Knight-Swift Transportation: It's Scary To Swim Where You Can't See The Bottom

I was concerned about being too bullish on Knight-Swift (NYSE:KNX) in my last article, as the company was heading into what I expected will be a significant correction in the trucking and logistics/shipping sector Those concerns have proved reasonable, as the shares have underperformed since then - losing about 13% of their value and underperforming Heartland (HTLD) and Werner (WERN), while outperforming J.B. Hunt (JBHT), Schneider (SNDR), and U.S. Xpress (USX).

My bullishness was based on the fact that while revenue, EBITDA, and cash flow would decline in FY'23, that decline would be cushioned by the diversification efforts undertaken by management and the overall quality of the business. I still think there's an argument for owning the shares, but I can't rule out even worse erosion in rates and sentiment, and there is a risk that buying Knight shares today is essentially reaching to grab a falling knife.

 

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Knight-Swift Transportation: It's Scary To Swim Where You Can't See The Bottom