Is It Too Late To Consider Buying Old Dominion Freight Line, Inc. (NASDAQ:ODFL)?

Today we're going to take a look at the well-established Old Dominion Freight Line, Inc. (NASDAQ:ODFL). The company's stock saw a decent share price growth of 17% on the NASDAQGS over the last few months. 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. However, what if the stock is still a bargain? Let’s take a look at Old Dominion Freight Line’s outlook and value based on the most recent financial data to see if the opportunity still exists.

Check out our latest analysis for Old Dominion Freight Line

What Is Old Dominion Freight Line Worth?

Old Dominion Freight Line appears to be overvalued by 34% at the moment, based on our discounted cash flow valuation. The stock is currently priced at US$206 on the market compared to our intrinsic value of $153.64. This means that the buying opportunity has probably disappeared for now. But, is there another opportunity to buy low in the future? Since Old Dominion Freight Line’s share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

What kind of growth will Old Dominion Freight Line generate?

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 32% over the next couple of years, the future seems bright for Old Dominion Freight Line. 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? ODFL’s optimistic future growth appears to have been factored into the current share price, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe ODFL should trade below its current price, selling high and buying it back up again when its price falls towards its real value 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 an eye on ODFL for a while, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the positive outlook is encouraging for ODFL, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

So while earnings quality is important, it's equally important to consider the risks facing Old Dominion Freight Line at this point in time. Case in point: We've spotted 1 warning sign for Old Dominion Freight Line you should be aware of.

If you are no longer interested in Old Dominion Freight Line, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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.