Knife River Corporation
KNF
$61.24
-0.91%
Knife River Corporation is a construction materials and contracting services company that provides crushed stone, sand, gravel, and related contracting services for infrastructure projects such as roads, bridges, and airport runways. As one of the largest providers of aggregates in the United States, it operates through four reportable segments: West, Mountain, Central, and Energy Services. The company is currently navigating a challenging demand environment, with recent price declines reflecting concerns about construction activity and margin pressures, while investors debate the impact of infrastructure spending and energy-related projects on future growth.…
KNF
Knife River Corporation
$61.24
KNF 12-Month Price Forecast
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Knife River Corporation's 12-month outlook, with a consensus price target around $92.67 and implied upside of +51.3% versus the current price.
Average Target
$92.67
0 analysts
Implied Upside
+51.3%
vs. current price
Analyst Count
—
covering this stock
Price Range
$73 - $118
Analyst target range
Analyst coverage is moderate, with 9 analysts covering the stock, and the consensus recommendation is 'buy' with a mean rating of 2.0 (where 1 is strong buy and 5 is sell). The average target price is $103.33, implying an upside of approximately 52.4% from the current price of $67.79. The target range is $81.00 to $119.00, with the low target still representing a 19.5% upside, indicating that even the most bearish analyst sees value. The high target of $119.00 suggests a potential 75.5% upside, reflecting optimism about the company's growth prospects. The wide spread between low and high targets indicates significant uncertainty, but the overall bullish sentiment is clear, with no sell ratings and a strong buy consensus.
Bulls vs Bears: KNF Investment Factors
The bull case is anchored by a strong analyst consensus (buy, average target $103.33) and a forward PE that implies significant earnings growth, while the bear case is driven by weak price momentum, thin margins, and a valuation that may still be rich. Currently, the bearish evidence is more compelling in the short term, as the stock is in a clear downtrend and has underperformed the market dramatically. The most important tension is whether the company can deliver the earnings growth implied by the forward PE (17.17x) despite margin pressures and a challenging construction demand environment. If earnings materialize as analysts expect, the stock is undervalued; if not, further downside is likely.
Bullish
- Analyst consensus strong buy: With 9 analysts covering, the consensus is 'buy' with a mean rating of 2.0 (1=strong buy, 5=sell). The average target price of $103.33 implies a 52.4% upside from the current price of $67.79, and even the low target of $81.00 offers a 19.5% upside, indicating that analysts see significant value.
- Forward PE discount signals growth: The trailing PE is 25.40x, but the forward PE is 17.17x, a 32% discount that implies the market expects substantial earnings growth. This is supported by estimated EPS of $6.21 for the current year, which would represent a significant increase from the most recent quarterly EPS of $0.039.
- Strong liquidity and moderate leverage: The current ratio of 2.54 indicates strong short-term liquidity, while the debt-to-equity ratio of 0.74 is moderate for a capital-intensive industry. This financial stability provides a cushion against economic downturns and supports the company's ability to fund growth initiatives.
- Infrastructure spending tailwinds: As a leading provider of aggregates and construction services, Knife River is well-positioned to benefit from increased infrastructure spending, including federal and state-funded projects. The company's four reportable segments (West, Mountain, Central, Energy Services) diversify its exposure across geographies and end markets.
Bearish
- Significant price decline and weak momentum: The stock has fallen 21.17% over the past year and 15.26% over the past six months, with a 1-month decline of 20.29%. It is trading near the lower end of its 52-week range (70.4% of the range), and relative strength is deeply negative (e.g., -43.75% vs. S&P 500 over 1 year), indicating persistent selling pressure.
- Thin margins and low profitability: Net margin is only 4.99% and gross margin is 18.35%, which are thin for the construction materials industry. The most recent quarterly EPS of $0.039 is very low, and operating margin of 9.08% suggests limited pricing power and high cost pressures.
- Valuation premium to industry: Despite the price decline, the trailing PE of 25.40x is above the market average, and the EV/EBITDA of 10.40x may be considered rich for a company with modest growth. The PEG ratio is negative (-1.14) due to expected earnings decline, which could signal overvaluation if growth disappoints.
- High short interest and negative sentiment: The short ratio of 5.33 indicates elevated short interest, reflecting bearish sentiment among investors. The stock's beta of 0.552 suggests it is less volatile than the market, but the recent price action shows it is highly sensitive to sector-specific headwinds.
KNF Technical Analysis
Knife River's stock has been in a pronounced downtrend over the past year, with a 1-year price change of -21.17% and a 6-month change of -15.26%. The current price of $67.79 sits near the lower end of its 52-week range, at approximately 70.4% of the range (calculated as (67.79-58.72)/(96.28-58.72)), indicating that the stock is closer to its 52-week low of $58.72 than its high of $96.28. This positioning suggests a bearish sentiment, with the stock trading below its historical midpoint and potentially offering value if the downtrend reverses, but also carrying the risk of further downside if support levels fail.
Beta
0.55
0.55x market volatility
Max Drawdown
-36.6%
Largest decline past year
52-Week Range
$59-$96
Price range past year
Annual Return
-23.5%
Cumulative gain past year
| Period | KNF Return | S&P 500 |
|---|---|---|
| 1m | -22.3% | +1.0% |
| 3m | -20.1% | +1.1% |
| 6m | -23.6% | +13.8% |
| 1y | -23.5% | +19.5% |
| ytd | -15.8% | +12.2% |
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KNF Fundamental Analysis
Knife River's revenue trajectory appears to be growing, with estimated revenue of $4.55 billion for the current year, but the company's profitability metrics show a net margin of 4.99% and a gross margin of 18.35%, which are relatively thin for the construction materials industry. The most recent quarterly EPS of $0.039 is low, indicating that earnings are modest, and the operating margin of 9.08% suggests that the company is able to generate some operating leverage. The balance sheet shows a debt-to-equity ratio of 0.74, which is moderate, and a current ratio of 2.54, indicating strong liquidity. The company's ROE of 9.57% and ROA of 5.08% are reasonable, but the free cash flow yield (implied by PCF of 14.32) suggests that cash generation is adequate to support operations and growth, though not exceptionally strong.
Quarterly Revenue
N/A
N/A
Revenue YoY Growth
N/A
YoY Comparison
Gross Margin
N/A
Latest Quarter
Free Cash Flow
N/A
Last 12 Months
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Valuation Analysis: Is KNF Overvalued?
Given that Knife River has positive net income, the primary valuation metric selected is the PE ratio. The trailing PE is 25.40x, while the forward PE is 17.17x, indicating that the market expects earnings growth, as the forward multiple is significantly lower. The PS ratio of 1.27x and EV/Sales of 1.86x provide additional context, with the EV/EBITDA of 10.40x suggesting a reasonable valuation relative to cash earnings. Compared to the industry average (not provided), the stock's valuation appears to be at a premium, but the forward PE discount to trailing PE implies that growth is expected. Historically, the stock's valuation metrics are not available, but the current PE is below the market average, suggesting that the stock may be undervalued relative to its growth prospects.
PE
25.4x
Latest Quarter
vs. Historical
N/A
5-Year PE Range 17x~59x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
10.4x
Enterprise Value Multiple
Investment Risk Disclosure
Financial and operational risks are significant. The company's net margin of 4.99% and gross margin of 18.35% are thin, leaving little room for cost inflation or pricing pressure. The most recent quarterly EPS of $0.039 is extremely low, indicating that earnings are volatile and sensitive to project timing. With a debt-to-equity ratio of 0.74, the company carries moderate debt, which could become a burden if cash flows weaken. The current ratio of 2.54 provides liquidity, but the low free cash flow yield (PCF of 14.32) suggests that cash generation is not exceptionally strong, limiting the ability to service debt or invest in growth during downturns.