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Today we're going to take a look at the well-established Old Dominion Freight Line, Inc. (NASDAQ:ODFL). The company's stock received a lot of attention from a substantial price movement on the NASDAQGS over the last few months, increasing to US$209 at one point, and dropping to the lows of US$161. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Old Dominion Freight Line's current trading price of US$165 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Old Dominion Freight Line’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
What's The Opportunity In Old Dominion Freight Line?
According to our valuation model, Old Dominion Freight Line seems to be fairly priced at around 4.96% above our intrinsic value, which means if you buy Old Dominion Freight Line today, you’d be paying a relatively reasonable price for it. And if you believe the company’s true value is $157.41, then there isn’t really any room for the share price grow beyond what it’s currently trading. Although, there may be an opportunity to buy in the future. This is because Old Dominion Freight Line’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.
Check out our latest analysis for Old Dominion Freight Line
What does the future of Old Dominion Freight Line look like?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. Old Dominion Freight Line's earnings over the next few years are expected to increase by 32%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.
What This Means For You
Are you a shareholder? ODFL’s optimistic 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 financial strength of the company. 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?