Why Knight-Swift Transportation Holdings Inc. (NYSE:KNX) Could Be Worth Watching
Knight-Swift Transportation Holdings Inc. (NYSE:KNX), might not be a large cap stock, but it saw a significant share price rise of over 20% in the past couple of months on the NYSE. With many analysts covering the mid-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, could the stock still be trading at a relatively cheap price? Let’s examine Knight-Swift Transportation Holdings’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.
See our latest analysis for Knight-Swift Transportation Holdings
What's the opportunity in Knight-Swift Transportation Holdings?
According to my valuation model, Knight-Swift Transportation Holdings seems to be fairly priced at around 12.08% above my intrinsic value, which means if you buy Knight-Swift Transportation Holdings today, you’d be paying a relatively fair price for it. And if you believe that the stock is really worth $41.53, then there isn’t really any room for the share price grow beyond what it’s currently trading. So, is there another chance to buy low in the future? Given that Knight-Swift Transportation Holdings’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 an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.
What kind of growth will Knight-Swift Transportation Holdings generate?
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 57% over the next couple of years, the future seems bright for Knight-Swift Transportation Holdings. 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? 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 an eye on KNX, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the optimistic prospect 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.
If you want to dive deeper into Knight-Swift Transportation Holdings, you'd also look into what risks it is currently facing. For example - Knight-Swift Transportation Holdings has 1 warning sign we think you should be aware of.
If you are no longer interested in Knight-Swift Transportation Holdings, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
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. 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.
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