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    Does Slowing Growth And Margin Compression Change The Bull Case For Knight-Swift Transportation (KNX)?

    Simply Wall St·12/25/2025 07:32:59
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    • Knight-Swift Transportation’s recent update showed that its annualized revenue growth over the past two years slowed to 3.7%, while free cash flow margins and return on invested capital have both compressed compared with five years ago.
    • Together, the weaker growth and profitability metrics hint that Knight-Swift may be working through a tougher investment cycle, with fewer high-return projects and less cash available to deploy than in prior periods.
    • Next, we’ll examine how slowing revenue growth and pressure on free cash flow margins may reshape Knight-Swift’s existing freight recovery investment narrative.

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    Knight-Swift Transportation Holdings Investment Narrative Recap

    To own Knight-Swift, you need to believe its scale, LTL expansion and technology investments can translate a cyclical freight recovery into stronger, more durable cash generation. The latest figures, showing slower 3.7% annualized revenue growth and weaker free cash flow margins and ROIC, put more pressure on that near term earnings recovery story, while reinforcing the key risk that softer demand and pricing could keep returns subdued. Overall, the news does not reset the thesis but raises the bar on execution.

    The recent decision to lift the quarterly dividend to US$0.18 per share in early 2025, extending a multi year pattern of gradual increases, is the announcement that stands out most against this backdrop. It signals that, even with compressed margins and returns, Knight-Swift is still committing cash to shareholders, which sits in tension with the need to fund LTL integration, technology and capacity investments that underpin the freight recovery narrative.

    Yet investors should still be aware that if freight volumes stay soft and pricing power remains limited, Knight-Swift’s high fixed costs and LTL build out could...

    Read the full narrative on Knight-Swift Transportation Holdings (it's free!)

    Knight-Swift Transportation Holdings' narrative projects $8.7 billion revenue and $524.7 million earnings by 2028. This requires 5.3% yearly revenue growth and a roughly $360 million earnings increase from $164.8 million today.

    Uncover how Knight-Swift Transportation Holdings' forecasts yield a $56.37 fair value, a 5% upside to its current price.

    Exploring Other Perspectives

    KNX 1-Year Stock Price Chart
    KNX 1-Year Stock Price Chart

    Two Simply Wall St Community fair value estimates cluster between US$56.37 and US$66.05, underscoring how widely views on Knight-Swift’s upside can differ. Set against slowing revenue growth and compressed free cash flow margins, these contrasting perspectives invite you to weigh how much freight cycle risk you are comfortable owning.

    Explore 2 other fair value estimates on Knight-Swift Transportation Holdings - why the stock might be worth just $56.37!

    Build Your Own Knight-Swift Transportation Holdings Narrative

    Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

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    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.