Shares of Cargojet (TSX:CJT) stock have been on an upward trend since the end of October 2023, as a potential bull market arguably lingers on the horizon. As of this writing, Cargojet stock trades for $119.17 per share, up by 55.77% from its 52-week low. Despite the recent uptick in the last couple of months, it trades at a 50.87% discount from its November 2020 all-time high.
Considering these facts, Cargojet stock is undoubtedly worth a closer look as you continue your stock market investing journey in 2024. Whether it remains a strong buy or a stock to watch from the sidelines for now, understanding what has been happening with it can paint a clearer picture for you to make a well-informed decision.
A pandemic high-flying stock
The airline, transportation, and hospitality industries saw significant downturns across the board due to restrictions that kept people at home. While that devastated most industry players, Cargojet stock saw itself take flight.
Why? When stuck at home, people opted to order online. Due to a massive surge in online orders, companies like Cargojet had the perfect opportunity to increase destinations and grow their fleets.
Cargojet stock already set itself up for success with partnerships with DHL, Amazon, and several other of the largest shipping companies worldwide. As its reach expanded to a global scale, it remained the only overnight cargo airline in Canada.
The entire situation changed quickly when restrictions lifted, and investors began cutting their losses. However, the stock has regained momentum for the last several weeks.
Substantial value
While it is not your typical high-risk, high-reward growth stock, Cargojet is certainly an undervalued stock. With share prices down to half since all-time highs, analysts believe there is more growth to come. Macroeconomic factors have made the environment difficult for companies across all sectors, but the ship seems to be steadying again.
With interest rate hikes paused, lower inflation and potential rate cuts might leave more cash for consumers to spend on discretionary expenses like online orders. If and when that happens, Cargojet stock can see another surge in demand for its services.
For all the potential for great news, its most recent earnings report saw its revenue go down year over year. That said, investors might still have reasons to be hopeful.
Foolish takeaway
Analysts were not exactly displeased with the overall third-quarter results. Cargojet continues to support its lower-cost initiatives as its volumes recover. While the company missed its earnings estimates, it was only by fine margins. The company is now emphasizing minimizing costs while preparing for what is to come.
The e-commerce industry is only expected to grow in the coming years. Analyst notes are positive, even under a conservative view, believing that the company’s share prices will climb higher and higher in the near future.
Since the company initiated a share-buyback program and enacted a 10% dividend hike, it seems that its management is also confident about a solid performance this year and beyond.
