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Echo Global Logistics Inc ECHO

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Exceptional Brokerage Backdrop Drives Impressive Q1 Performance for Echo; Operating Margins Surge

Matthew Young, CFA Equity Analyst

Analyst Note

| Matthew Young, CFA |

Narrow-moat Echo Global Logistics posted robust first-quarter gross revenue growth of 45% (year over year), nicely ahead of our forecast on impressive pricing acceleration. Growth was again driven by strong freight demand (including heavy retailer restocking), abundant spot opportunities, business wins in the managed transportation segment, and surging sell rates to shippers. The truckload volume rose 13%, while TL revenue per shipment spiked 39% thanks to extremely tight market capacity (greater pricing power), and Echo’s efforts to boost customer contract rates to catch up with large increases in buy rates paid to truckers. LTL loads were up 10%. Management raised its 2021 revenue guidance 15% at the midpoint, implying excellent operating conditions will persist near-term despite comparisons turning difficult.

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Company Profile

Business Description

Founded in 2005, Echo Global Logistics is an asset-light third-party logistics provider specializing in domestic truckload and less-than-truckload brokerage. It also offers intermodal and international air and ocean freight forwarding services, though to a lesser degree. Key strategic initiatives include gaining organic market share in the highly fragmented brokerage industry and supplementing its sales capabilities through tuck-in acquisitions. Echo completed its initial public offering in October 2009.

Contact
600 West Chicago Avenue, Suite 725
Chicago, IL, 60654
T +1 800 354-7993
Sector Industrials
Industry Integrated Freight & Logistics
Most Recent Earnings Mar 31, 2021
Fiscal Year End Dec 31, 2021
Stock Type Cyclical
Employees 2,593

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