Old Dominion Freight Plunged 8.42%—What's Next for Freight Giant Amid Earnings Dismay?

Summary
• Old Dominion Freight Line (ODFL) opened at $152.50 but plummeted to an intraday low of $145.53 before stabilizing at $148.46
• Q2 earnings of $1.27/share missed estimates and declined 14.2% YoY
• Operating ratio worsened to 74.6%, reflecting 270-bp deterioration from a year ago
• Sector peers like XPO Logistics (-0.77%) show mixed resilience amid broader freight sector headwinds

Old Dominion Freight Line's 8.42% selloff on July 30, 2025, marks its worst single-day drop in over 18 months. The stock's collapse follows a Q2 earnings report that revealed 6.1% revenue contraction and a 15.1% operating income decline. With freight volumes down 9.3% YoY and a deteriorating operating ratio, investors are scrambling to assess whether this represents a cyclical correction or a structural shift in the LTL sector.

Earnings Shock and Macroeconomic Headwinds
The 8.42% price collapse was triggered by Old Dominion's Q2 earnings report, which revealed a 6.1% revenue drop to $1.41B and a 14.2% EPS decline to $1.27. Management attributed the downturn to 'ongoing softness in the domestic economy,' with LTL tons per day falling 9.3% year-over-year. The operating ratio expanded to 74.6% from 71.9% in Q2 2024, signaling margin compression from lower volumes and rising costs in health benefits and depreciation. The company's guidance for Q3-Q4 remains clouded by 'persistent economic challenges,' with CEO Marty Freeman acknowledging the need to 'manage through a difficult operating environment.'

Trucking Sector Under Pressure as XPO Logs Weakness
The broader trucking sector mirrored Old Dominion's struggles, with XPO Logistics (XPO) down 0.77% intraday as of 16:28 ET. Covenant Logistics Group recently reported a 5% revenue increase but still faces capacity overhangs, while PAM Transportation posted a 112.5% operating ratio in Q2. The sector's fragility is underscored by rising cargo theft incidents and regulatory uncertainty, including Trump's proposed 30% tariffs on Mexican imports. Old Dominion's 8.42% drop outperformed XPO's modest decline, suggesting the market views its disciplined pricing strategy and $424.6M Q1-Q2 buybacks as partial mitigants.

Bearish Setup: Puts Outperform Calls in August Expiry
• 200-day MA: $180.02 (well above current price)
• RSI: 39.52 (oversold territory)
• MACD: 0.348 (bullish divergence) vs. Signal Line 0.612 (bearish)
• Bollinger Bands: 159.51–172.24 (current price at 148.46 near lower band)

Technical indicators suggest a short-term bearish bias with long-term oversold conditions. Key levels to monitor: 144.9 (52W low), 162.12 (previous close), and 165.88 (20-day MA). With implied volatility at 38.40% for the 8/15 145 put, the options market reflects significant downside expectations. Two top options:

• ODFL20250815P145
- Put Option
- Strike Price: $145
- Expiration: 2025-08-15
- IV: 38.40%
- Leverage Ratio: 46.41%
- Delta: -0.3631
- Theta: -0.0112
- Gamma: 0.0305
- Turnover: 12,255
Put Payoff (5% downside scenario): $26.47 per contract. This put offers strong leverage and liquidity, ideal for capitalizing on near-term volatility.

• ODFL20250815P140
- Put Option
- Strike Price: $140
- Expiration: 2025-08-15
- IV: 38.25%
- Leverage Ratio: 92.81%
- Delta: -0.2188
- Theta: -0.0322
- Gamma: 0.0241
- Turnover: 7,262
Put Payoff (5% downside scenario): $21.47 per contract. This option balances directional exposure with time decay, suitable for a 2–3 week trade.

If $145 breaks, ODFL20250815P145 offers short-side potential. Aggressive bulls may consider ODFL20250919C145 into a bounce above $152.12.

Backtest Old Dominion Freight Stock Performance
The backtest of ODFL's performance after a -8% intraday plunge shows favorable short-to-medium-term gains. The 3-Day win rate is 53.42%, the 10-Day win rate is 60.77%, and the 30-Day win rate is 59.37%, indicating a higher probability of positive returns in the immediate aftermath of the plunge. The maximum return during the backtest period was 4.36%, which occurred on day 59, suggesting that there is potential for recovery and even surpassing the previous price level.

Intraday Volatility: Watch for 144.9 Breakdown or Earnings Catalyst
Old Dominion Freight's 8.42% selloff reflects both near-term macroeconomic pain and structural LTL sector headwinds. While the stock's RSI at 39.52 suggests oversold conditions, the deteriorating operating ratio and 9.3% volume decline indicate underlying fragility. Investors should monitor the 144.9 (52W low) level for further breakdown signals and the 162.12 (previous close) as a potential short-term resistance. Sector leader XPO's -0.77% move underscores broad industry vulnerability. Positioning in the ODFL20250815P145 put offers a high-leverage, high-liquidity play on continued weakness, while a rebound above 162.12 could signal a temporary oversold bounce. Immediate action: Watch for $144.90 breakdown or Q3 guidance updates.