Is It Too Late To Consider Buying USA Truck, Inc. (NASDAQ:USAK)?
USA Truck, Inc. (NASDAQ:USAK), which is in the transportation business, and is based in United States, received a lot of attention from a substantial price movement on the NasdaqGS over the last few months, increasing to $23.03 at one point, and dropping to the lows of $14.56. 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 USA Truck’s current trading price of $14.56 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 USA Truck’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
View our latest analysis for USA Truck
What is USA Truck worth?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 6.43% above my intrinsic value, which means if you buy USA Truck today, you’d be paying a relatively reasonable price for it. And if you believe the company’s true value is $13.68, then there isn’t really any room for the share price grow beyond what it’s currently trading. Although, there may be an opportunity to buy in the future. This is because USA Truck’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 USA Truck 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. However, with a relatively muted profit growth of 1.3% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for USA Truck, at least in the short term.
What this means for you:
Are you a shareholder? It seems like the market has already priced in USAK’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 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 USAK, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook 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.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on USA Truck. You can find everything you need to know about USA Truck in the latest infographic research report. If you are no longer interested in USA Truck, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
