What is USX's Intrinsic value?

US Xpress Enterprises Inc (USX) Intrinsic Value Analysis

Executive Summary

As of June 17, 2025, US Xpress Enterprises Inc's estimated intrinsic value ranges from $1.31 to $1.31 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Dividend Discount Model (Multi-Stage) $1.31 -78.7%

Is US Xpress Enterprises Inc (USX) undervalued or overvalued?

With the current market price at $6.14, the stock appears to be significantly overvalued.

Understanding Intrinsic Value

Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate US Xpress Enterprises Inc's intrinsic value, including:

  1. Dividend Discount Model (DDM): Values the company based on expected future dividend payments

Weighted Average Cost of Capital (WACC)

The cost of capital is a critical factor in valuation models, representing the required return for investors.

WACC Component Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 1.29 1.49
Cost of equity 9.8% 13.2%
Cost of debt 4.5% 7.0%
Tax rate 19.4% 22.8%
Debt/Equity ratio 1.47 1.47
After-tax WACC 6.1% 8.6%

Valuation Methods

2. Dividend Discount Model (DDM)

The DDM values a company based on its expected future dividend payments. We used two approaches:

Multi-Stage DDM:

  • Current payout ratio: 0.0%
  • Stable payout ratio: 90.0%
  • Growth transition: 5 years
  • Cost of equity: 11.5%
  • Long-term growth rate: 3.5%
  • Fair value: $1.31 (-78.7% from current price)

Stable DDM:

  • Stable payout ratio: 70% (Low) to 90% (High)
  • Cost of equity: 13.2% (Low) to 9.8% (High)
  • Long-term growth rate: 2.5% (Low) to 4.5% (High)
  • Fair value range: $(8) to $(19)
  • Selected fair value: $-13.50 (-319.9% from current price)

Key Financial Metrics

Metric Value
Market Capitalization $332M
Enterprise Value $842M
Trailing P/E 0.00
Forward P/E 0.00
Trailing EV/EBITDA 6.05
Current Dividend Yield 0.00%
Dividend Growth Rate (5Y) 0.00%
Debt-to-Equity Ratio 1.47

Investment Decision Framework

To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:

  1. Forecast Certainty: DCF methods rely on long-term projections, while earnings power value focuses on current normalized earnings
  2. Business Model Alignment: Dividend models are more appropriate for mature companies with established dividend policies
  3. Historical Accuracy: How well each method has predicted fair value historically

Valuation Weight Matrix

Valuation Method Weight Weighted Value
Dividend Discount Model (Multi-Stage) 100% $0.26
Weighted Average 100% $1.31

Investment Conclusion

Based on our comprehensive valuation analysis, US Xpress Enterprises Inc's weighted average intrinsic value is $1.31, which is approximately 78.7% below the current market price of $6.14.

Key investment considerations:

  • Strong projected earnings growth (-2% to 1% margin)
  • Consistent cash flow generation

Given these factors, we believe US Xpress Enterprises Inc is currently significantly overvalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.