions for revenue multiples.

Revenue multiples are important as a cursory look at the trucking company’s ability to grow its top line. However, EBITDA multiples are as important, if not more, because profitability is an important factor due to the high cost nature of maintaining trucks and the operating costs.

An illustrative breakdown of major items that hit a trucking company’s P&L are as follows:

P&L Item	Illustrative Numbers	Explanation
Revenue	$1,470,000,000	Total income from freight services, based on distance, weight, and cargo type.
Fuel Costs	($260,000,000)	Variable expense influenced by fuel prices and consumption rates.
Driver Wages & Benefits	($330,000,000)	Compensation, including salaries and benefits, for drivers.
Maintenance & Repairs	($50,000,000)	Costs to maintain and repair the vehicle fleet.
Insurance	($30,000,000)	Premiums for insuring vehicles, cargo, and liability coverage.
Licensing & Permits	($20,000,000)	Fees for legal operation across various regions.
Gross Profit	$780,000,000	Revenue minus direct costs like fuel and driver wages.
Operating Expenses	($500,000,000)	Includes administrative expenses, leases, and other overhead costs.
Operating Income	$280,000,000	Gross profit minus operating expenses, indicating core business profitability.
Net Income	$200,000,000	Final profit after all expenses, taxes, and interest.

Trucking Company Profit Margins

Out of 25 public trucking companies in the dataset, 20 had annual revenues above $1 billion. The 4 with revenues below $500M revenue were not profitable and were removed from the margin assessment.

The average and median gross margin of trucking companies is 22%, the EBITDA margin is 13%, and the net profit margin is 5% from the last twelve month (LTM) data from October 4, 2024.

I didn’t know how low the margins were for the trucking industry. Upon spot checking if my data was incorrect from the SEC filed 10K financial statements, the data is indeed correct.

The most profitable of these public companies is Old Dominion Freight Line, which had 40% gross margin, 33% EBITDA margin, and 21% net profit margin during the same time LTM frame.

Trucking Company Valuation Multiples

From the 25 public companies, removing the outliers, the average and median revenue multiple is ~1.0x. The EBITDA multiples for trucking companies is ~9.4x. And the midpoint of the average and median PE multiple is ~29.0x.

Again, note that the companies in this dataset are mostly large cap companies with revenue above $1 billion.

Trucking Industry Past Transaction Valuation Multiples

I also examined the past transaction data. The transactions are private M&A activity, so data is scarce. Keep this in mind when evaluating the analysis below as the data available online of private companies may not be accurate.

Out of 16 past transactions in the last 3 years, removing outliers, the average/median revenue multiple was 0.9x, which is in line with the public company valuation’s revenue multiples.

EBITDA data was not available for these transactions. Applying the average EBITDA margin of 13% from our public company as proxy, the calculated EBITDA multiple is ~7x.

This is much lower than the 9x EBITDA valuation multiples for public companies.

One inference from this observation that the market has given a premium valuation on EBITDA margins for trucking companies as they expect higher forward profitability.

2025 Trends for Trucking Industry

Some market shifts to look out for in 2025 for trucking companies are:

• Autonomous and electric vehicles – although still a ways to go to replace whole fleets, not to mention, for long distance trucks, the batteries are too heavy and expensive. Look out for continued tech advancements for self driving and EV trucks.
• US economy is projected to grow 2% YoY in 2025 – this may influence freight demand but it’s a modest growth, so freight growth may see stabilization but not significant growth.
• Investments in AI technology to improve operation efficiency.
• It will be interesting to see how the shifts in trade policies by the new administration in the US impact trucking. Perhaps international and domestic logistics will shift and domestic trucking logistics volumes will remain the same but geographic cross-border route activities will change.
• Driver recruitment and retention challenges will persist into 2025 as the industry continues to have labor shortages. Not to mention, a younger workforce good with technology will need to be recruited with advanced technology integration.

Download 2024 Data

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