Knight-Swift Transportation (NYSE:KNX) Q3 2020 Earnings Preview

in EARNINGS/INVESTING IDEAS by

Knight-Swift Transportation Holdings Inc. (NYSE:KNX) is scheduled to report Q3 earnings results before markets open for trading on October 21, 2020.

The company is expected to report earnings of $0.64/share on revenue of $1.167 billion. The consensus earnings per share (EPS) of $0.64/share is based on a poll of 15 analysts and represents a growth in eps of 33.7% over the same quarter last year, when the company reported earnings of $0.48/share.

The revenue forecast of $1.167 billion based on a poll of 12 analysts implies a year-over-year (YoY) decline in revenue of −2.8%. Last year the company reported $1.201 billion in revenue for the quarter.

Expected to report EPS growth of 33.7% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $1,166.60 $1,200.52 −2.8%
EPS $0.64 $0.48 33.7%

Earnings Call Trends

Historically, management has exceeded analyst expectations 7 out of the last 8 tracked quarters, and met expectations 1 quarters.

What are your expectations from Knight-Swift Transportation Holdings Inc. for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $0.35 $0.57 61.1% Beat
Q1, 2020 $0.35 $0.44 24.2% Beat
Q4, 2019 $0.51 $0.55 7.5% Beat
Q3, 2019 $0.48 $0.48 1.0% Beat
Q2, 2019 $0.57 $0.58 1.0% Beat
Q1, 2019 $0.52 $0.55 6.0% Beat
Q4, 2018 $0.92 $0.93 1.5% Beat
Q3, 2018 $0.58 $0.65 11.9% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price did not react much to the update.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
July 22, 2020 $45.12 $45.56 1.0% Increase
April 22, 2020 $35.19 $35.32 0.4% Increase
January 29, 2020 $36.16 $38.03 5.2% Increase
October 23, 2019 $37.66 $37.70 0.1% Increase

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −2.90, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.90 implies a 0.2% chance of earnings manipulation.

Fundamentals And Technical Analysis

Knight-Swift Transportation Holdings Inc. is currently trading at $40.51/share, down −0.7% for the day. The company is trading at approximately 85.4% of its 52-week high of $47.44/share. The company’s stock price is down −11.1% since the last earnings report and up 0.4% over the previous week.

The company’s 14 Day Relative Price Index (RSI) of 39.84 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NYSE:KNX Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 23.97 and a forward P/E multiple of 17.94.

Knight-Swift Transportation Holdings Inc.’s current share price also implies a price-to-book (P/B) multiple of 1.20. The following table summarizes some other key fundamental ratios:

Data as of October 19, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $40.51
P/E Ratio 24.0x
P/E Ratio (Fwd) 17.9x
PEG Ratio −0.8
Total Debt / Total Capital 12.5%
Levered Free Cash Flow $85.696 million
EV / EBITDA 8.6x

Finbox

Knight-Swift Transportation Holdings Inc. is a mid-cap stock with a market capitalization of $6.943 billion and a total enterprise value of $7.821 billion. The company operates in the Industrials sector and the Road & Rail industry.

Knight-Swift Transportation Holdings Inc., together with its subsidiaries, provides truckload transportation services in the United States and Mexico. The company operates through three segments: Trucking, Logistics, and Intermodal. Its trucking services include irregular route, dedicated, refrigerated, flatbed, expedited, dry van, drayage, and cross-border transportation of various products, goods, and materials. The company also provides logistics and intermodal services, such as brokerage, intermodal, and certain logistics; freight management; and non-trucking services. In addition, it offers various support services, including repair and maintenance shop services, warranty, insurance, and equipment leasing; and trailer parts manufacturing services, as well as engages in the driving academy activities. The company operates a total of 18,877 tractors, which comprises 16,432 company-owned tractors and 2,445 independent contractor tractors, as well as 58,315 trailers; and 643 tractors and 9,862 intermodal containers. It serves retail, food and beverage, consumer products, paper products, transportation and logistics, housing and building, automotive, and manufacturing industries. Knight-Swift Transportation Holdings Inc. was founded in 1989 and is headquartered in Phoenix, Arizona.

Expertise: financial modeling, mergers & acquisitions. Andy is also a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to do investment research. Andy’s background is in investment banking where he led the analysis on over 50 board advisory engagements involving mergers and acquisitions, fairness opinions and solvency opinions. Some of his board advisory highlights: - Sears Holdings Corp.’s $620 mm spin-off via rights offering of Sears Outlet, Hometown Stores and Sears Hardware Stores. - Cerberus Capital Management’s $3.3 bn acquisition of SUPERVALU Inc.’s New Albertsons, Inc. assets. Andy can be reached at andy@finbox.io or at +1 (516) 778-6257.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.