Forward Air Corporation (NASDAQ:FWRD), a logistics company based in United States, received a lot of attention from a substantial price movement on the NasdaqGS over the last few months, increasing to $62.62 at one point, and dropping to the lows of $51.46. This high level of volatility gives investors the opportunity to enter into the stock, and potentially buy at an artificially low price. A question to answer is whether Forward Air’s current trading price of $52.36 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 Forward Air’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 Forward Air
Is Forward Air still cheap?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 6.84% below my intrinsic value, which means if you buy Forward Air today, you’d be paying a reasonable price for it. And if you believe the company’s true value is $56.2, then there isn’t much room for the share price grow beyond what it’s currently trading. Is there another opportunity to buy low in the future? Since Forward Air’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.
Can we expect growth from Forward Air?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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. Though in the case of Forward Air, it is expected to deliver a relatively unexciting earnings growth of 8.69%, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for the company, at least in the near term.
What this means for you:
Are you a shareholder? FWRD’s 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 confidence to invest in the company should the price drop below its fair value?
Are you a potential investor? If you’ve been keeping tabs on FWRD, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook means it’s worth diving deeper into 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 Forward Air. You can find everything you need to know about Forward Air in the latest infographic research report. If you are no longer interested in Forward Air, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
To help readers see pass 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.