With a $524.18 million market cap, Daseke, Inc. (DSKE) is the largest flatbed, specialized transportation and logistics solutions operating in North America. The company is a premier transportation solution specialist, offering best-in-class services to many of North America's most respected industrial shippers. Its services are tailored to service challenging industrial end markets. DSKE operates through two segments: Flatbed Solutions; and Specialized Solutions.
The stock has gained 13.1% in price over the past year, outperforming the benchmark S&P 500 index's 1.8% returns.
Increased investor attention to the shipping and logistics industry amid worsening global supply chain disruption has allowed DSKE to outperform benchmark indexes over the past year.
Here is what could shape DSKE's performance in the near term:
Impressive Growth Story
DSKE's revenues have increased at a 19% CAGR over the past five years, while its EBITDA rose at an 18.1% CAGR over this period. Over the past five years, the company's operating income and levered free cash flow rose at CAGRs of 50.2% and 6.6%, respectively. Furthermore, DSKE's EBIT has risen at a 39.7% CAGR over the past three years. The company's levered free cash flow has increased at a 26.1% CAGR over the past three years.
In addition, DSKE's trailing-12-month revenues rose 7.1% year-over-year. Its trailing-12-month EBITDA and net income improved 21.4% and 1265.9%, respectively, year-over-year.
Discounted Valuation
In terms of forward non-GAAP P/E, DSKE is currently trading at 6.55x, which is 62.2% lower than the 17.30x industry average. In addition, the stock's forward EV/Sales and Price/Sales multiples of 0.68 and 0.32, respectively, are significantly lower than the 1.71 and 1.35 industry averages. Also, DSKE's 4.89 forward EV/EBITDA ratio is 54.5% lower than the 10.76. industry average.
Furthermore, DSKE is currently trading at 3.61 times its trailing-12-month cash flows, which is 77.2% lower than the 15.83 industry average.
Bullish Growth Prospects
Analysts expect DSKE's revenues to rise 11.4% year-over-year to $372.07 million for its fiscal 2022 first quarter ended March 31, 2022. The $0.13 consensus EPS estimate for the about-to-be-reported quarter indicates a 200% improvement from the same period last year.
The Street expects DSKE's revenues to increase 5.8% year-over-year to $1.65 billion in its fiscal 2022 and 3.8% year-over-year to $1.71 billion in fiscal 2023. The company's EPS is expected to improve 48.1% from the same period last year in the current year and 7.9% year-over-year next year. Furthermore, analysts expect DSKE's EPS to improve at a 25% CAGR over the next five years.
Favorable POWR Ratings
DSKE has an overall B rating, which equates to Buy in our proprietary POWR Ratings system. The POWR Ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree.
The stock has a Growth grade of A and a Value grade of B. DSKE's remarkable growth story and discounted valuation versus its peers justify its Growth and Value grades.
Among the 22 stocks in the A-rated Trucking Freight industry, DSKE is ranked #2.
In addition to the grades I have highlighted above, view DSKE ratings for Momentum, Sentiment, Stability, and Quality here.
Note that DSKE is one of the few stocks handpicked by our Chief Growth Strategist, Jaimini Desai, currently in the POWR Stocks Under $10 portfolio. Learn more here.
Bottom Line
Given the resurgence of COVID-19 cases in China and subsequent lockdowns announced by the government, the global supply chain disruption is showing few signs of letting up. Experts believe that the recently announced lockdowns in China are expected to exacerbate the supply chain crisis this summer. As economies worldwide aim to boost their industrial production to recover from pandemic-era losses, the demand for DSKE's services is expected to rise significantly soon, boosting its financials. Thus, we think the stock could be an ideal investment bet now.
How Does Daseke, Inc. (DSKE) Stack Up Against its Peers?
While DSKE has a B rating in our proprietary rating system, one might want to consider looking at its industry peer P.A.M. Transportation Services, Inc. (PTSI), which has an A (Strong Buy) rating.
What To Do Next?
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DSKE shares were trading at $7.96 per share on Tuesday morning, down $0.39 (-4.67%). Year-to-date, DSKE has declined -20.72%, versus a -11.17% rise in the benchmark S&P 500 index during the same period.
About the Author: Aditi Ganguly
Aditi is an experienced content developer and financial writer who is passionate about helping investors understand the do’s and don'ts of investing. She has a keen interest in the stock market and has a fundamental approach when analyzing equities.
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