- If you are wondering whether Kirby's current share price truly reflects its underlying value, you are not alone. That is exactly what this article will unpack.
- With the stock at US$128.46 after a 2.8% gain over the last 7 days, a flat 0.2% move over 30 days, and returns of 14.8% year to date, 27.3% over 1 year, 76.4% over 3 years and 100.0% over 5 years, many investors are asking what is already priced in.
- Recent attention on Kirby has largely centered on its role in the U.S. marine transportation and services space, as investors reassess companies tied to industrial activity and energy related logistics. Broader sector news and sentiment around these themes help frame why the stock's longer term track record is in focus today.
- Our valuation model currently gives Kirby a score of 0 out of 6, which means it does not screen as undervalued on any of the checks we use. Next we will look at how different valuation approaches treat the stock and then finish with an even more complete way to think about value.
Kirby scores just 0/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.
Approach 1: Kirby Discounted Cash Flow (DCF) Analysis
A Discounted Cash Flow model projects a company’s future cash flows and then discounts them back to today’s terms to estimate what the business might be worth right now.
For Kirby, the model used is a 2 Stage Free Cash Flow to Equity approach. The company’s latest twelve month free cash flow is about $321.1 million, and Simply Wall St projects free cash flow of $337.2 million in 2024. Beyond the near term, the model extends out to 2035 using a series of estimates and extrapolations, all kept in dollar terms and discounted back to today.
Pulling these discounted cash flows together, the DCF model produces an estimated intrinsic value of US$84.60 per share. Compared with the current share price of US$128.46, this implies the stock screens as about 51.8% overvalued on this measure.
Result: OVERVALUED
Our Discounted Cash Flow (DCF) analysis suggests Kirby may be overvalued by 51.8%. Discover 56 high quality undervalued stocks or create your own screener to find better value opportunities.
Approach 2: Kirby Price vs Earnings
For a profitable company like Kirby, the P/E ratio is a straightforward way to relate what you pay for each share to the earnings the business is generating today. Investors usually accept a higher P/E when they expect stronger growth or see the earnings stream as relatively stable and lower risk, and a lower P/E when growth expectations or perceived risks pull that valuation down.
Kirby currently trades on a P/E of 19.44x. That sits above the Shipping industry average of 10.57x and also above the peer group average of 16.53x. Simply Wall St’s Fair Ratio framework estimates what a more tailored P/E might be for Kirby, given factors like its earnings growth profile, margins, size and risk, and arrives at 16.21x. This Fair Ratio is intended to be more company specific than a simple comparison with peers or the industry because it adjusts for Kirby’s own characteristics instead of assuming it should trade like the average shipping stock.
Comparing the Fair Ratio of 16.21x with the current 19.44x suggests Kirby’s shares are pricing in more optimism than this model supports.
Result: OVERVALUED
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Upgrade Your Decision Making: Choose your Kirby Narrative
Earlier we mentioned that there is an even better way to understand valuation. On Simply Wall St you can use Narratives, where you spell out your story for Kirby, link that story to specific forecasts for revenue, earnings and margins, and see what fair value those assumptions imply. You can then compare that to the current price to decide whether the stock looks attractive or expensive. The Narrative automatically updates as new earnings or news arrive. Different Kirby Narratives in the Community page already range from more cautious views that lean on risks in petrochemical demand and higher costs to more optimistic views that focus on vessel supply constraints, data center related demand and a Fair Value of about US$139.67.
Do you think there's more to the story for Kirby? Head over to our Community to see what others are saying!
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.
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