Wall Street reacts to Proficient’s earnings: a 25% stock decline

Proficient Auto Logistics gave a brutal overview of conditions in the auto hauling market in its first quarter earnings call with analysts Monday, and Wall Street acted accordingly a day later.

Proficient (NASDAQ: PAL) saw its stock close the day down $2.67 to $7.77, a drop of 25.57%, per Yahoo Finance. Volume was more than 400% of its normal level.

Proficient stock had gotten an upward kick after third quarter earnings when those numbers, while not strong in terms of income, demonstrated the company was producing a solid amount of cash. Its stock rose to $8.55 from $6.58 on November 12, the day after the earnings came out in the third quarter.

But with Tuesday’s downward slide, it has given back almost 40% of those gains.

There were internal benchmarks at Proficient outlined by CEO Rick O’Dell on the earnings call. He spoke of a strong balance sheet–net debt to trailing 12-month EBITDA closed the year at 1.5X from 2.2X midway through the year–and it could claim growth on the back of the acquisition of Brothers Auto Transport.

CFO Brad Wright said on the earnings call that the strong balance sheet means acquisitions can be considered. “(The balance sheet) does give us some flexibility and some dry powder to the extent that an M&A opportunity came along, for example, we’ve got a lot of flexibility to use cash or to take on additional leverage or however we might choose to approach that,” he said.

But the message otherwise was grim.

January historically bad

O’Dell highlighted first quarter 2026 performance to back up his point. The seasonally adjusted annual rate (SAAR) for auto sales in January was less than forecast “and while still being finalized, may be the lowest monthly SAAR in several years as severe winter weather across multiple regions disrupted dealership operations and delayed consumer purchase decisions.”

O’Dell did say he was optimistic for a post-winter market that would see “healthy dealer inventory levels, continued sales incentives and a stronger tax refund season.”

“We continue to show discipline in our pursuit of new business and in the retention of incumbent business to ensure sustainable profitability and reinvestment,” he said. “Our financial performance in automotive trucking is not universally healthy in this market, we are well positioned to improve our performance in a down market, generate strong cash flow and respond quickly and efficiently to customer needs as the market improves.”

But the fourth quarter was a challenge. O’Dell said October started with a SAAR annualized to 15.3 million units, which would be considered weak. (The full 2024 SAAR was 15.8 million units).

Market conditions improved slightly from there, O’Dell said, but not by a large amount. “The full quarter saw our results finish lower year-over-year and lacked a more typical seasonal year-end volume push,” he said.

The peak for 2025 was in March and April as cars were moved into place ahead of expected tariffs, O’Dell said.

Big goodwill charge

Likely contributing to the significant drop in the stock price was that Proficient took a non-cash goodwill impairment charge of $27.8 million. It’s a downgrade of the company’s asset base.

And while it doesn’t impact the company’s operating ratio or operating income, the charge does reflect “an updated fair value based on a discounted cash flow analysis and primarily reflects downward changes in market conditions since Proficient had its IPO in May 2024,” O’Dell said.

Proficient did eke out a small improvement in its adjusted operating ratio (OR), strengthening to 98.6% from 98.8%. The adjusted OR was 96.3% in the third quarter. On the call, O’Dell said the company expects a full year improvement of 150 basis points in its adjusted OR, which was 97.5% for the 12 months.

That won’t be accomplished by chasing after volume for the sake of it. O’Dell said Proficient has “gained new business in bid processes and expects that to continue.”

But he added that the “competitiveness of the pricing environment is such that we’re forced to bow out of certain incumbent pieces of business when the price point moves below a level where we can attract and retain drivers and produce an acceptable return.”

President and COO Amy Rice expanded on Wright’s comments about the level of competition for available business. She said Proficient is “seeing a lot of carriers with underutilized capacity or the amount of volume that they’re carrying is lesser than they would like to be carrying and it’s resulting in carrier bidding at rates that, in many cases, are below a threshold that we think represents healthy reinvestment.”

Rice acknowledged that government crackdowns on non-domiciled and non-English speaking drivers has impacted driver availability.

But she said Proficient was “lightly insulated” from that trend. “We don’t hire drivers

who are new CDL recipients,” she said. “We require drivers that have experience driving a large truck before they move into auto haul as it’s specialized.”

Total operating revenue did rise to $105.4 million from $94.5 million, but that was impacted by the Brothers acquisition.

Adjusted operating income, which would not be impacted by the goodwill charge, was $1.5 million compared to $1.14 million in the fourth quarter of 2024.

Proficient’s goal to increase the percent of its deliveries driven by company drivers recorded a small amount of success year-on-year. Company deliveries made up 37% of deliveries in the quarter, compared to 35% a year ago.

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The post Wall Street reacts to Proficient’s earnings: a 25% stock decline appeared first on FreightWaves.

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