Is J.B. Hunt Transport Services, Inc. (NASDAQ:JBHT) Potentially Undervalued?
Today we're going to take a look at the well-established J.B. Hunt Transport Services, Inc. (NASDAQ:JBHT). The company's stock saw a significant share price rise of 22% in the past couple of months on the NASDAQGS. The recent jump in the share price has meant that the company is trading at close to its 52-week high. With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. But what if there is still an 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 the opportunity still exists.
View 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 our valuation model. It’s trading around 10.0% below our intrinsic value, which means if you buy J.B. Hunt Transport Services today, you’d be paying a fair price for it. And if you believe that the stock is really worth $235.20, then there’s not much of an upside to gain from mispricing. 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.
Can we expect growth from J.B. Hunt Transport Services?
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. With profit expected to grow by 48% over the next couple of years, the future seems bright for J.B. Hunt Transport Services. 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? 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 optimal 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 while earnings quality is important, it's equally important to consider the risks facing J.B. Hunt Transport Services at this point in time. At Simply Wall St, we found 1 warning sign for J.B. Hunt Transport Services and we think they deserve your attention.
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.
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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.
