Executive Summary & Business Overview

Strategic Synopsis

TFI International Inc. (TFII) is a premier North American transportation and logistics holding company, distinguished by a disciplined, acquisition-driven growth strategy and a decentralized operating model. The company has evolved into a diversified industry leader by acquiring and managing a vast network of over 90 operating companies across the United States, Canada, and Mexico.¹ The core investment narrative centers on a proven management team, led by Chairman, President, and CEO Alain Bédard, that excels at identifying, acquiring, and optimizing transportation assets, with a strategic preference for asset-light operations that generate strong and consistent free cash flow.¹ This approach has enabled TFI to navigate the highly cyclical freight industry while consistently returning capital to shareholders.

However, the investment case presents a central tension. On one hand, the company’s long-term success is a testament to its M&A prowess and operational discipline. On the other, its growth trajectory is intrinsically linked to significant execution risk, most notably the ongoing operational turnaround of TForce Freight, the large-scale U.S. Less-Than-Truckload (LTL) carrier acquired from UPS in 2021.⁴ Furthermore, as a major player in the freight market, TFI’s performance remains highly exposed to the volatility of North American economic cycles. This analysis seeks to provide a comprehensive and objective assessment of these competing factors to inform an investment decision.

Corporate Evolution and Structure

TFI International’s history is one of strategic transformation through inorganic growth. Originating as a regional Canadian trucking firm, the company has methodically expanded its geographic and operational scope to become a dominant North American entity.⁴ This expansion has been fueled by a prolific acquisition strategy, with the company completing over 140 acquisitions since 2008 alone.⁶ This has fundamentally reshaped the company’s profile; as of fiscal year 2023, approximately 66% of its revenue was generated in the United States, a significant shift that underscores its strategic focus on the larger U.S. market.²

The company’s shares are publicly traded on both the New York Stock Exchange (NYSE) and the Toronto Stock Exchange (TSX) under the ticker symbol TFII, providing access to a broad base of international investors.¹ The corporate structure is that of a holding company overseeing a large portfolio of independently operated subsidiaries. This decentralized model is a cornerstone of TFI’s strategy, allowing local management teams to remain in place post-acquisition, fostering an entrepreneurial culture and enabling operational agility responsive to local market conditions.¹

Operating Segments Deep Dive

TFI International’s operations are organized into four distinct business segments, each contributing to its comprehensive service offering. Understanding the characteristics and performance of these segments is fundamental to analyzing the consolidated entity.

1. Package and Courier (P&C): This segment specializes in the expedited, time-sensitive delivery of letters, documents, small parcels, and palletized freight.³ It operates primarily in Canada through well-established brands such as Canpar Express, ICS Courier, and Loomis Express.⁴ This segment is closely tied to e-commerce trends and business-to-consumer (B2C) and business-to-business (B2B) shipping needs.

2. Less-Than-Truckload (LTL): The LTL segment involves the pickup, consolidation, line-haul transport, and delivery of smaller freight shipments that do not require the use of an entire trailer.³ This segment is of paramount strategic importance to TFI. The transformational US$800 million acquisition of UPS Freight in 2021, subsequently rebranded as TForce Freight, dramatically scaled TFI’s presence in the U.S. LTL market, making it one of the largest carriers in North America.² The successful integration and operational improvement of TForce Freight represent a key value driver for the company.

3. Truckload (TL): This segment focuses on the transport of full trailer loads directly from a shipper to a destination.³ TFI’s Truckload operations are further divided into two sub-segments:

• Specialized: Involves the transport of goods requiring specialized equipment, such as flatbeds for building materials or tankers for bulk liquids. The April 2024 acquisition of Daseke, a leading flatbed and specialized carrier in North America, was a major strategic move to significantly bolster this division.⁸
• Conventional: Primarily utilizes standard dry vans for a wide range of consumer and industrial goods.⁴

4. Logistics: This segment provides asset-light logistics and transportation services, including freight brokerage, warehousing, and last-mile delivery solutions.³ TFI’s strategic preference for asset-light operations is most evident here, as this model reduces capital intensity and provides greater flexibility through economic cycles compared to asset-heavy trucking operations.¹

Industry Dynamics & Market Environment

The North American Freight Cycle (2022-2025)

The North American transportation and logistics industry is inherently cyclical, with freight demand and pricing power closely tied to broader macroeconomic conditions. The period from 2023 through mid-2025 has been characterized by a prolonged “freight recession,” marked by subdued freight volumes, widespread inventory destocking by retailers and manufacturers, and a soft rate environment for carriers.¹⁰

Recent economic data from mid-2025 indicates that these challenging conditions persist. Cooling consumer demand, the lingering inflationary effects of trade tariffs, and a high interest rate environment have collectively delayed a robust market recovery.¹¹ This weakness is quantifiable in official statistics. According to the U.S. Bureau of Transportation Statistics, total North American transborder freight value decreased by 4.9% in May 2025 compared to May 2024. The decline was particularly acute in U.S.-Canada trade, a critical market for TFI, which saw freight value fall by 12.7% year-over-year.¹² This environment creates significant top-line pressure for all carriers, including TFI, and places a premium on operational efficiency and cost control.

Secular Growth Driver: The E-commerce Revolution

Despite the cyclical headwinds, the logistics industry is supported by a powerful secular tailwind: the unabated growth of e-commerce. The rise of online retail has fundamentally reshaped supply chains, driving a structural shift away from traditional bulk B2B shipments to retailers and toward a high volume of individual B2C package deliveries directly to consumers.¹³ This explosion in parcel volume has placed immense strain on existing logistics networks, which were often not designed for this type of high-frequency, small-consignment model.¹³

This shift has given rise to the “Amazon effect,” whereby consumer expectations have been conditioned to demand lightning-fast delivery (often same-day or next-day), complete order transparency through real-time tracking, and free or low-cost shipping and returns.¹³ Meeting these expectations is no longer a competitive advantage but a baseline requirement, compelling logistics providers to make massive, non-discretionary investments in technology, automation, and network infrastructure.¹⁶ This long-term trend directly benefits TFI’s P&C, LTL, and Logistics segments, which are integral to fulfilling e-commerce orders through last-mile delivery, sophisticated warehousing, and efficient sorting and consolidation services.

Key Industry Challenges & Structural Shifts

Beyond the immediate economic cycle, all industry participants must navigate several structural challenges and shifts that are reshaping the competitive landscape.

• Labor Shortages and Wage Inflation: A persistent, industry-wide shortage of qualified truck drivers remains a primary constraint on capacity growth. This scarcity creates a competitive labor market, driving wage inflation and increasing operating costs for carriers.¹⁸
• Technological Disruption: Technology is a critical differentiating factor. The adoption of Artificial Intelligence (AI) for dynamic route optimization and demand forecasting, robotics and automation in warehouses, and advanced Transportation Management Systems (TMS) are becoming essential for improving efficiency and maintaining a competitive edge.¹⁰
• Regulatory & Environmental Pressures: There is a growing regulatory and social push for greener transportation. This is expected to necessitate significant future investment in cleaner technologies, such as electric or hydrogen-powered trucks, and could lead to the implementation of carbon taxes. These factors represent a long-term risk that could substantially increase both operational and capital expenditures for carriers.¹⁹
• Industry Consolidation: The North American trucking and logistics market remains highly fragmented, particularly in the truckload segment. This creates a fertile environment for large, well-capitalized companies to act as consolidators.²⁴

The confluence of these pressures—a cyclical freight downturn that squeezes revenues, combined with the secular need for heavy investment in technology and greener fleets—creates a challenging environment for smaller, less-capitalized operators. These companies may lack the financial resources to both weather a cyclical trough and make the necessary long-term investments to remain competitive. This dynamic accelerates industry consolidation, creating a target-rich environment for disciplined acquirers. For a company like TFI, whose core strategy is growth through acquisition, this market structure is a significant advantage. Its ability to generate strong free cash flow even during a downturn provides it with a powerful strategic weapon: the capital to acquire assets counter-cyclically, often at depressed valuations when competitors are forced to retrench. This can lead to outsized returns on investment when the freight cycle inevitably turns positive.

Competitive Position & Strategic Advantages

The Competitive Arena

TFI International operates in a highly competitive landscape, facing different rivals across its diverse business segments. In the strategically crucial LTL market, its primary competitors include industry leaders with extensive networks and strong brand recognition, such as Old Dominion Freight Line (ODFL), XPO, Saia (SAIA), and ArcBest (ARCB).²⁵ In its other segments, it competes with integrated logistics giants like FedEx and UPS, a vast number of regional and national truckload carriers, and a fragmented field of logistics and brokerage firms.²¹

TFI’s Competitive Moats

Despite the intense competition, TFI has cultivated several distinct strategic advantages that form its competitive moat.

• Decentralized Operating Model: TFI’s strategy of acquiring companies while retaining their existing management teams and operational autonomy is a key differentiator.¹ This model fosters an entrepreneurial spirit at the subsidiary level, allowing for nimble and agile decision-making that is responsive to local market dynamics. The corporate parent provides strategic oversight, capital allocation discipline, and back-office support, creating a structure that combines the benefits of scale with the agility of smaller operators.
• Acquisition as a Core Competency: Under the long-term leadership of CEO Alain Bédard, TFI has refined a highly disciplined and repeatable M&A playbook. The company has demonstrated a consistent ability to identify well-managed but underperforming or non-core assets, acquire them at accretive valuations, and apply its operational expertise to unlock efficiencies and improve profitability.¹ This skill in value-creating M&A is arguably TFI’s most significant and defining competitive advantage.
• Asset-Light Preference: A core tenet of TFI’s philosophy is a preference for an asset-light business model.¹ By emphasizing services like freight brokerage and logistics and utilizing independent contractors alongside its company-owned fleet, TFI reduces its capital intensity. This approach enhances flexibility, allowing the company to scale its capacity up or down in response to market demand without being burdened by the high fixed costs of owning every asset. This results in higher returns on invested capital and greater resilience across economic cycles.²³
• Network Density and Scale: With a network spanning over 635 facilities across North America, TFI possesses significant operational scale.¹ This extensive footprint creates high barriers to entry for smaller competitors and allows for superior route and network optimization, which in turn reduces empty miles, lowers fuel consumption, and improves asset utilization.

While the decentralized model is a source of strength, it also introduces a layer of complexity. Managing a portfolio of over 90 distinct operating companies requires exceptional strategic oversight to ensure consistent financial reporting, disciplined capital allocation, and alignment with the parent company’s objectives. The success of this model is heavily dependent on the vision and execution of a relatively small corporate team, with CEO Alain Bédard being central to this process. This creates a notable “key-person risk,” as his leadership and capital allocation acumen are fundamental to the TFI value creation story. An eventual leadership transition, therefore, represents a significant long-term uncertainty that investors must consider. The investment thesis is tied not just to a portfolio of transportation assets, but to a specific management philosophy and a capital allocation strategy executed by a particular leader.

Peer Benchmarking Analysis

To contextualize TFI’s performance, it is essential to compare its key financial and operational metrics against those of its primary publicly traded peers. The following table provides a snapshot based on trailing-twelve-month (TTM) data.

Metric	TFI International	Old Dominion (ODFL)	Saia (SAIA)	XPO	ArcBest (ARCB)	Knight-Swift (KNX)
Market Cap	$7.07B	$35.31B	$8.89B	$16.29B	$1.98B	$7.03B
Net Margin	4.48%	N/A	N/A	N/A	3.90%	2.22%
Return on Equity (ROE)	15.45%	N/A	12.69%	N/A	8.67%	2.30%
Return on Assets (ROA)	5.72%	N/A	10.63%	N/A	4.66%	1.51%
P/E Ratio (TTM)	19.50	31.35	30.80	36.78	15.79	32.60
EV/EBITDA (TTM)	10.11	N/A	13.94	N/A	N/A	9.29

Note: Data compiled from multiple sources and may reflect slight variations in calculation methodologies. ODFL, SAIA, and XPO data for some metrics were not available in the provided sources. Market cap figures are illustrative and subject to market fluctuation.

Sources: 26

The data reveals that TFI’s profitability metrics, such as Net Margin and ROE, are solid but trail those of best-in-class operators like Old Dominion (whose historical performance is known to be superior). Its valuation, reflected in its P/E ratio, is lower than most of its high-quality LTL peers like ODFL, SAIA, and XPO, suggesting the market may be pricing in the execution risk associated with its turnaround stories.

Financial Performance & Growth History (2020-2024)

Five-Year Financial Review

An analysis of TFI International’s financial performance from 2020 to 2024 reveals a period of dramatic transformation and cyclical volatility. The period encompasses the initial shock of the COVID-19 pandemic, the subsequent surge in freight demand, the landmark acquisition of UPS Freight, and the freight recession that began in 2023.

Financial Metric (in millions USD)	2020	2021	2022	2023	2024
Total Revenue	$3,781	$7,220	$8,812	$7,521	$8,397
Revenue before Fuel Surcharge	$3,484	$6,469	$7,357	N/A	N/A
Operating Income	$417	$889	$1,146	$505	$422
Net Income	$276	$664	$823	$505	$422
Diluted EPS ($)	$3.03	$6.97	$9.02	$5.80	$4.96
Net Cash from Operating Activities	$611	$855	$972	$1,014	$1,063
Free Cash Flow	$545	$701	$881	$776	$769

Note: Data is compiled from TFI’s 2020, 2021, 2022, and 2024 annual reports. 2023 and 2024 figures for Operating Income and Net Income are from different sources and may reflect adjusted vs. GAAP figures, requiring careful interpretation. Revenue before fuel surcharge was not consistently reported in later years’ summary tables.

Sources: 18

The data clearly illustrates the impact of the UPS Freight acquisition, which closed in April 2021.³⁴ Total revenue nearly doubled from 2020 to 2021 and continued to grow into 2022. The subsequent decline in revenue in 2023 reflects the challenging macroeconomic environment of the freight recession. Despite this top-line volatility, Net Cash from Operating Activities and Free Cash Flow have remained remarkably strong and resilient, a testament to the company’s focus on cash generation and its asset-light model.

Segment Performance Analysis

A granular analysis of segment performance is crucial for understanding the underlying drivers of TFI’s consolidated results. The divergent trends within each segment highlight the diversified nature of the company’s portfolio.

Revenue before Fuel Surcharge (in millions USD)	2020	2021	2022	2023	2024
Package and Courier	$519	$560	$499	N/A	N/A
Less-Than-Truckload	$552	$2,441	$3,244	N/A	N/A
Truckload	$1,612	$1,901	$1,986	N/A	N/A
Logistics	$836	$1,621	$1,689	N/A	N/A
Operating Income (in millions USD)	2020	2021	2022	2023	2024
Package and Courier	$86	$108	$135	$110	$106
Less-Than-Truckload	$74	$483	$88	$390	$249
Truckload	$197	$230	$365	$228	$223
Logistics	$73	$143	$140	$146	$133

Note: Data compiled from multiple annual reports. There are inconsistencies in reporting that require careful interpretation. For example, the 2022 LTL operating income of $88M appears to be a quarterly figure from Q4 2022 reported in the annual summary, not the full-year figure. Full-year 2022 LTL operating income was significantly higher. 2023 and 2024 segment revenue data was not available in the provided materials.

Sources: 18

The most striking trend is the dramatic expansion of the LTL segment’s revenue following the 2021 acquisition of UPS Freight. Revenue surged from $552 million in 2020 to over $3.2 billion by 2022. The Truckload and Logistics segments also saw substantial growth during the post-pandemic economic boom. The decline in operating income for LTL and Truckload in 2023 and 2024 reflects the severe margin pressure experienced during the freight recession.

Balance Sheet and Cash Flow Analysis

TFI has historically maintained a disciplined approach to its balance sheet. As of the end of the second quarter of 2025, the company reported a funded debt to EBITDA ratio of 2.4 times, a manageable level of leverage that provides financial flexibility.⁸

The hallmark of TFI’s financial profile is its robust free cash flow (FCF) generation. In fiscal year 2024, a year characterized by weak freight market conditions, the company still generated an impressive $768.6 million in FCF.¹⁸ This strong performance continued into 2025, with FCF of $182 million in the second quarter, a 20% increase year-over-year.⁸ This consistent ability to convert earnings into cash, even during cyclical downturns, is a core strength that underpins the company’s capital allocation strategy of funding acquisitions and shareholder returns.

Recent Developments & Challenges (2022-2025)

Navigating the Freight Downturn

Management’s ability to execute through the challenging freight market of 2023-2025 provides a clear lens into the company’s operational discipline. The second quarter of 2025 serves as a compelling case study. While total revenue before fuel surcharge declined by 10% year-over-year, from $2.0 billion to $1.8 billion, the company achieved a significant improvement in profitability. Operating income rose to $170 million, and the operating margin expanded dramatically to 9.5%, up from just 2.5% in the prior-year period.⁸ This performance, as CEO Alain Bédard noted, demonstrates “solid margin performance across all of our business segments” and reflects a sharp focus on cost control, operational efficiency, and prioritizing “quality of revenue” over chasing volume in a weak market.⁸

The TForce Freight Turnaround

The integration and operational turnaround of TForce Freight (formerly UPS Freight) remains the single most critical strategic initiative for TFI. The acquired network was known to be inefficient, and improving its performance is key to unlocking shareholder value. The primary metric for measuring this progress is the operating ratio (OR), which represents operating expenses as a percentage of revenue.

Management has implemented several key initiatives to improve TForce’s efficiency. These include deploying new software (Optum) to optimize line haul and pickup-and-delivery (P&D) routes, a concerted effort to reduce the frequency of cargo claims and accidents, and exploring the use of AI to automate labor-intensive back-office functions.⁸ These efforts are beginning to yield tangible results. The U.S. LTL segment’s OR showed a marked sequential improvement, falling from a very high 98.9% in the first quarter of 2025 to 94% in the second quarter.³⁸ While this is still well above the levels of best-in-class LTL peers, the positive trajectory is a crucial proof point for management’s strategy.

Strategic Pivot: The Daseke Acquisition

In April 2024, TFI completed the acquisition of Daseke, a leading operator of specialized and flatbed transportation in North America.⁸ This transaction represents a major strategic expansion of TFI’s specialized truckload operations, significantly increasing its scale and market presence in the U.S. industrial economy. However, this increased exposure comes with near-term headwinds. Management has noted that uncertainty surrounding U.S. trade policy and tariffs has created a cautious environment among industrial customers, leading to softer demand for the types of services Daseke provides.⁸ The successful integration of Daseke and navigation of these industrial market crosswinds will be a key focus area through 2025 and 2026.

Capital Allocation Strategy

A Disciplined Framework

TFI International adheres to a clear and consistent capital allocation framework designed to maximize long-term shareholder value. The company’s priorities are explicitly hierarchical:

1. Strategic Acquisitions: The primary use of capital is to fund strategic, accretive acquisitions. TFI’s criteria are disciplined: targets must be immediately accretive to earnings per share and free cash flow, fit within one of the existing operating segments, be strong cash generators, and possess a strong management team.¹
2. Organic Investment: The second priority is internal investment in the business through capital expenditures (CapEx) on equipment, real estate, and technology. The company’s asset-light preference is reflected in its relatively moderate CapEx budget, which was guided to approximately $200 million for the full year 2025.⁸
3. Shareholder Returns: After funding M&A and organic investments, excess free cash flow is returned to shareholders through a combination of a consistently growing dividend and opportunistic share repurchase programs.⁹

Track Record of Execution

TFI’s execution of this strategy is well-documented. The company has returned a total of $2.3 billion to shareholders since 2017 through dividends and buybacks.³⁹ This commitment was evident even during the recent market downturn. In the second quarter of 2025, TFI deployed $124 million toward shareholder returns, consisting of $85 million in share repurchases and $39 million in dividend payments.⁸ Furthermore, the Board of Directors approved a 13% increase in the quarterly dividend in the fourth quarter of 2024, a clear signal of management’s confidence in the company’s future cash-generating capabilities.¹⁸

The company’s capital allocation behavior can be interpreted as a barometer of its strategic intentions. The current environment—characterized by a weak freight market, moderate internal CapEx, and robust free cash flow generation—allows TFI to simultaneously execute strong shareholder returns while preserving significant balance sheet capacity. This posture suggests management is building a “war chest” for future M&A. The prolonged industry weakness is likely to create attractive acquisition opportunities as less-capitalized competitors come under financial stress. Therefore, the current capital allocation mix indicates that management views the downturn as an opportunity to further consolidate the market. A significant acquisition announcement in late 2025 or early 2026 would serve as a strong confirmation of this counter-cyclical strategy in action.

Growth Opportunities & Strategic Initiatives

Organic Growth Levers

While TFI is known for its acquisition-led growth, several significant organic growth opportunities exist within its current portfolio.

• U.S. LTL Margin Expansion: The most substantial organic value creation opportunity lies in the continued operational improvement of TForce Freight. Closing the gap between its current operating ratio (94% in Q2 2025) and the industry-leading levels of peers like Old Dominion (which historically operates with an OR in the 70s or low 80s) would unlock hundreds of millions of dollars in incremental operating income on the existing revenue base.³⁸
• Cross-Border Synergies: TFI is uniquely positioned with a dominant network in Canada and a rapidly expanding footprint in the U.S. There is a significant opportunity to leverage these complementary networks to capture a greater share of the lucrative cross-border freight market, offering seamless service between the two countries.²⁰
• Technology and Efficiency: The continued rollout of technology platforms like Optum for route optimization and the broader application of AI in areas like pricing and back-office administration can drive further cost reductions and improve asset utilization across all business segments.⁸

Inorganic Growth (M&A)

Growth through acquisition remains the cornerstone of TFI’s long-term strategy. The North American transportation and logistics industry is still highly fragmented, offering a long runway for TFI to continue its role as a leading consolidator.²⁴ Management has explicitly signaled its readiness for future M&A activity in 2026, positioning the company to capitalize on opportunities as the freight market recovers.²³

Positioning for E-commerce

TFI’s Package and Courier and Logistics segments are directly aligned with the secular growth of e-commerce. The company’s investments and expertise in last-mile delivery, warehousing, and asset-light brokerage solutions position it to capture increasing demand as online retail continues to gain share from traditional brick-and-mortar channels.²⁰

Risk Factors & Industry Headwinds

Macroeconomic and Cyclical Risks

TFI’s financial performance is highly correlated with the health of the North American economy. A prolonged economic downturn, weak industrial production, or a sustained decline in consumer spending would continue to exert downward pressure on freight volumes and pricing, adversely impacting the company’s revenue and profitability.²⁰

Acquisition and Integration Risk

Given that M&A is TFI’s primary growth engine, its single greatest risk is the potential for failed or poorly executed integrations. The TForce Freight turnaround is the largest and most complex integration in the company’s history. A failure to achieve the targeted synergies and margin improvements would significantly impair the investment case and could lead to substantial write-downs.²⁰ Similarly, the successful integration of Daseke into the Truckload segment is critical for realizing the full value of that transaction.

Operational and Competitive Risks

• Driver Shortage: The chronic industry-wide shortage of qualified drivers is a persistent operational risk. An inability to attract and retain drivers could constrain growth, degrade service quality, and drive further wage inflation, which would compress margins.¹⁸
• Fuel Price Volatility: While TFI utilizes fuel surcharge mechanisms to mitigate the impact of rising diesel prices, these surcharges may not always fully and immediately offset cost increases. A rapid spike in fuel prices could therefore negatively impact near-term profitability.⁴²
• Intense Competition: The transportation industry is characterized by intense competition on both service and price. This competition can limit pricing power, especially during periods of weak demand, and requires continuous investment in service and technology to maintain market share.⁴²

Regulatory and Geopolitical Risks

• Environmental Regulations: A significant long-term risk is the increasing regulatory pressure to decarbonize transportation fleets. Future mandates requiring a transition to more expensive electric or hydrogen-powered vehicles could necessitate substantial capital expenditures, potentially reducing free cash flow available for acquisitions and shareholder returns.²³ Sustainalytics assigns TFI an ESG Risk Rating of 20.1, placing it in the “Medium Risk” category, which suggests that while the company has management systems in place, it remains exposed to material ESG issues.⁴⁵
• Trade Policy and Tariffs: As a major cross-border carrier with significant exposure to the industrial sector, TFI is vulnerable to shifts in trade policy. Management has explicitly cited uncertainty around tariffs as a headwind for its industrial truckload business, as it can cause customers to delay investment and shipping decisions.⁸

Valuation Analysis

Historical Context

An analysis of TFI’s valuation multiples relative to its own historical ranges is necessary to contextualize its current market standing. Over the past year, the stock has experienced significant volatility, with a 52-week range on the NYSE between $72.02 and $157.77.⁸ This wide range reflects the market’s fluctuating sentiment regarding the freight cycle and the progress of the TForce Freight turnaround. Current valuation metrics should be viewed within this context of heightened volatility.

Comparable Company Analysis

Benchmarking TFI’s valuation against its direct competitors provides a clear view of its relative positioning in the market. The table below compares key valuation metrics for TFI and its peers based on trailing-twelve-month (TTM) and forward estimates as of mid-2025.

Valuation Metric	TFI International	Ryder (R)	Saia (SAIA)	Knight-Swift (KNX)	Landstar (LSTR)
Market Cap	$7.78B	$7.32B	$8.37B	$7.03B	$4.82B
P/E (TTM, GAAP)	21.56	15.22	29.10	42.60	27.33
P/E (Forward, Non-GAAP)	19.63	13.77	34.71	29.92	28.94
EV/Sales (TTM)	1.30	1.25	2.72	1.34	0.94
EV/EBITDA (TTM)	10.11	5.72	13.94	9.29	16.15
Price/Book (TTM)	2.90	2.38	3.44	0.99	5.18
Levered FCF Margin (TTM)	8.94%	1.53%	-8.45%	0.07%	4.11%

Source: ²⁷

The analysis reveals a nuanced valuation picture. On a forward P/E basis, TFI (19.63) trades at a notable discount to its high-performing LTL peers like Saia (34.71) but at a premium to asset-heavy leasing company Ryder (13.77). Its EV/EBITDA multiple is in the middle of the pack. However, the most compelling metric is its Levered Free Cash Flow Margin of 8.94%, which is substantially superior to all listed peers, some of which have negative FCF margins. This disconnect suggests that while the market is pricing TFI’s earnings at a discount due to perceived risks, it may be undervaluing its exceptional ability to generate cash.

Sum-of-the-Parts (SOTP) Considerations

A single blended valuation multiple may not accurately capture the intrinsic value of TFI’s diverse portfolio of businesses. A sum-of-the-parts framework provides a more insightful lens. Under this approach, each of TFI’s four segments could be valued separately based on comparisons to pure-play public companies.

• The stable, high-margin Canadian P&C and LTL businesses might warrant a valuation multiple closer to that of a high-quality, mature transportation company.
• The U.S. LTL segment (TForce Freight) is a classic turnaround story and would likely carry a lower multiple to reflect its significant execution risk, but with substantial upside potential upon successful margin improvement.
• The cyclical Truckload segment would be valued in line with other TL carriers.
• The asset-light Logistics segment could be benchmarked against logistics and brokerage firms, which often command higher multiples due to their lower capital intensity.

This framework suggests that the market may be applying a “holding company discount” and overly penalizing the entire company for the risks concentrated in the U.S. LTL segment. This could be masking the value of the more stable Canadian operations and the attractive, asset-light logistics business. The primary catalyst to unlock this potential value is clear: management must deliver sustained, demonstrable margin improvement in the TForce Freight segment. If the market begins to believe that the turnaround is not only real but sustainable, it could lead to a significant re-rating of the LTL segment’s valuation, which would in turn lift the valuation of the entire consolidated company.

Key Questions to Address

This analysis synthesizes into answers for several key questions facing investors.

1. How sustainable is TFI’s competitive advantage in an increasingly consolidated industry?

TFI’s primary competitive advantage is not a technological moat or a network effect in the traditional sense, but rather a core competency in disciplined M&A and operational turnarounds. This advantage is sustainable as long as two conditions hold: the North American transportation industry remains fragmented (which it is), and the current management team maintains its disciplined capital allocation approach. The primary threat to this advantage is not external competition but internal execution risk on large, complex integrations like TForce Freight.

2. What is the company’s ability to maintain pricing power during economic downturns?

Recent performance during the 2023-2025 freight recession demonstrates a notable ability to protect profitability. While freight volumes and top-line revenue have declined in line with the market, management has successfully defended and even improved operating margins through aggressive cost controls and a strategic focus on “quality of revenue” over volume.8 This indicates a degree of pricing discipline and an ability to shed unprofitable business, preserving the bottom line in a weak environment.

3. How effectively has management allocated capital through the acquisition cycle?

Historically, management’s track record on capital allocation is strong, having built the company from a regional player into a North American leader through over 180 acquisitions since 1996.4 The strategy of balancing accretive M&A with consistent and growing shareholder returns has created significant long-term value. The ultimate verdict on the current cycle, however, will depend on the long-term success of the two largest recent acquisitions: UPS Freight (TForce Freight) and Daseke.

4. What are the realistic growth prospects given current market saturation levels?

Near-term organic revenue growth is likely to be constrained by the soft macroeconomic environment. The most significant and realistic growth driver in the medium term is not from market expansion but from margin expansion. The successful turnaround of TForce Freight represents the single largest opportunity to grow operating income. Long-term growth will continue to be driven by TFI’s consolidation strategy in the fragmented truckload and logistics markets, supplemented by the secular tailwind of e-commerce benefiting the P&C and Logistics segments.

5. How well-positioned is TFI for the next economic cycle?

TFI appears to be very well-positioned. The company has used the current downturn to rationalize its cost structure, improve operational efficiencies (particularly in U.S. LTL), and strengthen its balance sheet. Its strong free cash flow generation provides the flexibility to act opportunistically, potentially acquiring distressed assets at attractive prices before the next cyclical upswing begins. This counter-cyclical approach could allow TFI to emerge from the downturn with an enhanced market position and greater earnings power.

6. What are the key metrics investors should monitor for early warning signs or positive inflection points?

Given the strategic importance of the TForce Freight turnaround, the single most critical metric for investors to monitor is the U.S. LTL Segment Operating Ratio, reported quarterly.

• Positive Inflection Point: Consistent, sequential improvement in this OR (i.e., a declining percentage) would be the strongest evidence that the turnaround strategy is succeeding and that a significant source of value is being unlocked.
• Early Warning Sign: A stall or reversal in the improvement of this OR, particularly in a stable or improving freight market, would suggest that the operational challenges are more intractable than anticipated and would be a major red flag for the investment thesis.

Secondary metrics to monitor include company-wide free cash flow generation (as a measure of overall financial health), the funded debt-to-EBITDA ratio (to track balance sheet discipline), and the revenue and operating income growth by segment (to assess the health of the other core businesses).

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