ArcBest Plunges 13.6%: What's Fueling This Logistical Collapse?

Summary
• ArcBest (ARCB) slumps to $68.42, a 13.57% drop from its $82.00 close
• Q2 revenue falls 5.2% YoY to $1.02B, missing estimates by 2.8%
• Adjusted EPS of $1.36 trails expectations by 7.1%
• Air Freight & Logistics sector faces crosswinds as UPS also declines 1.72%
Today’s carnage in ARCB reflects a perfect storm: Q2 earnings miss, softening demand, and sector-wide pricing pressure. With the stock trading at a 52-week low of $55.19, the market is betting on a bleak summer for logistics providers. The $70.87 price tag now sits perilously close to its 200-day moving average of $85.15.

Q2 Earnings Miss Ignites Sell-Off
ArcBest’s Q2 earnings report delivered a one-two punch to investors. Revenue fell 5.2% year-on-year to $1.02 billion, missing consensus estimates by 2.8%, while adjusted EPS of $1.36 trailed expectations by 7.1%. The asset-based segment, which accounts for 69% of revenue, saw a 3.1% decline in yield despite a 4.3% increase in daily shipments. Meanwhile, the asset-light segment’s operating profit of $1.1 million marked a turnaround from seven consecutive quarterly losses. The market’s reaction—trading down 1.1% immediately post-announcement—has since spiraled into a 13.6% intraday plunge as sell-side analysts downgrade expectations for the remainder of 2025.

Air Freight & Logistics Sector Sags on Tariff Uncertainty
The Air Freight & Logistics sector is under siege from global trade volatility. UPS, the sector leader, fell 1.72% alongside ARCB, reflecting broader concerns over U.S.-China tariff negotiations and shifting trade routes. While ArcBest’s decline is tied to its earnings, sector-wide headwinds—such as Kuehne+Nagel’s 92.8% adjusted operating ratio and DSV’s acquisition-driven margin pressures—suggest a challenging operating environment. The sector’s 30-day implied volatility of 28.28% (for ARCB’s September 19 contracts) underscores investor anxiety.

Options Playbook: Protecting Against a 5% Downside Move
• 200-day MA: $85.15 (far above current price)
• RSI: 47.82 (neutral but bearish bias)
• MACD: 2.79 (bullish) vs. Signal Line: 2.96 (bearish)
• Bollinger Bands: $77.27 (lower band) vs. current $68.42 (oversold territory)
• 30D MA: $78.69 (below price) vs. 200D MA: $85.15 (critical support)

With ARCB trading near its 52-week low of $55.19 and a 129.65x P/E ratio, the stock remains overvalued for its current fundamentals. Short-term traders should monitor the $70.87 level for a potential bounce, but bearish bias persists. The 12-month $4.84 EPS forecast (27.6% growth) appears optimistic given Q2’s 28.1% two-year EPS decline.

Top Option 1: ARCB20250815P75 (Put)
• Code: ARCB20250815P75
• Expiration: 2025-08-15
• Strike: $75
• Delta: -0.5179 (moderate bearish exposure)
• IV: 79.06% (elevated volatility)
• Leverage: 12.41% (high)
• Theta: -0.0478 (time decay manageable)
• Gamma: 0.0319 (responsive to price swings)
• Turnover: $590 (modest liquidity)
• Payoff at 5% downside ($67.33): $7.67 per contract
This put offers asymmetric upside if the stock breaches $70.87, with leverage amplifying gains in a sharp decline.

Top Option 2: ARCB20250919P65 (Put)
• Code: ARCB20250919P65
• Expiration: 2025-09-19
• Strike: $65
• Delta: -0.2129 (mild bearish exposure)
• IV: 46.57% (reasonable)
• Leverage: 43.07% (high)
• Theta: -0.0233 (minimal time decay)
• Gamma: 0.0226 (moderate sensitivity)
• Turnover: $2,380 (strong liquidity)
• Payoff at 5% downside ($67.33): $2.33 per contract
This longer-dated put provides downside protection with lower premium erosion, ideal for hedging a 1-2 month holding.

Backtest ArcBest Stock Performance
The backtest of ARCB's performance after a -14% intraday plunge shows favorable short-to-medium-term gains. The 3-Day win rate is 51.55%, the 10-Day win rate is 54.98%, and the 30-Day win rate is 58.73%, indicating a higher probability of positive returns in the immediate aftermath of such a significant drop. The maximum return during the backtest period was 7.39% over 30 days, suggesting that while there is some volatility, ARCB can recover and even exceed its pre-plunge levels.

Bull Case Falters—Short-Side Opportunities Emerge
ArcBest’s 13.6% plunge signals a breakdown in both earnings momentum and market sentiment. While the company’s 4% contractual rate increase and 5.9% general rate hike offer glimmers of hope, its 3.6% operating margin (flat YoY) and 7.4% five-year revenue CAGR fall short of sector benchmarks. Investors should prioritize short-term puts like ARCB20250815P75 for a 5% downside bet and monitor the $70.87 level as a critical inflection point. The sector leader, UPS, also declined 1.72%, reinforcing the need for caution. For now, the path of least resistance remains lower—until ArcBest can prove its pricing power can offset macroeconomic headwinds.