3 Reasons HUBG is Risky and 1 Stock to Buy Instead
Since January 2026, Hub Group has been in a holding pattern, posting a small return of 0.5% while floating around $46.08. The stock also fell short of the S&P 500’s 9% gain during that period.
Is now the time to buy Hub Group, or should you be careful about including it in your portfolio? Dive into our full research report to see our analyst team’s opinion, it’s free.
Why Do We Think Hub Group Will Underperform?
We’re sitting this one out for now. Here are three reasons why HUBG doesn’t excite us, plus one stock we’d rather own.
1. Long-Term Revenue Growth Disappoints
A company’s long-term sales performance can indicate its overall quality. Any business can have short-term success, but a top-tier one grows for years. Over the last five years, Hub Group grew its sales at a sluggish 1.6% compounded annual growth rate. This fell short of our benchmarks.
2. EPS Took a Dip Over the Last Two Years
Although long-term earnings trends give us the big picture, we like to analyze EPS over a shorter period to see if we are missing a change in the business.
Sadly for Hub Group, its EPS declined by more than its revenue over the last two years, dropping 28%. This tells us the company struggled to adjust to shrinking demand.
3. New Investments Fail to Bear Fruit as ROIC Declines
A company’s ROIC, or return on invested capital, shows how much operating profit it makes compared to the money it has raised (debt and equity).
Over the last few years, Hub Group’s ROIC has unfortunately decreased significantly. We like what management has done in the past, but its declining returns are perhaps a symptom of fewer profitable growth opportunities.
Final Judgment
Hub Group doesn’t pass our quality test. With its shares underperforming the market lately, the stock trades at 24.1× forward P/E (or $46.08 per share). This valuation tells us a lot of optimism is priced in - we think other companies feature superior fundamentals at the moment. We’d recommend looking at a top digital advertising platform riding the creator economy.
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