On July 19, 2023, JB Hunt Transport Services Inc (JBHT, Financial) experienced a stock price change of 3.75%, bringing the price per share to $195.23. With a market capitalization of $20.2 billion, the company's financial metrics indicate that the stock is fairly valued, according to the GF Value. The GF Value, a unique indicator of a stock's intrinsic worth, is calculated based on historical trading multiples, an adjustment factor from GuruFocus, and estimates of future business performance.
JB Hunt Transport Services, one of North America's top surface transportation companies by revenue, conducts operations across several segments. These include intermodal delivery, dedicated trucking services, for-hire truckload, heavy goods final-mile delivery, and asset-light truck brokerage.
Understanding the GF Value
The GF Value of JB Hunt Transport Services Inc (JBHT, Financial) is currently at $209.29, indicating that the stock is fairly valued. This estimation is derived from historical trading multiples, past business growth, and future performance estimates. If a stock's price is significantly above the GF Value Line, it is overvalued and likely to yield poor future returns. Conversely, if it is significantly below the GF Value Line, its future returns are likely to be higher. In the case of JB Hunt Transport Services, the current price aligns with the GF Value, suggesting that the long-term return of its stock is likely to align with the rate of its business growth.
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Financial Strength
Investing in companies with poor financial strength can lead to a higher risk of permanent loss of capital. A careful review of a company's financial strength, including its cash-to-debt ratio and interest coverage, is crucial before deciding to buy its stock. With a cash-to-debt ratio of 0.04, JB Hunt Transport Services ranks lower than 94.36% of companies in the Transportation industry. However, GuruFocus ranks the overall financial strength of JB Hunt Transport Services at 7 out of 10, indicating fair financial strength.
Profitability
Investing in profitable companies, especially those with consistent profitability over the long term, is typically less risky. With an operating margin of 8.76%, JB Hunt Transport Services ranks better than 54.07% of companies in the Transportation industry. Over the past twelve months, the company had a revenue of $13.9 billion and EPS of $8.19. The profitability of JB Hunt Transport Services is ranked 9 out of 10, indicating strong profitability.
Growth
Growth is a critical factor in a company's valuation. A faster-growing company creates more value for shareholders, especially if the growth is profitable. JB Hunt Transport Services has a 3-year average annual revenue growth of 18.5%, ranking better than 78.81% of companies in the Transportation industry. Its 3-year average EBITDA growth rate is 18.1%, ranking better than 64.63% of companies in the Transportation industry.
ROIC vs. WACC
Comparing a company's return on invested capital (ROIC) to its weighted cost of capital (WACC) is another way to evaluate its profitability. Over the past 12 months, JB Hunt Transport Services’s ROIC was 16.41, while its WACC came in at 10.99. If the ROIC is higher than the WACC, it indicates that the company is creating value for shareholders.
Conclusion
Overall, JB Hunt Transport Services Inc (JBHT, Financial) stock appears to be fairly valued. The company's financial condition is fair, and its profitability is strong. Its growth ranks better than 64.63% of companies in the Transportation industry. To learn more about JB Hunt Transport Services stock, you can check out its 30-Year Financials here.
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