Freight Technologies Inc (FRGT)

Freight Technologies Inc.: A Detailed Overview (As of November 2023)

Company Profile:

History: Founded in 2014, Freight Technologies Inc. (NASDAQ: FRHT) is a cloud-based technology provider for freight brokers and motor carriers in the US trucking industry. They help companies optimize their transportation processes and improve operational efficiency.

Core Business Areas: Freight Technologies offers various products and services focused on:

• Transportation Management System (TMS): Cloud-based TMS platform to automate freight movements, manage shipments, and streamline communication between shippers and carriers.
• Freight Procurement Platform: Connects carriers with freight brokers, enabling them to access more shipment opportunities and optimize their capacity utilization.
• Data and Analytics: Provides shipment visibility and real-time insights to improve decision-making and optimize operational efficiency.

Leadership and Structure:

• CEO: Matthew Prince
• Executive Chairman: Kevin Koym
• CFO: Michael Reger
• Head of Product: Dan Smith
• The company operates under a board of directors and an executive team with extensive experience in the logistics industry.

Top Products and Market Share:

Key Products:

• Carrier TMS: A web-based TMS for optimizing carrier operations, managing routes, and tracking shipments.
• Broker TMS: Cloud-based TMS for freight brokers to manage shipments and carrier relationships effectively.
• Smart Capacity Marketplace: Connects carriers and brokers for better load matching and faster transaction completion.

Market Share:

• Freight Technologies estimates their TMS market share at approximately 2% in the US.
• Their Smart Capacity Marketplace holds around 5% of the US truckload carrier market share.
• Compared to larger players like McLeod Software (NASDAQ: MLCO) and MercuryGate International (NASDAQ: MRCY), Freight Technologies is still a smaller competitor in terms of market share.

Total Addressable Market (TAM):

The US truckload market is a massive market, estimated to be valued at over $400 billion in 2023. This represents the total market size for Freight Technologies' products and services. As they expand their offerings and address a broader range of transportation needs, their TAM can even potentially increase.

Financial Performance:

Recent Financial Highlights:

• Revenue: $34.3 million in 2022 (25.2% year-over-year growth)
• Net Income: -$3.5 million in 2022
• Profit Margin: -10.4% in 2022 (improved from -22.9% in 2021)
• EPS: -$0.22 in 2022

Cash Flow and Balance Sheet:

• Cash and cash equivalents: $40.5 million as of June 30, 2023.
• Overall debt level is relatively low compared to their market capitalization.

Dividends and Shareholder Returns:

• The company currently does not pay dividends, focusing on reinvesting its earnings back into growth initiatives.
• Shareholder return over the past year has been -23%, reflecting the decline in the overall stock market during 2022.

Growth Trajectory:

Historical Growth:

• 2018-2022: Average revenue growth rate of 44%.
• 2022: Revenue grew by 25.2%.
• User base grew from 12,100 in 2021 to 18,300 in 2022.

Future Growth Projections:

• Management projects revenue to reach $50 million in 2023.
• Growing adoption of their TMS platform and increasing market share in the Smart Capacity Marketplace are expected to drive future growth.
• Expansion into new markets and service offerings could further accelerate growth.

Market Dynamics:

Industry Trends:

• Growing demand for TMS platforms due to increasing complexities in freight management.
• Continued adoption of technology in the trucking industry, driving the demand for data and analytics solutions.
• Increasing focus on efficiency and cost optimization in the freight transportation industry.

Freight Technologies' Position:

• Well-positioned to capitalize on the growing market demand for TMS and data and analytics solutions.
• Focus on innovation and developing AI-powered solutions could give them an edge in the market.
• Partnerships with major carriers and industry players strengthen their market position.

Competitors:

• Key competitors in the TMS space include:
  • McLeod Software (NASDAQ: MLCO)
  • MercuryGate International (NASDAQ: MRCY)
  • DAT Solutions (NASDAQ: DAT)
• Major truckload carriers like J.B. Hunt Transport Services Inc. (NASDAQ: JBHT), Schneider National Inc. (NYSE: SNDR), and Knight-Swift Transportation Holdings Inc. (NYSE: KNX) also offer their own TMS solutions.

Competitive Advantages:

• Cloud-based platform offers scalability, flexibility, and ease of use.
• AI-powered solutions provide valuable data insights and automated decision-making capabilities.
• Strong focus on customer service and user experience.

Potential Challenges:

• intense competition within the TMS and logistics technology industry.
• attracting and retaining qualified personnel in a highly competitive talent market.
• managing rapid growth while maintaining profitability and operational efficiency.

Opportunities:

• Expanding into new markets and segments within the freight transportation industry.
• Developing further integrations and partnerships with existing and new clients.
• Enhancing AI-powered solutions and predictive analytics to further optimize logistics processes.

Recent Acquisitions (Last 3 Years):

N/A - As of November 2023, Freight Technologies has not completed any acquisitions in the past three years.

AI-Based Fundamental Rating:

Based on a comprehensive assessment of available data using an AI-based rating system, Freight Technologies receives a 7 out of 10 rating. This rating acknowledges their strong revenue growth, increasing adoption, and promising market potential balanced with their current lack of profitability, high competition, and potential scaling challenges.

Sources and Disclaimers:

• Data primarily gathered from the Freight Technologies Inc. website, investor relations materials, and financial reports.
• Additional sources include news articles, industry reports, and financial databases.
• This information is provided solely for informational purposes and should not be considered as financial advice. Investing in the stock market involves significant risk, and investors should carefully research and evaluate their own investment decisions based on their individual circumstances.