Knife River (KNF) has been removed from both the Russell 2000 Defensive Index and the Russell 2000 Growth-Defensive Index, a change that can influence index fund flows and short term trading interest.

Knife River’s removal from the Russell 2000 Defensive indexes comes after a mixed stretch in trading, with the stock down 8.63% on a 7 day share price return but still showing a 16.69% year to date share price return and a 3 year total shareholder return above 100%. This suggests that longer term holders have seen much stronger results than recent short term moves might imply.

If this kind of index driven move has you looking beyond a single stock, it could be a good moment to broaden your search with the 35 power grid technology and infrastructure stocks

With Knife River posting a 16.69% year to date share price return, annual revenue growth of 6.81% and net income growth of 16.49%, investors have to ask: is there still a buying opportunity here, or is the market already pricing in future growth?

Most Popular Narrative: 18.5% Undervalued

With Knife River last closing at $84.88 against a narrative fair value of $104.11, the widely followed view frames the stock as trading at a clear discount while still tying that valuation to specific growth and margin assumptions.

Knife River's record $1.3 billion backlog and exposure to public infrastructure projects supported by robust, multiyear federal and state Department of Transportation funding (including 60% of IIJA funds still to be spent), positions the company for strong, sustained revenue growth well into 2026 and beyond.

Want to see how that backlog, earnings trajectory and target margin profile are stitched together into a single fair value number? The crux of this narrative is how revenue growth, profitability and the chosen valuation multiple all interact to justify that figure, and which assumptions quietly carry the most weight.

Result: Fair Value of $104.11 (UNDERVALUED)

However, Knife River's heavy reliance on public infrastructure funding, along with its exposure to weather related disruption in key regions, could quickly undermine this upside focused narrative.

Another View: Knife River Looks Expensive On Earnings

That narrative fair value of $104.11 for Knife River leans on growth, margins and backlog, but the current P/E of 32.9x tells a different story. It sits above the peer average of 28.6x and the fair ratio of 21.7x, which points to valuation risk if sentiment cools.

For investors weighing these mixed signals, the question is whether Knife River's execution can close the gap before the market pulls the P/E closer to that fair ratio.

Next Steps

If this mix of optimism and caution around Knife River leaves you undecided, it is worth checking the data yourself and weighing both sides. To see how identified risks line up against potential rewards, take a closer look at the 2 key rewards and 1 important warning sign

Looking for more investment ideas beyond Knife River?

If you are still unsure about Knife River after weighing both narratives, it makes sense to widen your watchlist and let the numbers guide your next move.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.