Stock Analysis

Is Now An Opportune Moment To Examine Universal Logistics Holdings, Inc. (NASDAQ:ULH)?

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NasdaqGS:ULH
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While Universal Logistics Holdings, Inc. (NASDAQ:ULH) might not be the most widely known stock at the moment, it led the NASDAQGS gainers with a relatively large price hike in the past couple of weeks. Less-covered, small caps tend to present more of an opportunity for mispricing due to the lack of information available to the public, which can be a good thing. So, could the stock still be trading at a low price relative to its actual value? Let’s examine Universal Logistics Holdings’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

View our latest analysis for Universal Logistics Holdings

Is Universal Logistics Holdings still cheap?

Great news for investors – Universal Logistics Holdings is still trading at a fairly cheap price according to my price multiple model, where I compare the company's price-to-earnings ratio to the industry average. I’ve used the price-to-earnings ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 14.91x is currently well-below the industry average of 29.34x, meaning that it is trading at a cheaper price relative to its peers. What’s more interesting is that, Universal Logistics Holdings’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. 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 does the future of Universal Logistics Holdings look like?

earnings-and-revenue-growth
NasdaqGS:ULH Earnings and Revenue Growth March 23rd 2021

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. Universal Logistics Holdings' earnings over the next few years are expected to double, indicating a very optimistic future ahead. This should lead to stronger cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? Since ULH is currently trading below the industry PE ratio, it may be a great time to increase your holdings in the stock. With an optimistic profit outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as financial health to consider, which could explain the current price multiple.

Are you a potential investor? If you’ve been keeping an eye on ULH for a while, now might be the time to enter the stock. Its buoyant future profit outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy ULH. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed investment decision.

So while earnings quality is important, it's equally important to consider the risks facing Universal Logistics Holdings at this point in time. Case in point: We've spotted 2 warning signs for Universal Logistics Holdings you should be aware of.

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What are the risks and opportunities for Universal Logistics Holdings?

Universal Logistics Holdings, Inc. provides transportation and logistics solutions in the United States, Mexico, Canada, and Colombia.

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Rewards

  • Price-To-Earnings ratio (6.8x) is below the US market (15.5x)

  • Earnings are forecast to grow 2.1% per year

  • Earnings grew by 105.2% over the past year

Risks

  • Has a high level of debt

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Share Price

Market Cap

1Y Return

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Further research on
Universal Logistics Holdings

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