Forward Air Corporation (NASDAQ:FWRD), may not be a large-cap stock, but it has led NASDAQGS winners with a relatively large price rally over the past two weeks. With many analysts covering mid-cap stocks, we can expect any price-sensitive announcements to have already factored into the stock price. However, could the stock still trade at a relatively cheap price? Let’s take a closer look at Forward Air’s valuation and outlook to see if there’s still a bargain opportunity.

Check out our latest analysis for Forward Air

What is the opportunity at Forward Air?

Forward Air appears to be expensive according to my multiple price model, which compares the company’s price-earnings ratio to the industry average. In this case, I used the Price/Earnings (PE) ratio since there is not enough information to reliably predict the stock’s cash flow. I find Forward Air’s ratio of 32.97x to be above its average of 18.24x, suggesting the stock is trading at a higher price relative to the logistics industry. But is there another opportunity to buy cheap in the future? Since Forward Air’s share price is quite volatile, this could mean that it may fall (or rise even more) in the future, giving us another chance to invest. This is based on its high beta, which is a good indicator of how the stock is doing relative to the rest of the market.

What type of growth will Forward Air generate?

Future prospects are an important aspect when considering buying a stock, especially if you are an investor looking to grow your portfolio. Although value investors argue that it is intrinsic value relative to price that matters most, a more compelling investment thesis would be high growth potential at a cheap price. Forward Air’s earnings over the next few years are expected to increase by 76%, indicating a very optimistic future. This should lead to more robust cash flow, fueling higher share value.

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What does this mean to you :

Are you a shareholder? FWRD’s upbeat future growth appears to have been factored into the current share price, with the shares trading above industry price multiples. However, this raises another question: is this the right time to sell? If you think FWRD should be trading below its current price, selling at a high price and buying it back when its price falls towards the industry PE ratio can be profitable. But before making this decision, see if its fundamentals have changed.

Are you a potential investor? If you’ve been keeping tabs on FWRD for a while, now might not be the best time to get into the stock. The price has outpaced its industry peers, which means there are likely to be no more benefits from poor pricing. However, the optimistic outlook is encouraging for FWRD, which means that it is worth digging deeper into other factors in order to take advantage of the next price drop.

Keep in mind that when it comes to analyzing a stock, it is worth noting the risks involved. Example: we have identified 1 warning sign for Forward Air you should be aware.

If you are no longer interested in Forward Air, you can use our free platform to view our list of over 50 other stocks with high growth potential.

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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.