The shares of Axalta Coating Systems Ltd. (NYSE:AXTA) and Knight Transportation, Inc. (NYSE:KNX) were among the active stocks of the last trading sessions. Axalta Coating Systems Ltd. (NYSE:AXTA) declined to -3.36% closing at the price of $25.86 whereas the shares of Knight Transportation, Inc. (NYSE:KNX) declined -3.06% with the decrease of -0.97 points closing at the price of $30.72. Axalta Coating Systems Ltd. has currently decrease -19.91% in its stock over the period of 6-months while its rival Knight Transportation, Inc. subtracted -28.46% in the previous 6-months.
Now we have to analyze the facts that if the stocks were worthy off investors’ money? The facts to analyze here are risks, profitability, returns and price trends.
Returns and Profitability
Profitability and returns are the main reason of investment, the investors are looking for profits that they get and return they should expect over the period of time.
The first and foremost return that is considered while making an investment is the ROI or Return on Investment. The ROI is the ratio between the profit against the cost of investment. Currently the ROI of Axalta Coating Systems Ltd. (NYSE:AXTA) is 5.9% while the ROI of Knight Transportation, Inc. (NYSE:KNX) is 2.1%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, AXTA’s EBITDA Margin is 11.52 whereas KNX’s is 8.75.
Both the profitability ratios suggest that Axalta Coating Systems Ltd. (NYSE:AXTA) is more suitable investment in terms of profitability and return.
EPS & Surprise Factor
Axalta Coating Systems Ltd. (NYSE:AXTA) reported $0.36/share EPS for the previous quarter where analysts were predicting an EPS to be $0.35/share Thus beating the analyst Estimates with a Surprise Factor of 2.9 Percent. While, Knight Transportation, Inc. (NYSE:KNX) reported EPS of $0.56/share in the last quarter. The analysts projected EPS of $0.57/share depicting a Surprise of -1.8 Percent.
Taking a look at Earnings per Share, Axalta Coating Systems Ltd. tends to be beating the analyst estimates more than Knight Transportation, Inc.. so AXTA is more profitable than KNX.
Technical Analysis of Axalta Coating Systems Ltd. & Knight Transportation, Inc.
Moving average convergence divergence (MACD) shows that Axalta Coating Systems Ltd. (NYSE:AXTA) is on a PRICE RELATIVITY trend While Knight Transportation, Inc. (NYSE:KNX) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Axalta Coating Systems Ltd. was in BEARISH territory and Knight Transportation, Inc. was in BEARISH territory.
AXTA’s current statistics gauge that the stock candle is BEARISH with HIGH volatility. While KNX’s candle is BEARISH with HIGH.
EPS Growth Rate: AXTA’s 12.58% versus KNX’s 27.16%
Another shareholder value can be analyzed through the EPS growth rate; the next 5 years EPS growth rate is predicted by the analysts after the analyzing the previous trends. The next 5 year EPS growth rate of Axalta Coating Systems Ltd. (NYSE:AXTA) is predicted at 12.58% while Knight Transportation, Inc. (NYSE:KNX) stands at 27.16%. These numbers suggest that KNX is more suitable investment in terms of EPS growth rate.
Financial Risk and Liquidity Concerns
The current ratio and the debt ratio are the two ratios that show the investor how quickly the company is able to payout its debt and how quickly it can cover its obligations. The current ratio of AXTA stands at 2.3 while KNX is at 1.5 whereas the debt ratio of the prior is 2.98 while the debt ratio of the later is 0.16.
The values of the both ratios suggest that AXTA is more suitable investment when the liquidity and risk is the main concern.
While making an investment, another main factor to consider before investing is the analyst recommendation on the scale of 1 to 5 where 1 is strong buy, 2 is buy, 3 is hold, 4 is Sell and 5 is strong sell. Analyst recommend 2.5 for AXTA and 1.9 for KNX which means AXTA has Hold rating whereas KNX has Buy rating.
Another recommendation of analyst that is to be considered worthy is the price target. The mare price or price trend does not suggest the suitability of a stock. The price target set by analyst is also to be considered while investing as it suggests to what extent the stock will rise or fall in the near future. The price target set for AXTA is $33.78 which is 23.45% of its current price while KNX has price target of 45.35 which is 32.26% of its current price.
Valuation is the process of determining the company’s worth for an investor, the valuation ratios give an insight to that worthiness.
AXTA currently has price to earning P/E ratio of 24.47 whereas KNX has 21.91 while the forward P/E ratio for the prior stands at 17.3 and for the later it depicts the value of 11.44.
The price to Book P/B for AXTA is 4.77, Price to Sale is at 1.34 and for KNX these ratios stand at 1.02 and 1.25.