At US$189, Is J.B. Hunt Transport Services, Inc. (NASDAQ:JBHT) Worth Looking At Closely?

J.B. Hunt Transport Services, Inc. (NASDAQ:JBHT) saw a double-digit share price rise of over 10% in the past couple of months on the NASDAQGS. While good news for shareholders, the company has traded much higher in the past year. With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. But what if there is still an opportunity to buy? Let’s take a look at J.B. Hunt Transport Services’s outlook and value based on the most recent financial data to see if the opportunity still exists.

See our latest analysis for J.B. Hunt Transport Services

What's The Opportunity In J.B. Hunt Transport Services?

The share price seems sensible at the moment according to our price multiple model, where we compare the company's price-to-earnings ratio to the industry average. In this instance, we’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. We find that J.B. Hunt Transport Services’s ratio of 33.54x is trading slightly above its industry peers’ ratio of 32.69x, which means if you buy J.B. Hunt Transport Services today, you’d be paying a relatively reasonable price for it. And if you believe that J.B. Hunt Transport Services should be trading at this level in the long run, then there should only be a fairly immaterial downside vs other industry peers. Although, there may be an opportunity to buy in the future. This is because J.B. Hunt Transport Services’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.

Can we expect growth from J.B. Hunt Transport Services?

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. With profit expected to grow by 72% over the next couple of years, the future seems bright for J.B. Hunt Transport Services. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What This Means For You

Are you a shareholder? It seems like the market has already priced in JBHT’s positive outlook, with shares trading around industry price multiples. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at JBHT? Will you have enough conviction to buy should the price fluctuate below the industry PE ratio?

Are you a potential investor? If you’ve been keeping tabs on JBHT, now may not be the most optimal time to buy, given it is trading around industry price multiples. However, the positive outlook is encouraging for JBHT, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

If you'd like to know more about J.B. Hunt Transport Services as a business, it's important to be aware of any risks it's facing. In terms of investment risks, we've identified 1 warning sign with J.B. Hunt Transport Services, and understanding it should be part of your investment process.

If you are no longer interested in J.B. Hunt Transport Services, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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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.