The price target downgrade comes after the company reduced its earnings per share estimates for 2015 fourth quarter to a range of 31 cents to 33 cents yesterday afternoon, compared to its prior estimates of 36 cents to 38 cents.
Credit Suisse also lowered its earnings per share estimates for fiscal year 2015 to $1.44 from $1.49.
"The downward revision was led primarily by weaker-than-expected revenue per total mile trends (which accounted for $0.03 to $0.04 of the cut) as excess capacity and significantly less year over year spot activity have dampened sequential yield trends relative to initial expectations," the firm said in an analyst note.
Knight Transportation is a Phoenix, AZ-based provider of truckload transportation and logistics services.
Shares of Knight Transportation are down by 10.20% to $22.01 in pre-market trading on Friday.
Separately, recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate KNIGHT TRANSPORTATION INC as a Buy with a ratings score of B. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth, compelling growth in net income and good cash flow from operations. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 9.7%. Since the same quarter one year prior, revenues rose by 10.5%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- KNX's debt-to-equity ratio is very low at 0.17 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, KNX has a quick ratio of 1.51, which demonstrates the ability of the company to cover short-term liquidity needs.
- KNIGHT TRANSPORTATION INC has improved earnings per share by 19.4% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, KNIGHT TRANSPORTATION INC increased its bottom line by earning $1.25 versus $0.87 in the prior year. This year, the market expects an improvement in earnings ($1.48 versus $1.25).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Road & Rail industry. The net income increased by 20.6% when compared to the same quarter one year prior, going from $25.10 million to $30.28 million.
- Net operating cash flow has increased to $49.17 million or 25.39% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -5.64%.
- You can view the full analysis from the report here: KNX