Schneider National

Schneider National Inc receives a 3-star quantitative star rating, indicating our belief that this share class is a balanced choice, but prudent investors should consider looking elsewhere. The stock currently trades at a price consistent with our quantitative fair value estimate, which has a medium uncertainty rating.

The firm's valuation metrics undermine our estimated fair value. A company's valuation metrics provide insights into the market's expectations for its future growth and profitability. For example, the firm's enterprise value to market value ratio of 1.0 lies in the bottom 50% compared with peers globally. The market value of equity makes up a large fraction of enterprise value, indicating that shares have sharply risen, or that the company has a "lazy" balance sheet that is underleveraged. This contributes to our balanced fair value estimate.

The company's balance sheet is an additional cause for concern. Low leverage can limit a company's ability to invest in growth, potentially reducing shareholder value compared with a balanced use of debt and equity financing. The firm's debt to EBITDA ratio of 0.7, a core component of leverage, sits in the bottom 20% compared with global peers. With little debt relative to assets, this firm has a "lazy" balance sheet, which can depress returns on invested capital. This characteristic further promotes our neutral price/fair value ratio.

In addition to the aforementioned drivers, our model considers momentum as part of its comprehensive analysis. This share class has outperformed the broader universe over the past year. While we believe the stock is fairly-valued, this outperformance had a negative impact on our valuation estimate.

With its quantitative economic moat rating of none, we do not expect this company to materially outearn its cost of capital in the long run. Additionally, the firm's moderate financial health score suggests it is acceptably positioned against adverse economic circumstances.