Why did CVLG's EPS trend downward in 2024?

Covenant Logistics' EPS experienced a downward trend in 2024 due to several factors:

1. **Challenging Freight Market**: The company's EPS was impacted by the soft freight market conditions. Despite strategic adjustments and improvements in operational efficiency, the decline in net income and EPS in Q1 2024 was notable, with EPS recording at $0.29 per diluted share, below the estimated $0.78.
2. **Missed Revenue Targets**: Covenant Logistics faced challenges in meeting revenue targets, which directly affected its EPS. For instance, in Q2 2024, the company missed analyst estimates by 1.75%, with revenue coming in at $287.50 million instead of the projected $292.63 million. Similarly, in Q3 2024, revenue was flat year-on-year, missing analyst estimates by 2.8%.
3. **Decrease in Equity Method Investment Income**: The company's equity method investment income from Transport Enterprise Leasing decreased to $3.7 million from $5.9 million, reflecting challenges in the equipment market. This reduction contributed to the overall decline in EPS.
4. **Comparing with Previous Years**: When comparing EPS with previous years, Q1 2024 EPS of $0.29 per diluted share fell significantly from $1.20 in the prior year. Similarly, Q2 2024 EPS of $1.04 was above the analyst estimate but lower than the EPS of $1.06 in the same quarter of the previous year.

In summary, Covenant Logistics' EPS trend downward in 2024 primarily due to the challenging freight market, missed revenue targets, decrease in equity method investment income, and comparison with previous years. These factors combined to affect the company's financial performance, leading to a decline in EPS.