Knight-Swift Transportation Holdings Inc. (NYSE:KNX), which is in the transportation business, and is based in United States, saw significant share price movement during recent months on the NYSE, rising to highs of US$39.76 and falling to the lows of US$28.59. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Knight-Swift Transportation Holdings’s current trading price of US$30.36 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Knight-Swift Transportation Holdings’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
Is Knight-Swift Transportation Holdings still cheap?
According to my valuation model, Knight-Swift Transportation Holdings seems to be fairly priced at around 7.29% above my intrinsic value, which means if you buy Knight-Swift Transportation Holdings today, you’d be paying a relatively reasonable price for it. And if you believe the company’s true value is $28.30, then there isn’t really any room for the share price grow beyond what it’s currently trading. Although, there may be an opportunity to buy in the future. This is because Knight-Swift Transportation Holdings’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.
What does the future of Knight-Swift Transportation Holdings look like?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. Knight-Swift Transportation Holdings’s earnings over the next few years are expected to increase by 31%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.
What this means for you:
Are you a shareholder? KNX’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?
Are you a potential investor? If you’ve been keeping tabs on KNX, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Knight-Swift Transportation Holdings. You can find everything you need to know about Knight-Swift Transportation Holdings in the latest infographic research report. If you are no longer interested in Knight-Swift Transportation Holdings, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.