Knight-Swift Transportation Holdings Inc. (KNX): what the price assumes
In the published model solve dated 2026-Q2, anchored at $68.94, Knight-Swift Transportation Holdings Inc. (KNX) is priced for +14.3% growth. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-06-27.
Generated: 2026-07-29 · Exported: 2026-08-01 · Source: https://boothcheck.com/report/KNX
Headline
| Field | Value |
|---|---|
| Ticker | KNX |
| Company | Knight-Swift Transportation Holdings Inc. |
| Current price | $68.94/sh |
| Composition | Truckload 65% / LTL 20% / Logistics 8% / Intermodal 5% / All Other Segments 4% / Eliminations -1% |
What The Price Assumes (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin (value-band context) | 2.9% |
| Operating margin (mid-cycle) | 8.7% |
| Margin compression (value-band) | -5.8pp |
| Trailing margin (depressed year) | 2.4% |
| Implied growth | 14.3% |
| Multiple paid | 21x mid-cycle operating income |
The operating-margin figure is value-band context at year 12: derived from the framework's value band, a separate calculation — not part of the priced-in solve.
Solve inputs: computed at a 8.7% cost of capital with 4% terminal growth over a 5-year stage; each 1pp of cost of capital moves the implied operating-profit growth ~7.1pp.
How unusual the bet is: within-range
| Reference | Value |
|---|---|
| vs own history | +0.06σ |
| cohort percentile (of 222 peers) | 50 |
| sustained it ~5 years at this level | 46% |
| implied end-window share | 0% |
Valuation X-Ray
The price is justified by relative-multiple and growth-DCF; asset-based/earnings-power land below the price.
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 4.82x | 1 | expensive |
| Earnings | 1.96x | 2 | expensive |
| Relative | 1.05x | 3 | expensive |
| Growth | 0.85x | 3 | justifies |
Families that justify the price: Relative, Growth Families that call it expensive: Asset, Earnings
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 8.0%); the inversion above states its own rate.
Per-Model Detail (n=9)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $104.66 | 0.66x | yes | FCF base $1.3B, growth 1% (input: historical growth), terminal g 1.1%, WACC 8.0%, 5yr projection |
| DCF Exit Multiple | Growth | $80.78 | 0.85x | yes | Exit EV/EBITDA: 11.6x / 13.6x / 15.6x (bear / base = today's held flat / bull), 5yr |
| Relative Valuation | Relative | $37.35 | 1.85x | yes | P/E 44x (blended: static sector reference 20x + trailing (TTM) 331x), scenarios: 37.1x / 44.0x / 50.9x (bear / base = reference held flat / bull), EV/EBITDA 13x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $2.25 | 30.64x | yes | BV/sh $43.24, ROE (TTM) 0.5%, ke 9.3% (excluded from median) |
| Two-Stage Excess Return | Asset | $1.16 | 59.43x | yes | 5yr excess ROE then converge to ke=9.3% (excluded from median) |
| Discounted Future Market Cap | Growth | $46.17 | 1.49x | yes | Rev $7.5B, growth 1% (input: historical growth; tapered), Terminal P/S: 1.3x / 1.5x / 1.7x (bear / base = today's held flat / bull, cap 8x) |
| Growth-Adjusted P/E | Relative | — | — | no | — |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $23.05 | 2.99x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $0.57B × (1−21%) / WACC 8.0% → EPV (no growth) |
| Residual Income | Asset | $0.82 | 84.07x | yes | BV $43.24 + 5yr PV of (ROE (TTM) 0.5% − Kₑ 9.3%) × BV; BV grows 0.3%/yr (excluded from median) |
| Graham Number | Asset | $14.29 | 4.82x | yes | √(22.5 × EPS $0.21 × BVPS $43.24) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $65.46 | 1.05x | yes | EBITDA $0.97B × sector EV/EBITDA 13.0x |
| FCF Yield | Earnings | $74.69 | 0.92x | yes | FCF $1299.8M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | — | — | no | — |
| Ben Graham Formula | Earnings | $0.18 | 383.00x | yes | EPS $0.21 × (8.5 + 2×-5.0%) × (4.4 / 5.3%) (excluded from median) |
| ROIC-Justified P/B | Asset | $1.37 | 50.32x | yes | BV $43.24 × (ROIC 0.3% / WACC 8.0%) (excluded from median) |
| P/Sales Sector | Relative | $91.89 | 0.75x | yes | Revenue $7.50B × sector P/S 2.0x |
| PEG Fair Value | Relative | — | — | no | — |
| Earnings Yield | Earnings | $2.27 | 30.37x | yes | EPS $0.21 / required return 9.3% (Rf 4.3% + ERP 5.0%) (excluded from median) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net debt | $2.1b |
| Net debt / NOPAT (after-tax) | 4.11x |
| Net debt / operating income (pre-tax) | 3.25x |
| Interest coverage | 4.3x |
| Share count CAGR (buyback) | -0.5% |
| Burning cash | no |
Leverage and coverage are computed on normalized mid-cycle operating income (mid-cycle margin 8.7%); the trailing year was depressed.
Bullet Takeaways
Knight-Swift is the largest US truckload carrier with a growing less-than-truckload network, and it is being valued through a deep freight recession: trailing operating margin near 2.4% and return on equity near 0.5% are cyclical troughs, not the steady state.
At $74.16 the price pays about 22x company-wide mid-cycle operating income, implying roughly 18% annual operating growth for five years. That is a bet on a freight-cycle recovery, and management guides 2026 adjusted EPS to $0.45 to $0.49 on improving margins.
The near-term results are noisy: Q1 2026 adjusted EPS of $0.09 missed on weather, fuel, an arbitration award, and adverse LTL claims. The moat is scale and density; the risk is the cycle and the leverage carried into it.
Bull Case
The competitive moat in trucking is scale and network density, and Knight-Swift has more of both than anyone in truckload. Density is the whole game: the more freight a carrier moves through the same lanes and terminals, the lower its cost per load and the better its service, which wins more freight in a self-reinforcing loop. The less-than-truckload leader frames the principle directly, its primary revenue focus is to increase density, shipment and tonnage, and it judges itself on the operating ratio, total operating expenses divided by revenue (ODFL FY2025 10-K, accession 0001193125-26-067161). Knight-Swift runs the largest truckload fleet in the country plus a fast-growing LTL business and an asset-light logistics brokerage that flexes capacity without owning trucks (KNX FY2025 10-K, accession 0001492691-26-000016). That diversified, scaled footprint is the structural advantage.
The key is to read the current numbers as a trough, not a baseline. The freight market has been in a multi-year recession, and Knight-Swift's trailing operating margin near 2.4% and return on equity near 0.5% are what a deeply cyclical carrier looks like at the bottom. The valuation engine recognizes this, pricing the company on its through-the-cycle margins, normalized operating income near $650 million on an 8.7% mid-cycle margin, rather than the depressed trailing quarter. When freight tightens, the operating leverage in trucking is enormous: a carrier with a low operating ratio at the bottom posts outsized margin expansion at the top, because the fixed cost of the fleet and terminals is already in place.
The recovery setup is concrete. Management guides 2026 adjusted EPS to $0.45 to $0.49, reflecting expected margin improvement, an active bid season targeting mid-to-high single-digit to double-digit price increases, and a progressively tighter truckload market. The LTL build-out is the secular growth layer on top of the truckload cycle, expanding into a market where pricing is more disciplined and margins are structurally higher. Against peers like Old Dominion, Saia, XPO, and Werner, Knight-Swift combines truckload scale with an LTL growth runway, and it has held its share count roughly flat. If the freight cycle turns as the bid season suggests, the earnings power that the normalized methods point to is real, and the stock is priced for that recovery to be partial at best.
Bear Case
The structural problem is the balance sheet meeting the cycle at the wrong time. Knight-Swift carries net debt near $2.1 billion, and at the trough that is more than 3x its mid-cycle operating income and a far larger multiple of the depressed trailing figure. Trucking is capital-intensive, a fleet of trucks and a network of terminals that must be financed and maintained whether or not freight is moving, so the fixed costs do not flex down when volumes fall. In a prolonged freight recession, that operating and financial leverage works in reverse: revenue softens, the operating ratio deteriorates, and interest expense keeps coming. Interest coverage near 4x is adequate today but thins quickly if the trough deepens or extends.
The Q1 2026 quarter showed how many ways a leveraged cyclical can disappoint at once. Adjusted EPS of $0.09 missed the $0.17 estimate, hit by severe weather and fuel costs, an unfavorable arbitration award that added $0.08 of claims cost, and an adverse Mexico VAT decision. More telling, adjusted operating income fell $37 million year over year partly on $18 million of adverse LTL claim development. Self-insurance and claims are a real, recurring risk for a large fleet, and adverse development can swing a quarter regardless of the freight environment. LTL shipments per day also fell 1%, a reminder that the secular growth story is not immune to the cycle.
The valuation is what makes the structural risk acute. At $74.16 (June 27, 2026) the price embeds roughly 18% annual operating growth for five years off the normalized base, and the static methods that value the company on its current earnings are damning: simple excess return near $2, residual income near $1, the Graham Number near $14, all a tiny fraction of the price, because trailing return on equity is barely positive. Those are trough artifacts, but their distance from the price shows how much the valuation depends on the recovery arriving on schedule. The recovery has been called for several bid seasons already and has repeatedly slipped. Pay 22x mid-cycle earnings for a leveraged, claims-exposed, deeply cyclical carrier and you are underwriting a freight upturn that the market has been waiting on for years. If it slips again, the leverage and the trough earnings leave little cushion.
Valuation
Knight-Swift must be valued on normalized, mid-cycle earnings, because the trailing numbers are a freight-recession trough. The EDGAR trailing operating income reads far below the record basis, a divergence the engine flags explicitly, so the inversion prices the company on its through-the-cycle margins, normalized operating income near $650 million on an 8.7% mid-cycle margin, rather than the depressed quarter. On that basis the market pays about 22x company-wide mid-cycle operating income, implying roughly 18% annual operating growth for five years at a 9% cost of capital. The engine notes only about 40% of comparable companies sustained that pace, and labels the overall priced-in assumption within range, a recovery bet that is demanding but not implausible for a cyclical at the bottom.
The method families split exactly as a trough-cycle name does. The asset and earnings-power frames keyed to current depressed returns collapse, simple excess return near $2, residual income near $1, earnings yield near $2, all artifacts of a barely-positive trailing return on equity, not real valuations. The growth and relative frames that capitalize normalized cash flow run high, DCF perpetual growth near $103, the DCF exit multiple near $84, FCF yield near $75 right at the price, EV/EBITDA at the sector multiple near $65.
The honest synthesis is that Knight-Swift is fairly valued to slightly rich on normalized earnings, and the entire case turns on the freight recovery. On the mid-cycle base the methods broadly support the price, with FCF yield landing essentially at it; on the current trough earnings the stock looks expensive. With net debt near $2.1 billion at roughly 3x mid-cycle operating income, the balance sheet limits the margin for error if the upturn slips again. This is a cyclical-recovery valuation, not a discount to intrinsic worth.
Catalysts
Q1 2026 (reported April 2026) missed: adjusted EPS of $0.09 against a $0.17 estimate, on revenue up 1.4% to $1,850 million. The quarter was weighed down by severe weather and fuel costs of roughly $0.05 to $0.06 per share, an unfavorable arbitration award adding $0.08 of claims cost, and an adverse Mexico VAT decision of $0.02. Adjusted operating income fell $37 million year over year, partly on $18 million of adverse LTL claim development, and LTL shipments per day declined 1%. The next prints test whether margins inflect off the trough.
The recovery thesis hinges on pricing and the freight cycle. Management guides full-year 2026 adjusted EPS to $0.45 to $0.49, reflecting expected margin improvement, an active bid season targeting mid-to-high single-digit to double-digit price increases, and a progressively tighter truckload market. Whether those contract rate increases materialize, and whether truckload capacity continues to tighten, are the central catalysts. The LTL expansion is the parallel secular driver to watch.
The swing factors over the next 90 days are spot and contract truckload rates as the freight-cycle tell, LTL shipment and yield trends, claims and insurance development given the Q1 hit, and fuel costs. Net debt near $2.1 billion and the dividend are the balance-sheet signals; any further deterioration in the freight market would pressure both the earnings recovery and the leverage at once.
Sources: Investing.com (KNX Q1 2026 slides and transcript), Quiver Quantitative (Q1 2026 earnings), SEC 8-K earnings releases, AOL and The Motley Fool (Q1 2026 transcript).
Peer Cohorts (Per Segment, With Filing Citations)
Truckload / LTL / Intermodal (reported)
- ODFL (OLD DOMINION FREIGHT LINE, INC.)
- FY2025 10-K: …drayage, truckload brokerage and supply chain consulting. More than 98% of our revenue has historically been derived from transporting LTL shipments for our customers, whose demand for our services is generally tied to industrial production and the overall health of the U.S. domestic economy. We have increased our…
- FY2025 10-K: . Our service centers are strategically located throughout the country so that we can provide the highest quality service and minimize freight rehandling costs. Although we have established primary responsibility for customer service at the local service center level, our customers may access information and initiate…
- SAIA (Saia, Inc.)
- FY2025 10-K: …analytics for operational and profitability insights, customer service enhancements, training and streamlined business processes. In 2025, Saia generated revenue of $3.2 billion and operating income of $352.2 million compared to revenue of $3.2 billion and operating income of $482.2 million in 2024. In 2025, the…
- FY2025 10-K: …in technology has become increasingly important in the LTL category largely due to the number of transactions and number of customers served on a daily basis. Saia LTL Freight picks up approximately 35,000 shipments per day, each of which has a shipper, a consignee and sometimes a third-party payor, all of whom need…
- XPO (XPO, Inc.)
- FY2025 10-K: U.S. market, estimated to be $53 billion in 2024. For the full year 2025, we moved approximately 16 billion pounds of freight through our network with a customer-focused organization of truck drivers, service center teams and sales professionals, facilitated by our proprietary technology. Our network serves…
- FY2025 10-K: …of the macroeconomic environment. Our trailer manufacturing facility and commercial truck driver schools are self-reliant competitive advantages for our company, particularly when industry conditions make it difficult to source equipment or drivers. This positions us to capture profitable market share gains and drive…
- ARCB (ARCBEST CORPORATION)
- FY2025 10-K: …to obtain price increases from customers both during and following such periods. The pricing environment remains competitive, and we believe that Asset-Light pricing has stabilized at the bottom of the truckload market cycle. The impact of excess capacity in the truckload market continued during 2025; however,…
- FY2025 10-K: Corporation; the LTL segment of Knight-Swift Transportation Holdings Inc.; Old Dominion Freight Line, Inc.; Saia, Inc.; the U.S. LTL operating segment of TFI International Inc.; and the North American LTL segment of XPO, Inc. Our Asset-Based segment's U-Pack business also competes with self-move businesses that offer…
- WERN (WERNER ENTERPRISES, INC.)
- FY2025 10-K: 85 were company-operated and 315 were owned and operated by independent contractors. Our Werner Logistics segment operated an additional 27 drayage company trucks and 170 Final Mile delivery trucks at the end of 2025. We have historically grown organically, and more recently through a combination of organic growth and…
- FY2025 10-K: …industry. We have longer-term Dedicated customer contracts, most of which are two to five years in length (including some contracts with annual evergreen clauses) and generally may be terminated by either party typically upon a notice period following the expiration of the contract's first year. We typically…
Logistics (reported)
- SNDR (Schneider National, Inc.)
- FY2025 10-K: …from these transactions. Logistics Management Logistics Management revenues relate to our SCDM operating segment, which is included in our Logistics segment. Within this portfolio, the key service we provide to customers is management of freight shipping and/or storage. The "contracts" in our Logistics Management…
- FY2025 10-K: …and revenue in transit, consistent with how revenue is reported internally for segment purposes. (4) Calculated as segment operating expenses divided by segment revenues (excluding fuel surcharge) including revenue in transit and related expenses at the operating segment level. Intermodal revenues (excluding fuel…
- WERN (WERNER ENTERPRISES, INC.)
- FY2025 10-K: …69% of total operating revenues, Werner Logistics revenues accounted for 29% of total operating revenues, and the remaining 2% was recorded in non-reportable segments. Our Werner Logistics segment manages the transportation and logistics requirements for customers, providing customers with additional sources of truck…
- FY2025 10-K: …we operate in the truckload and logistics sectors of the transportation industry. In the truckload sector, we focus on transporting consumer nondurable products that generally ship more consistently throughout the year. In the logistics sector, besides managing transportation requirements for individual customers, we…
- ARCB (ARCBEST CORPORATION)
- FY2025 10-K: …in transporting these shipments. 8 Table of Contents Our Asset-Light segment primarily provides logistics services through the use of third-party vendors. We offer competitive pricing on these services based on market conditions, lane characteristics, equipment type, and service requirements, including through…
- FY2025 10-K: …market rebound of higher freight demand, as well as provide a more sustainable service offering by reducing "empty miles" (or the number of miles we move empty or near-empty equipment for repositioning purposes). Although we continually evaluate our business mix to ensure revenue optimization, any resulting increase…
- JBHT (J.B. HUNT TRANSPORT SERVICES, INC.)
- FY2025 10-K: 104,474 units at December 31, 2025. The containers and chassis are uniquely designed so that they may only be paired together for optimal productivity, which we feel creates an operational competitive advantage. At December 31, 2025, JBI also managed a fleet of 5,880 company-owned tractors and contracted 308…
- FY2025 10-K: …within other segments. By leveraging the J.B. Hunt brand, systems, and network, we provide a broader service offering to customers by providing flatbed, refrigerated, and expedited, as well as a variety of dry-van and intermodal solutions. Furthermore, we offer an online multimodal marketplace via J.B. Hunt 360 that…
- LSTR (LANDSTAR SYSTEM, INC.)
- FY2025 10-K: …which are provided and coordinated by the Company. The nature of the Company's business is such that a significant portion of its operating costs varies directly with revenue. Landstar markets its integrated transportation management solutions primarily through independent commission sales agents and exclusively…
- FY2025 10-K: …and geographic regions. The Company's top 100 customers accounted for approximately 46% of consolidated revenue during both fiscal years 2025 and 2024. Management believes that the Company's overall size, ecosystem of digital technologies and applications, geographic coverage, access to equipment and diverse service…
- ODFL (OLD DOMINION FREIGHT LINE, INC.)
- FY2025 10-K: …was deregulated in 1980. The largest 5 and 10 LTL motor carriers accounted for approximately 56% and 81%, respectively, of the domestic LTL market in 2024 according to information reported in Transport Topics . We believe consolidation in our industry will continue due to increased customer demand for transportation…
- FY2025 10-K: …technology. In addition, we provide greater geographic coverage than most of our regional competitors. Our diversified mix and scope of regional, inter-regional and national LTL service, combined with our value-added service offerings, enables us to provide our customers with a single source to meet their shipping…
- SAIA (Saia, Inc.)
- FY2025 10-K: …external market conditions could influence the amount and costs of letters of credit or surety bonds required under our insurance programs and thereby reduce capital available for future growth or adversely affect our financial condition, results of operations, liquidity and cash flows. We face risks related to our…
- FY2025 10-K: …analytics for operational and profitability insights, customer service enhancements, training and streamlined business processes. In 2025, Saia generated revenue of $3.2 billion and operating income of $352.2 million compared to revenue of $3.2 billion and operating income of $482.2 million in 2024. In 2025, the…
- ZTO (ZTO Express (Cayman) Inc.)
- FY2025 20-F: …fleets, as well as technology infrastructure and people, particularly talent in overall management, business operation and information technology. We expect our continued investments to further improve our parcel handling capacity, increase market penetration, and enhance customer services and operational efficiency.…
- FY2025 20-F: …featuring express delivery, less-than-truckload logistics, cross-border business, warehousing, aviation, commerce and more. For example, we provide less-than-truckload (LTL) logistics services with a focus on heavy cargo and international express delivery services in Southeast Asia, Africa and other regions. We also…
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.