Knight-Swift Transportation Could Double In Value This Year
The institutions have been buying Knight-Swift Transportation (NYSE: KNX) for the last two years. Institutional activity has been net-bullish for 7 consecutive quarters and we don’t see that trend ending. The trucking industry is in a heyday that is supported by high demand and high pricing that is leading to outperformance on the top and bottom lines. Considering this company is actively working to build out its fleet, territory, and operations we see a potential for higher share prices. Considering the stock is trading at only 9X its earnings compared to 17X for Saia, 18X for J.B. Hunt, and 25X for Old Dominion Freight Line we see the potential for share prices to advance up to 100% and possibly more. And for the Institutions? They already own 86% of the company and that figure is on the rise.
Dave Jackson, CEO of Knight-Swift, commented, "We continue to grow and diversify our business while improving our results and achieved revenue growth and margin expansion in every segment, including recently-acquired AAA Cooper Transportation ("ACT") and MME, which together operated at an 85.9% Adjusted Operating Ratio during the quarter. Additionally, we expanded our network during the quarter by adding six LTL terminals, five in the Texas market and one in Las Vegas, which we will incorporate into the network in the coming quarters
Knight-Swift Transportation Delivers Results
Knight-Swift Transportation has been delivering results and that trend did not change in Q1. the company reported $1.83 billion in consolidated revenue for a gain of 50% over last year. The gains are driven by organic growth, expansion, and acquisitions and topped th consensus estimate by 400 basis points. All segments produced growth and wider margins led by an 86% increase in Intermodal revenue. LTL, Logistics, and Truckload all grew by more than 78%. On an ex-fuel surcharge basis, net revenue grew by 45.4%.
Moving down to the margin, the company’s operating margin increased by 610 basis points to 17.5% over last year aided by fuel surcharges but that is not the whole story. On an adjusted basis, the operating margin expanded by a lesser 90 basis points but it expanded and helped to drive YOY growth in earnings that outpaced the revenue growth. On the bottom line, the $1.25 in GAAP earnings is up from last year’s $0.77 or 62.3% while the adjusted $1.35 is also up 62% from last year and beat the consensus by $0.09.
Knight-Swift Delivers More Than Results
Knight-Swift Transportation has been using its capital and cash flow to expand the business but also to pay a healthy dividend and buy back shares. The dividend is worth about 1.0% in yield after the recent 20% hike and we see it getting increased again at the end of the year. The company has been increasing for the last 4 years and is only paying out about 9% of the consensus earnings estimate and that estimate is too low. The bottom line, Knight-Swift Transportation can be expected to return capital as well as grow and improve the business over the next few years.
The Technical Outlook: Knight-Swift Transportation Is At A Bottom
Shares of Knight-Swift corrected earlier this year but the institutions helped to put in a bottom. The bottom is at the $46 level and is consistent with a prior high. Price action is moving up from this level now and is supported by the indicators. The indicators suggest the stock is at an extreme low and ready for a bounce-back/rebound that could take the price action up to the $55 level or higher. Longer-term, this stock will advance to new highs driven by growth and multiple expansion.
Companies in This Article:
| Company | Current Price | Price Change | Dividend Yield | P/E Ratio | Consensus Rating | Consensus Price Target |
|---|
| Knight-Swift Transportation (KNX) | $51.13 | +0.8% | 1.41% | 57.62 | Moderate Buy | $53.29 |
Experience
Thomas Hughes has been a contributing writer for InsiderTrades.com since 2019.
- Professional Background: Thomas Hughes is the Managing Partner of Passive Market Intelligence LLC, a market research platform he launched in 2023 with the mission: “We watch the market so you don't have to.” He has worked as a blogger, stock market commentator, and independent analyst since 2010 and has been actively involved in trading and investing since 2005.
- Credentials: He holds an Associate of Arts in Culinary Technology—training that honed his discipline, attention to detail, and ability to anticipate outcomes, all of which carry over into his work as a market analyst.
- Finance Experience: Thomas has been writing about finance and investing since 2011, when he discovered it could be more than a personal passion—it could be a profession. He’s been a contributing writer for InsiderTrades.com since 2019.
- Writing Focus: He specializes in the S&P 500, small-cap stocks, dividend and high-yield strategies, consumer staples, retail, technology, oil, and cryptocurrencies. His analysis blends chart-based technical setups with key fundamental insights, helping readers identify actionable trends.
- Investment Approach: Thomas takes a hybrid approach that combines technical analysis with deep fundamental research. He often writes about macroeconomic shifts, earnings trends, and sentiment-based trading signals.
- Inspiration: Thomas first became interested in stocks after attending a seminar on how to buy and sell your own shares. That event opened his eyes to the market's potential and sparked a lifelong interest in investing.
- Fun Fact: Thomas took up model railroading by accident a few years ago—and now he can’t stop running the rails.
- Areas of Expertise: Technical and fundamental analysis, S&P 500, retail and consumer sectors, dividends, market trends
Education
Associate of Arts in Culinary Technology
