Stock Analysis & Valuation TFI International Inc. (TFII)

• Previous Close: $107.55
• Sector Valuation Confidence Level: Moderate

Valuation method	Value, $	Upside, %
Artificial intelligence (AI)	59.11	-45
Intrinsic value (DCF)	33.17	-69
Graham-Dodd Method	11.26	-90
Graham Formula	96.07	-11

Strategic Investment Analysis

Company Overview

TFI International Inc. (NYSE: TFII) is a leading North American transportation and logistics company headquartered in Saint-Laurent, Canada. Operating across the U.S., Canada, and Mexico, TFI International provides diversified services through four key segments: Package and Courier, Less-Than-Truckload (LTL), Truckload (TL), and Logistics. The company’s extensive fleet includes over 13,000 tractors and 50,000 trailers, supported by nearly 9,500 independent contractors, enabling efficient freight movement and supply chain solutions. TFI International serves a broad range of industries, leveraging its asset-light logistics segment for brokerage, freight forwarding, and transportation management. With a market cap exceeding $7.2 billion, the company is a major player in the trucking sector, benefiting from strong regional demand and operational scalability. Its rebranding from TransForce in 2016 reflects its strategic expansion into integrated logistics, positioning it competitively in the Industrials sector.

Investment Summary

TFI International presents a compelling investment case due to its diversified service offerings, strong cash flow generation ($1.06B operating cash flow in FY 2023), and disciplined capital allocation (dividend yield ~2.5%). However, its high beta (1.415) signals sensitivity to economic cycles, and rising fuel costs or labor shortages could pressure margins. The company’s debt-to-equity ratio (~35%) is manageable but warrants monitoring. Long-term growth hinges on cross-border logistics demand and efficient integration of acquisitions.

Competitive Analysis

TFI International’s competitive advantage lies in its diversified segment mix, balancing asset-heavy (LTL/TL) and asset-light (Logistics) operations. This mitigates cyclical risks while allowing margin flexibility. Its LTL segment benefits from regional density in Canada, while the TL segment’s specialized services (e.g., flatbed, tank containers) cater to niche markets. The Logistics segment’s brokerage and freight forwarding capabilities complement its asset-based units, creating cross-selling opportunities. However, TFI faces stiff competition from larger U.S.-based LTL players like Old Dominion (ODFL) and truckload rivals such as Knight-Swift (KNX), which have broader domestic networks. TFI’s smaller scale in the U.S. limits its pricing power compared to giants like XPO Logistics (XPO). Its asset-light model in Logistics also competes with tech-driven brokers like CH Robinson (CHRW). The company’s M&A strategy (e.g., the 2021 UPS Freight acquisition) strengthens its U.S. LTL footprint but integration risks persist.

Major Competitors

• Old Dominion Freight Line (ODFL): ODFL dominates the U.S. LTL market with superior operating margins (~30% vs. TFI’s mid-teens) due to its premium pricing and efficient network. However, it lacks TFI’s asset-light logistics segment and has minimal exposure to Canada.
• Knight-Swift Transportation (KNX): KNX is a U.S. truckload leader with a larger fleet and broader geographic coverage. Its scale provides cost advantages, but TFI’s LTL and Logistics diversification offers more balanced revenue streams.
• XPO Logistics (XPO): XPO’s tech-enabled LTL and logistics services rival TFI’s, with a stronger European presence. However, XPO’s recent spin-offs have narrowed its focus, while TFI retains a more integrated model.
• C.H. Robinson Worldwide (CHRW): CHRW is a pure-play logistics broker with a vast carrier network but no owned assets. TFI’s hybrid model provides more control over capacity, though CHRW’s tech platform offers superior visibility.
• United Parcel Service (UPS): UPS competes in package/courier and LTL (via UPS Freight sale to TFI). Its global scale dwarfs TFI, but TFI’s asset-light approach in logistics allows lower capital intensity.