Let's talk about the popular J.B. Hunt Transport Services, Inc. (NASDAQ:JBHT). The company's shares saw significant share price movement during recent months on the NASDAQGS, rising to highs of US$218 and falling to the lows of US$161. 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 J.B. Hunt Transport Services' current trading price of US$161 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let's take a look at J.B. Hunt Transport Services's outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
See our latest analysis for J.B. Hunt Transport Services
What is J.B. Hunt Transport Services worth?
The stock seems fairly valued at the moment according to my valuation model. It's trading around 7.5% below my intrinsic value, which means if you buy J.B. Hunt Transport Services today, you'd be paying a reasonable price for it. And if you believe the company's true value is $173.65, then there isn't much 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 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 an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.
What does the future of J.B. Hunt Transport Services look like?
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. J.B. Hunt Transport Services' earnings growth are expected to be in the teens in the upcoming years, indicating a solid future ahead. This should lead to robust cash flows, feeding into a higher share value.
What this means for you:
Are you a shareholder? JBHT'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 JBHT, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook 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.
So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. Every company has risks, and we've spotted 3 warning signs for J.B. Hunt Transport Services (of which 1 is concerning!) you should know about.
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.
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.