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Key Takeaways:
- Knight-Swift delivered strong Q1 results with adjusted EPS of $0.28, up 133% year-over-year despite market headwinds.
- KNX stock achieved a 170 basis point improvement in truckload adjusted operating ratio to 95.6%, demonstrating operational efficiency gains.
- LTL revenue increased 26.7% year-over-year, driven by network expansion and a 24.2% growth in shipments.
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Valued at a market capitalization of $6.9 billion, Knight-Swift Transportation (KNX) operates as North America’s largest truckload carrier, providing comprehensive transportation and logistics services across truckload, less-than-truckload, logistics, and intermodal segments.
It has established itself as a leading player in the transportation industry through strategic acquisitions, operational excellence, and diversification across multiple service offerings while maintaining disciplined cost management and asset utilization.
The transportation stock has faced headwinds from industry-wide challenges but continues to demonstrate resilience through its diversified platform. Given its operational improvements and market position, KNX stock presents an attractive opportunity in June 2025.
Let’s explore why you might consider adding this mid-cap transportation stock to your equity portfolio today.
1. Knight-Swift Posts Strong Q1 Results
Knight-Swift delivered exceptional Q1 results that exceeded expectations across key operational metrics. Adjusted earnings per share reached $0.28, representing 133% year-over-year growth, while revenue excluding fuel surcharge increased 1.2% to $1.63 billion.
The company’s diversified platform demonstrated broad-based improvements, with adjusted operating income increasing 68.2% year-over-year to $86.6 million and the consolidated adjusted operating ratio improving 210 basis points to 94.7%.
Operating performance demonstrated substantial advancement across multiple segments. The truckload business achieved its first year-over-year increase in revenue per loaded mile in 10 quarters, while the LTL segment delivered impressive 26.7% revenue growth driven by network expansion and customer adoption.
The company’s strategic focus on operational efficiency yielded meaningful results. The cost per mile improved year-over-year for the third consecutive quarter, despite a decline in total miles, while miles per tractor increased by 0.8% through productivity initiatives and asset optimization.
U.S. Xpress reached a significant milestone by achieving its first quarterly operating profit since the July 2023 acquisition. This validated management’s integration strategy and demonstrated the potential for continued margin expansion across the combined platform.
Check out KNX’s full analyst estimates and growth forecast (It’s free) >>>
2. Knight-Swift Operates a Diversified Transportation Platform
Knight-Swift has differentiated itself through a comprehensive transportation network that spans multiple service offerings and geographic markets. The platform integrates truckload, LTL, logistics, and intermodal services to create a seamless transportation solution for customers.
Its LTL expansion strategy continues to drive meaningful growth opportunities. During the first quarter, Knight-Swift added seven new locations and over 200 doors, further expanding its substantial network established in 2024.
The widening footprint enables participation in larger customer bids and creates density advantages in key markets.
Strategic acquisitions have enhanced Knight-Swift’s service capabilities and market reach. The integration of U.S. Xpress has added scale and operational expertise, while the DHE acquisition expanded LTL network coverage in strategic Northeast markets.
The logistics segment leverages asset-light capabilities to complement the company’s asset-based operations. Power-only offerings and traditional brokerage services provide flexibility to serve customer needs while generating attractive returns on invested capital.
Technology investments continue to drive operational improvements across all segments. Enhanced routing optimization, maintenance scheduling, and safety management systems contribute to cost reduction and improvements in service quality.
3. KNX Stock Should Benefit From Competitive Advantages
Knight-Swift has achieved industry-leading operational efficiency metrics, providing sustainable competitive advantages in the transportation sector.
The company’s truckload segment delivered a 170 basis point improvement in adjusted operating ratio to 95.6%, representing 200 basis points of improvement in legacy operations and 100 basis points in U.S. Xpress.
This operational excellence stems from disciplined cost management, asset optimization, and technology-driven efficiency improvements.
Operational leverage offers potential for margin expansion as market conditions normalize. Its fixed cost base enables meaningful earnings growth when volumes and pricing recover, while the diversified platform reduces dependence on any single market segment.
Knight-Swift’s scale advantages create barriers to entry and pricing power with customers. Its nationwide network, comprehensive service offerings, and operational reliability position it as a preferred provider for large enterprise customers requiring consistent capacity and service quality.
The regulatory environment presents challenges and opportunities for Knight-Swift. While hours-of-service regulations and safety requirements increase compliance costs, these measures also create advantages for well-capitalized operators with strong safety records and operational infrastructure.
Knight-Swift maintains conservative guidance for the second quarter, with adjusted EPS expected to be between $0.30 and $0.38, reflecting uncertainty due to tariff policies and customer shipping patterns.
It expects continued sequential improvement in LTL operations and stable performance across other segments.
The balance sheet remains robust with strong cash generation and manageable debt levels. This financial flexibility enables strategic investments, equipment purchases, and potential acquisitions while maintaining dividend payments to shareholders.
Valuation Setup for KNX Stock
Analysts tracking KNX stock expect its sales to rise from $7.4 billion in 2024 to $8.8 billion in 2027, an annual increase of 6%. Comparatively, adjusted earnings are forecast to expand from $1.06 per share to $3.70 per share in this period.
KNX stock currently trades at a forward price-to-earnings multiple of 26x, which is below its 10-year average multiple of 19x.
If KNX stock is priced at a multiple of 16x and reaches its projected $3.70 in normalized EPS, it will trade around $60/share in early 2027, indicating an upside potential of almost 40% from current levels.
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Average Analyst Price Target for KNX Stock
Wall Street remains bullish on KNX stock, with a consensus price target of $51/share. Analysts expect the stock to rise around 20% from current levels over the next 18 months.
Notably, KNX stock currently has a high target price of $68 and a low target price of $42.
Of the 22 analysts tracking KNX stock, 12 recommend “Buys”, nine recommend “Hold”, and one recommends “Sell.”
TIKR Takeaway for KNX Stock
Knight-Swift Transportation represents a compelling investment opportunity in the transportation sector, combining operational excellence with strategic diversification across multiple service offerings.
Its strong first-quarter performance demonstrates management’s ability to drive margin expansion and earnings growth even in challenging market conditions. At the same time, the expanding LTL network creates additional long-term growth opportunities.
Knight-Swift’s proven operational capabilities, diversified platform, and strong balance sheet position KNX stock for continued outperformance as transportation markets normalize and demand patterns stabilize.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
