As of July 19, 2023, JB Hunt Transport Services Inc (JBHT, Financial) has seen a 3.75% increase in its stock price, reaching $195.23. With a market cap of $20.2 billion and sales of $13.9 billion, the company's current GF Value stands at $209.29, suggesting that the stock is fairly valued. But what does this mean for potential investors? Let's delve into the company's financials and operations to gain a clearer understanding.
JB Hunt Transport Services ranks among North America's top surface transportation companies by revenue. Its primary operations are intermodal delivery, dedicated trucking services, for-hire truckload, heavy goods final-mile delivery, and asset-light truck brokerage. With such a diverse portfolio, it's crucial to assess the company's value accurately.
Understanding the GF Value of JB Hunt Transport Services (JBHT, Financial)
The GF Value is a unique metric calculated based on historical trading multiples, an adjustment factor from GuruFocus based on past performance and growth, and estimates of future business performance. The GF Value Line represents the fair value at which the stock should ideally be traded. According to GuruFocus Value calculation, JB Hunt Transport Services stock shows every sign of being fairly valued.
Given that the company is fairly valued, the long-term return of its stock is likely to be close to the rate of its business growth.
Assessing the Financial Strength of JB Hunt Transport Services (JBHT, Financial)
Investing in companies with robust financial strength reduces the risk of permanent loss. A key factor to consider is the cash-to-debt ratio, which provides insight into the company's financial resilience. JB Hunt Transport Services has a cash-to-debt ratio of 0.04, lower than 94.36% of companies in the Transportation industry. Nonetheless, with an overall financial strength score of 7 out of 10, JB Hunt Transport Services exhibits fair financial strength.
Profitability and Growth of JB Hunt Transport Services (JBHT, Financial)
Profitable companies, especially those with consistent profitability over the long term, are typically safer investments. JB Hunt Transport Services has been profitable for the past 10 years, with an operating margin of 8.76%, ranking better than 54.07% of companies in the Transportation industry. With a profitability rank of 9 out of 10, JB Hunt Transport Services demonstrates strong profitability.
Growth is a crucial factor in company valuation. The 3-year average annual revenue growth of JB Hunt Transport Services is 18.5%, ranking better than 78.81% of companies in the Transportation industry. The 3-year average EBITDA growth rate is 18.1%, ranking better than 64.63% of companies in the industry.
ROIC vs WACC: A Measure of Profitability
Comparing a company's return on invested capital (ROIC) to its weighted average cost of capital (WACC) is another way to assess profitability. JB Hunt Transport Services’ ROIC is 16.41, and its WACC is 10.99, indicating that the company is creating value for shareholders.
Conclusion
In conclusion, JB Hunt Transport Services (JBHT, Financial) stock appears to be fairly valued. The company's financial condition is fair, its profitability is strong, and its growth ranks better than 64.63% of companies in the Transportation industry. For a more detailed look at JB Hunt Transport Services' financials, visit its 30-Year Financials here.
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