What Is Covenant Logistics Group, Inc.'s (NASDAQ:CVLG) Share Price Doing?
Covenant Logistics Group, Inc. (NASDAQ:CVLG), might not be a large cap stock, but it saw a significant share price rise of 35% in the past couple of months on the NASDAQGS. The recent share price gains has brought the company back closer to its yearly peak. 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? Today we will analyse the most recent data on Covenant Logistics Group’s outlook and valuation to see if the opportunity still exists.
Check out our latest analysis for Covenant Logistics Group
Is Covenant Logistics Group Still Cheap?
Great news for investors – Covenant Logistics Group is still trading at a fairly cheap price. According to our valuation, the intrinsic value for the stock is $72.22, but it is currently trading at US$53.35 on the share market, meaning that there is still an opportunity to buy now. Although, there may be another chance to buy again in the future. This is because Covenant Logistics Group’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.
What does the future of Covenant Logistics Group 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. 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 34% over the next couple of years, the future seems bright for Covenant Logistics Group. 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? Since CVLG is currently undervalued, it may be a great time to increase your holdings in the stock. With a positive 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 undervaluation.
Are you a potential investor? If you’ve been keeping an eye on CVLG for a while, now might be the time to make a leap. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy CVLG. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed investment decision.
So while earnings quality is important, it's equally important to consider the risks facing Covenant Logistics Group at this point in time. Case in point: We've spotted 4 warning signs for Covenant Logistics Group you should be aware of.
If you are no longer interested in Covenant Logistics Group, 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.
