Intrinsic value of Knight-Swift Transportation Holdings Cl - KNX

Previous Close

$37.98

  Intrinsic Value

$2.05

stock screener

  Rating & Target

str. sell

-95%

Previous close

$37.98

 
Intrinsic value

$2.05

 
Up/down potential

-95%

 
Rating

str. sell

We calculate the intrinsic value of KNX stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2017), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 4.2

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046
   2047

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  60.00
  54.50
  49.55
  45.10
  41.09
  37.48
  34.23
  31.31
  28.68
  26.31
  24.18
  22.26
  20.53
  18.98
  17.58
  16.32
  15.19
  14.17
  13.26
  12.43
  11.69
  11.02
  10.42
  9.87
  9.39
  8.95
  8.55
  8.20
  7.88
  7.59
Revenue, $m
  3,880
  5,995
  8,965
  13,008
  18,352
  25,230
  33,866
  44,468
  57,219
  72,272
  89,746
  109,723
  132,253
  157,355
  185,021
  215,224
  247,920
  283,057
  320,577
  360,423
  402,545
  446,897
  493,447
  542,173
  593,068
  646,138
  701,406
  758,909
  818,699
  880,843
Variable operating expenses, $m
  3,104
  4,560
  6,605
  9,388
  13,068
  17,803
  23,749
  31,048
  39,827
  50,191
  61,789
  75,543
  91,054
  108,336
  127,384
  148,179
  170,689
  194,880
  220,712
  248,146
  277,146
  307,682
  339,731
  373,278
  408,318
  444,856
  482,907
  522,497
  563,662
  606,447
Fixed operating expenses, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  3,104
  4,560
  6,605
  9,388
  13,068
  17,803
  23,749
  31,048
  39,827
  50,191
  61,789
  75,543
  91,054
  108,336
  127,384
  148,179
  170,689
  194,880
  220,712
  248,146
  277,146
  307,682
  339,731
  373,278
  408,318
  444,856
  482,907
  522,497
  563,662
  606,447
Operating income, $m
  776
  1,435
  2,360
  3,619
  5,284
  7,427
  10,117
  13,419
  17,392
  22,081
  27,957
  34,180
  41,199
  49,018
  57,637
  67,046
  77,231
  88,177
  99,865
  112,277
  125,399
  139,215
  153,716
  168,895
  184,750
  201,282
  218,499
  236,412
  255,037
  274,396
EBITDA, $m
  1,814
  2,803
  4,191
  6,081
  8,580
  11,795
  15,833
  20,789
  26,751
  33,788
  41,958
  51,297
  61,830
  73,566
  86,500
  100,621
  115,907
  132,333
  149,874
  168,503
  188,196
  208,931
  230,694
  253,474
  277,268
  302,080
  327,918
  354,802
  382,755
  411,808
Interest expense (income), $m
  0
  52
  131
  246
  408
  627
  918
  1,291
  1,761
  2,337
  3,030
  3,848
  4,797
  5,883
  7,107
  8,471
  9,975
  11,616
  13,393
  15,302
  17,341
  19,506
  21,795
  24,206
  26,735
  29,383
  32,149
  35,033
  38,036
  41,161
  44,410
Earnings before tax, $m
  723
  1,303
  2,114
  3,212
  4,657
  6,509
  8,825
  11,659
  15,055
  19,051
  24,109
  29,383
  35,316
  41,911
  49,166
  57,071
  65,615
  74,784
  84,562
  94,936
  105,893
  117,420
  129,511
  142,160
  155,367
  169,133
  183,466
  198,376
  213,877
  229,986
Tax expense, $m
  195
  352
  571
  867
  1,257
  1,757
  2,383
  3,148
  4,065
  5,144
  6,510
  7,933
  9,535
  11,316
  13,275
  15,409
  17,716
  20,192
  22,832
  25,633
  28,591
  31,703
  34,968
  38,383
  41,949
  45,666
  49,536
  53,562
  57,747
  62,096
Net income, $m
  528
  951
  1,543
  2,344
  3,399
  4,751
  6,443
  8,511
  10,990
  13,907
  17,600
  21,450
  25,781
  30,595
  35,891
  41,662
  47,899
  54,592
  61,731
  69,304
  77,302
  85,717
  94,543
  103,777
  113,418
  123,467
  133,930
  144,814
  156,130
  167,890

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  12,278
  18,970
  28,370
  41,163
  58,076
  79,841
  107,170
  140,720
  181,073
  228,710
  284,006
  347,224
  418,522
  497,959
  585,511
  681,090
  784,558
  895,749
  1,014,483
  1,140,580
  1,273,876
  1,414,232
  1,561,542
  1,715,738
  1,876,797
  2,044,741
  2,219,640
  2,401,612
  2,590,821
  2,787,479
Adjusted assets (=assets-cash), $m
  12,278
  18,970
  28,370
  41,163
  58,076
  79,841
  107,170
  140,720
  181,073
  228,710
  284,006
  347,224
  418,522
  497,959
  585,511
  681,090
  784,558
  895,749
  1,014,483
  1,140,580
  1,273,876
  1,414,232
  1,561,542
  1,715,738
  1,876,797
  2,044,741
  2,219,640
  2,401,612
  2,590,821
  2,787,479
Revenue / Adjusted assets
  0.316
  0.316
  0.316
  0.316
  0.316
  0.316
  0.316
  0.316
  0.316
  0.316
  0.316
  0.316
  0.316
  0.316
  0.316
  0.316
  0.316
  0.316
  0.316
  0.316
  0.316
  0.316
  0.316
  0.316
  0.316
  0.316
  0.316
  0.316
  0.316
  0.316
Average production assets, $m
  6,053
  9,352
  13,985
  20,292
  28,629
  39,358
  52,830
  69,370
  89,262
  112,745
  140,003
  171,168
  206,315
  245,474
  288,633
  335,750
  386,756
  441,569
  500,099
  562,260
  627,970
  697,160
  769,778
  845,790
  925,186
  1,007,976
  1,094,194
  1,183,899
  1,277,171
  1,374,115
Working capital, $m
  -194
  -300
  -448
  -650
  -918
  -1,261
  -1,693
  -2,223
  -2,861
  -3,614
  -4,487
  -5,486
  -6,613
  -7,868
  -9,251
  -10,761
  -12,396
  -14,153
  -16,029
  -18,021
  -20,127
  -22,345
  -24,672
  -27,109
  -29,653
  -32,307
  -35,070
  -37,945
  -40,935
  -44,042
Total debt, $m
  2,430
  4,558
  7,547
  11,615
  16,994
  23,915
  32,605
  43,275
  56,107
  71,255
  88,839
  108,943
  131,615
  156,876
  184,718
  215,112
  248,015
  283,374
  321,131
  361,230
  403,618
  448,251
  495,096
  544,130
  595,347
  648,753
  704,371
  762,238
  822,406
  884,944
Total liabilities, $m
  3,905
  6,033
  9,022
  13,090
  18,468
  25,389
  34,080
  44,749
  57,581
  72,730
  90,314
  110,417
  133,090
  158,351
  186,192
  216,587
  249,490
  284,848
  322,606
  362,704
  405,093
  449,726
  496,570
  545,605
  596,822
  650,228
  705,846
  763,713
  823,881
  886,418
Total equity, $m
  8,374
  12,938
  19,348
  28,073
  39,608
  54,451
  73,090
  95,971
  123,492
  155,980
  193,692
  236,807
  285,432
  339,608
  399,318
  464,503
  535,069
  610,901
  691,877
  777,875
  868,783
  964,506
  1,064,972
  1,170,134
  1,279,976
  1,394,514
  1,513,795
  1,637,899
  1,766,940
  1,901,060
Total liabilities and equity, $m
  12,279
  18,971
  28,370
  41,163
  58,076
  79,840
  107,170
  140,720
  181,073
  228,710
  284,006
  347,224
  418,522
  497,959
  585,510
  681,090
  784,559
  895,749
  1,014,483
  1,140,579
  1,273,876
  1,414,232
  1,561,542
  1,715,739
  1,876,798
  2,044,742
  2,219,641
  2,401,612
  2,590,821
  2,787,478
Debt-to-equity ratio
  0.290
  0.350
  0.390
  0.410
  0.430
  0.440
  0.450
  0.450
  0.450
  0.460
  0.460
  0.460
  0.460
  0.460
  0.460
  0.460
  0.460
  0.460
  0.460
  0.460
  0.460
  0.460
  0.460
  0.470
  0.470
  0.470
  0.470
  0.470
  0.470
  0.470
Adjusted equity ratio
  0.682
  0.682
  0.682
  0.682
  0.682
  0.682
  0.682
  0.682
  0.682
  0.682
  0.682
  0.682
  0.682
  0.682
  0.682
  0.682
  0.682
  0.682
  0.682
  0.682
  0.682
  0.682
  0.682
  0.682
  0.682
  0.682
  0.682
  0.682
  0.682
  0.682

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  528
  951
  1,543
  2,344
  3,399
  4,751
  6,443
  8,511
  10,990
  13,907
  17,600
  21,450
  25,781
  30,595
  35,891
  41,662
  47,899
  54,592
  61,731
  69,304
  77,302
  85,717
  94,543
  103,777
  113,418
  123,467
  133,930
  144,814
  156,130
  167,890
Depreciation, amort., depletion, $m
  1,038
  1,368
  1,831
  2,462
  3,296
  4,369
  5,716
  7,370
  9,359
  11,707
  14,000
  17,117
  20,631
  24,547
  28,863
  33,575
  38,676
  44,157
  50,010
  56,226
  62,797
  69,716
  76,978
  84,579
  92,519
  100,798
  109,419
  118,390
  127,717
  137,412
Funds from operations, $m
  1,566
  2,319
  3,374
  4,807
  6,695
  9,120
  12,158
  15,881
  20,349
  25,615
  31,600
  38,566
  46,412
  55,143
  64,754
  75,237
  86,575
  98,749
  111,740
  125,530
  140,099
  155,433
  171,521
  188,356
  205,936
  224,265
  243,350
  263,204
  283,847
  305,302
Change in working capital, $m
  -73
  -106
  -149
  -202
  -267
  -344
  -432
  -530
  -638
  -753
  -874
  -999
  -1,127
  -1,255
  -1,383
  -1,510
  -1,635
  -1,757
  -1,876
  -1,992
  -2,106
  -2,218
  -2,327
  -2,436
  -2,545
  -2,654
  -2,763
  -2,875
  -2,990
  -3,107
Cash from operations, $m
  1,639
  2,425
  3,523
  5,009
  6,962
  9,464
  12,590
  16,411
  20,987
  26,367
  32,474
  39,565
  47,539
  56,398
  66,138
  76,747
  88,209
  100,506
  113,616
  127,522
  142,205
  157,650
  173,848
  190,792
  208,481
  226,918
  246,113
  266,079
  286,837
  308,409
Maintenance CAPEX, $m
  -378
  -605
  -935
  -1,399
  -2,029
  -2,863
  -3,936
  -5,283
  -6,937
  -8,926
  -11,274
  -14,000
  -17,117
  -20,631
  -24,547
  -28,863
  -33,575
  -38,676
  -44,157
  -50,010
  -56,226
  -62,797
  -69,716
  -76,978
  -84,579
  -92,519
  -100,798
  -109,419
  -118,390
  -127,717
New CAPEX, $m
  -2,270
  -3,299
  -4,634
  -6,307
  -8,337
  -10,729
  -13,472
  -16,539
  -19,892
  -23,483
  -27,259
  -31,164
  -35,147
  -39,159
  -43,160
  -47,117
  -51,006
  -54,813
  -58,531
  -62,161
  -65,710
  -69,190
  -72,618
  -76,013
  -79,396
  -82,790
  -86,218
  -89,705
  -93,272
  -96,945
Cash from investing activities, $m
  -2,648
  -3,904
  -5,569
  -7,706
  -10,366
  -13,592
  -17,408
  -21,822
  -26,829
  -32,409
  -38,533
  -45,164
  -52,264
  -59,790
  -67,707
  -75,980
  -84,581
  -93,489
  -102,688
  -112,171
  -121,936
  -131,987
  -142,334
  -152,991
  -163,975
  -175,309
  -187,016
  -199,124
  -211,662
  -224,662
Free cash flow, $m
  -1,009
  -1,479
  -2,046
  -2,696
  -3,404
  -4,128
  -4,818
  -5,411
  -5,842
  -6,042
  -6,059
  -5,599
  -4,725
  -3,393
  -1,569
  767
  3,628
  7,017
  10,929
  15,351
  20,269
  25,663
  31,514
  37,802
  44,506
  51,610
  59,097
  66,955
  75,174
  83,747
Issuance/(repayment) of debt, $m
  1,459
  2,128
  2,989
  4,068
  5,378
  6,921
  8,691
  10,669
  12,832
  15,149
  17,584
  20,103
  22,673
  25,261
  27,842
  30,394
  32,903
  35,359
  37,757
  40,099
  42,388
  44,633
  46,845
  49,034
  51,217
  53,406
  55,618
  57,867
  60,168
  62,537
Issuance/(repurchase) of shares, $m
  2,608
  3,612
  4,868
  6,381
  8,135
  10,092
  12,196
  14,371
  16,530
  18,581
  20,112
  21,665
  22,844
  23,581
  23,820
  23,523
  22,667
  21,240
  19,246
  16,695
  13,607
  10,006
  5,922
  1,385
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  4,067
  5,740
  7,857
  10,449
  13,513
  17,013
  20,887
  25,040
  29,362
  33,730
  37,696
  41,768
  45,517
  48,842
  51,662
  53,917
  55,570
  56,599
  57,003
  56,794
  55,995
  54,639
  52,767
  50,419
  51,217
  53,406
  55,618
  57,867
  60,168
  62,537
Total cash flow (excl. dividends), $m
  3,058
  4,262
  5,811
  7,752
  10,109
  12,885
  16,069
  19,629
  23,520
  27,688
  31,637
  36,170
  40,792
  45,449
  50,092
  54,684
  59,198
  63,616
  67,932
  72,145
  76,264
  80,303
  84,281
  88,221
  95,723
  105,016
  114,715
  124,822
  135,343
  146,284
Retained Cash Flow (-), $m
  -3,136
  -4,564
  -6,411
  -8,725
  -11,534
  -14,844
  -18,638
  -22,882
  -27,520
  -32,488
  -37,712
  -43,115
  -48,625
  -54,176
  -59,711
  -65,185
  -70,566
  -75,832
  -80,976
  -85,998
  -90,908
  -95,723
  -100,465
  -105,162
  -109,842
  -114,538
  -119,281
  -124,104
  -129,040
  -134,121
Prev. year cash balance distribution, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  7
  12
  18
  27
  39
  55
  76
  102
  133
  172
  217
  269
  329
  397
  472
  555
  646
  744
  849
  962
  1,081
  1,208
  1,341
  1,480
  1,627
  1,779
  1,938
  2,104
  2,277
  2,456
Cash available for distribution, $m
  -78
  -302
  -600
  -973
  -1,425
  -1,958
  -2,570
  -3,253
  -4,000
  -4,801
  -6,075
  -6,945
  -7,833
  -8,727
  -9,619
  -10,501
  -11,367
  -12,216
  -13,045
  -13,854
  -14,644
  -15,420
  -16,184
  -16,941
  -14,119
  -9,522
  -4,566
  718
  6,302
  12,164
Discount rate, %
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
  -75
  -277
  -522
  -801
  -1,105
  -1,421
  -1,736
  -2,033
  -2,298
  -2,517
  -2,885
  -2,964
  -2,978
  -2,930
  -2,824
  -2,668
  -2,473
  -2,250
  -2,008
  -1,760
  -1,515
  -1,279
  -1,061
  -863
  -549
  -278
  -98
  11
  69
  92
Current shareholders' claim on cash, %
  61.8
  40.2
  27.4
  19.4
  14.3
  10.9
  8.5
  6.8
  5.6
  4.7
  4.1
  3.6
  3.2
  2.9
  2.7
  2.5
  2.3
  2.2
  2.2
  2.1
  2.0
  2.0
  2.0
  2.0
  2.0
  2.0
  2.0
  2.0
  2.0
  2.0

Knight Transportation, Inc. is a provider of multiple truckload transportation and logistics services, which involve the movement of trailer or container loads of freight from origin to destination for a single customer. The Company operates through two segments: Trucking and Logistics. Its Trucking segment consists of three operating units: dry van truckload, temperature-controlled truckload and drayage services. The Trucking segment provides truckload transportation, including services of various products, goods and materials. Its Logistics segment consists of two operating units: freight brokerage services and rail intermodal. It provides logistics, freight management and other non-trucking services to its customers, through its Logistics segment. It provides a range of truckload and logistics services through its nationwide network of service centers, truckload tractor fleets and its contractual access to third-party capacity providers. It operates primarily in the United States.

FINANCIAL RATIOS  of  Knight-Swift Transportation Holdings Cl (KNX)

Valuation Ratios
P/E Ratio 0
Price to Sales 0
Price to Book 0
Price to Tangible Book
Price to Cash Flow 0
Price to Free Cash Flow 0
Growth Rates
Sales Growth Rate -100%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate NaN%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
Financial Strength
Quick Ratio NaN
Current Ratio NaN
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets 0%
Ret/ On Assets - 3 Yr. Avg. 0%
Return On Total Capital 0%
Ret/ On T. Cap. - 3 Yr. Avg. 0%
Return On Equity 0%
Return On Equity - 3 Yr. Avg. 0%
Asset Turnover 0
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 0%
EBITDA Margin - 3 Yr. Avg. 0%
Operating Margin 0%
Oper. Margin - 3 Yr. Avg. 0%
Pre-Tax Margin 0%
Pre-Tax Margin - 3 Yr. Avg. 0%
Net Profit Margin 0%
Net Profit Margin - 3 Yr. Avg. 0%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

KNX stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the KNX stock intrinsic value calculation we used $2425 million for the last fiscal year's total revenue generated by Knight-Swift Transportation Holdings Cl . The default revenue input number comes from 2017 income statement of Knight-Swift Transportation Holdings Cl . You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our KNX stock valuation model: a) initial revenue growth rate of 60% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for KNX is calculated based on our internal credit rating of Knight-Swift Transportation Holdings Cl , is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Knight-Swift Transportation Holdings Cl .
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of KNX stock the variable cost ratio is equal to 86.7%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for KNX stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for Knight-Swift Transportation Holdings Cl .

Corporate tax rate of 27% is the nominal tax rate for Knight-Swift Transportation Holdings Cl . In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the KNX stock is equal to 0.3%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for KNX are equal to 156%.

Life of production assets of 10 years is the average useful life of capital assets used in Knight-Swift Transportation Holdings Cl operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for KNX is equal to -5%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $5238 million for Knight-Swift Transportation Holdings Cl - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 111 million for Knight-Swift Transportation Holdings Cl is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Knight-Swift Transportation Holdings Cl at the current share price and the inputted number of shares is $4.2 billion.

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COMPANY NEWS

▶ Knight-Swift Buys Trucker Abilene Motor Express   [Mar-16-18 01:57PM  The Wall Street Journal]
▶ Bull of the Day: Knight-Swift (KNX)   [Feb-09-18 07:00AM  Zacks]
▶ Knight-Swift Transportation Jumps 11% in January   [Feb-05-18 03:17PM  GuruFocus.com]
▶ Analyst: Knight-Swift Holds Upside Potential   [Nov-14-17 01:24PM  Benzinga]
▶ A Look at Truckload Carriers Capex in 2Q17   [Aug-29-17 10:37AM  Market Realist]
▶ Knight Transportation meets 2Q profit forecasts   [Jul-26-17 09:33PM  Associated Press]
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