Our $371 target price is based on a 32x target multiple on our 2026 EPS estimate, above the upper end of its long-term P/E range of 14.5x to 27x forward earnings. Our target multiple is attributed to SAIA’s strong growth narrative, consistent execution, and ability to expand margins as it seasons its newly opened terminals.

Key downside risks to our target price include ongoing startup costs associated with SAIA’s large amount of recently-opened service centers in the coming year, which could continue to weigh on margins given the J-Curve from each of these terminals. Another key risk stems from the fact that SAIA is not the only player that had been aiming to add capacity via terminal openings, with peers like XPO and ODFL having taken similar approaches over the past year. This added capacity may increase risk of deterioration in LTL pricing discipline that’s persisted for over a decade, especially if the weak demand environment is prolonged.