Yahoo Finance What Does Knight-Swift Transportation Holdings Inc.'s (NYSE:KNX) Share Price Indicate?
Knight-Swift Transportation Holdings Inc. (NYSE:KNX), is not the largest company out there, but it received a lot of attention from a substantial price movement on the NYSE over the last few months, increasing to US$59.20 at one point, and dropping to the lows of US$53.03. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Knight-Swift Transportation Holdings' current trading price of US$55.96 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Knight-Swift Transportation Holdings’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
Check out our latest analysis for Knight-Swift Transportation Holdings
Is Knight-Swift Transportation Holdings Still Cheap?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 3.51% 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 $54.06, there’s only an insignificant downside when the price falls to its real value. Although, there may be an opportunity to buy in the future. This is because Knight-Swift Transportation Holdings’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 Knight-Swift Transportation Holdings?
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. 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. Though in the case of Knight-Swift Transportation Holdings, it is expected to deliver a relatively unexciting earnings growth of 1.4%, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for the company, at least in the near term.
What This Means For You
Are you a shareholder? It seems like the market has already priced in KNX’s future outlook, with shares trading around its fair value. 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 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 optimal time to buy, given it is trading around its fair value. However, the positive outlook 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.
So while earnings quality is important, it's equally important to consider the risks facing Knight-Swift Transportation Holdings at this point in time. While conducting our analysis, we found that Knight-Swift Transportation Holdings has 1 warning sign and it would be unwise to ignore this.
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.
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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.
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