We Think Heartland Express (NASDAQ:HTLD) Has A Fair Chunk Of Debt

Howard Marks put it nicely when he said that, rather than worrying about share price volatility, 'The possibility of permanent loss is the risk I worry about... and every practical investor I know worries about.' It's only natural to consider a company's balance sheet when you examine how risky it is, since debt is often involved when a business collapses. We can see that Heartland Express, Inc. (NASDAQ:HTLD) does use debt in its business. But the real question is whether this debt is making the company risky.

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When Is Debt Dangerous?

Generally speaking, debt only becomes a real problem when a company can't easily pay it off, either by raising capital or with its own cash flow. If things get really bad, the lenders can take control of the business. However, a more usual (but still expensive) situation is where a company must dilute shareholders at a cheap share price simply to get debt under control. Of course, debt can be an important tool in businesses, particularly capital heavy businesses. When we examine debt levels, we first consider both cash and debt levels, together.

What Is Heartland Express's Debt?

The image below, which you can click on for greater detail, shows that Heartland Express had debt of US$179.4m at the end of September 2025, a reduction from US$193.9m over a year. On the flip side, it has US$32.7m in cash leading to net debt of about US$146.8m.

A Look At Heartland Express' Liabilities

The latest balance sheet data shows that Heartland Express had liabilities of US$121.4m due within a year, and liabilities of US$360.5m falling due after that. Offsetting this, it had US$32.7m in cash and US$80.8m in receivables that were due within 12 months. So it has liabilities totalling US$368.5m more than its cash and near-term receivables, combined.

This deficit is considerable relative to its market capitalization of US$603.3m, so it does suggest shareholders should keep an eye on Heartland Express' use of debt. This suggests shareholders would be heavily diluted if the company needed to shore up its balance sheet in a hurry. When analysing debt levels, the balance sheet is the obvious place to start. But it is future earnings, more than anything, that will determine Heartland Express's ability to maintain a healthy balance sheet going forward. So if you're focused on the future you can check out this free report showing analyst profit forecasts.

View our latest analysis for Heartland Express

In the last year Heartland Express had a loss before interest and tax, and actually shrunk its revenue by 20%, to US$869m. We would much prefer see growth.

Caveat Emptor

While Heartland Express's falling revenue is about as heartwarming as a wet blanket, arguably its earnings before interest and tax (EBIT) loss is even less appealing. To be specific the EBIT loss came in at US$51m. Considering that alongside the liabilities mentioned above does not give us much confidence that company should be using so much debt. So we think its balance sheet is a little strained, though not beyond repair. Another cause for caution is that is bled US$68m in negative free cash flow over the last twelve months. So in short it's a really risky stock. When I consider a company to be a bit risky, I think it is responsible to check out whether insiders have been reporting any share sales. Luckily, you can click here ito see our graphic depicting Heartland Express insider transactions.

If, after all that, you're more interested in a fast growing company with a rock-solid balance sheet, then check out our list of net cash growth stocks without delay.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.