- United States
Why J.B. Hunt Transport Services, Inc. (NASDAQ:JBHT) Could Be Worth Watching
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. 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 examine J.B. Hunt Transport Services’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.
Check out our latest analysis for J.B. Hunt Transport Services
What Is J.B. Hunt Transport Services Worth?
J.B. Hunt Transport Services is currently expensive based on my price multiple model, where I look at the company's price-to-earnings ratio in comparison to the industry average. In this instance, I’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. I find that J.B. Hunt Transport Services’s ratio of 21.05x is above its peer average of 12.84x, which suggests the stock is trading at a higher price compared to the Transportation industry. But, is there another opportunity to buy low in the future? Given that J.B. Hunt Transport Services’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.
Can we expect growth from J.B. Hunt Transport Services?
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. With profit expected to grow by a double-digit 16% over the next couple of years, the outlook is positive 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 well and truly priced in JBHT’s positive outlook, with shares trading above industry price multiples. However, this brings up another question – is now the right time to sell? If you believe JBHT should trade below its current price, selling high and buying it back up again when its price falls towards the industry PE ratio can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.
Are you a potential investor? If you’ve been keeping tabs on JBHT for some time, now may not be the best time to enter into the stock. The price has surpassed its industry peers, which means it is likely that there is no more upside from mispricing. However, the positive outlook is encouraging for JBHT, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.
So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. For example, we've discovered 1 warning sign that you should run your eye over to get a better picture of J.B. Hunt Transport Services.
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.
Valuation is complex, but we're helping make it simple.
Find out whether J.B. Hunt Transport Services is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.View the Free Analysis
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
J.B. Hunt Transport Services
J.B. Hunt Transport Services, Inc. provides surface transportation, delivery, and logistic services in North America.
Outstanding track record with excellent balance sheet and pays a dividend.