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What Does Marten Transport, Ltd.'s (NASDAQ:MRTN) Share Price Indicate?

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Marten Transport, Ltd. (NASDAQ:MRTN), is not the largest company out there, but it saw significant share price movement during recent months on the NASDAQGS, rising to highs of US$19.09 and falling to the lows of US$15.81. 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 Marten Transport's current trading price of US$16.77 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Marten Transport’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 Marten Transport

What is Marten Transport worth?

Good news, investors! Marten Transport is still a bargain right now according to my price multiple model, which compares the company's price-to-earnings ratio to the industry average. In this instance, I’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. I find that Marten Transport’s ratio of 21.47x is below its peer average of 26.54x, which indicates the stock is trading at a lower price compared to the Transportation industry. Another thing to keep in mind is that Marten Transport’s share price is quite stable relative to the rest of the market, as indicated by its low beta. This means that if you believe the current share price should move towards its industry peers, a low beta could suggest it is not likely to reach that level anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range again.

What kind of growth will Marten Transport generate?

earnings-and-revenue-growth
earnings-and-revenue-growth

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. However, with a relatively muted profit growth of 8.9% expected over the next year, growth doesn’t seem like a key driver for a buy decision for Marten Transport, at least in the short term.

What this means for you:

Are you a shareholder? Even though growth is relatively muted, since MRTN is currently trading below the industry PE ratio, it may be a great time to accumulate more of your holdings in the stock. However, there are also other factors such as capital structure to consider, which could explain the current price multiple.

Are you a potential investor? If you’ve been keeping an eye on MRTN for a while, now might be the time to make a leap. Its future profit outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy MRTN. 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.

In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. You'd be interested to know, that we found 1 warning sign for Marten Transport and you'll want to know about this.

If you are no longer interested in Marten Transport, 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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