Knife River (NYSE:KNF) has been front and center for investors after fresh headlines underscored the company’s enviable position to capture a wave of infrastructure funding. With the Infrastructure Investment and Jobs Act still funneling billions into projects, and a hefty $938.7 million backlog in place, Knife River looks primed to benefit as spending accelerates in its core markets. These developments, combined with the company’s pursuit of operational efficiencies and strategic deals, have prompted shareholders to reassess what comes next. Looking at the bigger picture, the past year has not exactly rewarded KNF holders. Shares have slipped more than 7% from this time last year, and other timeframes show a similar mood. The stock is down nearly 18% in the past month alone, a signal that market excitement has given way to caution, even as annual revenue and net income keep moving up. That disconnect hints at shifting sentiment and perhaps suggests investors are now focused on whether the earlier momentum can be rebuilt. With the stock pulling back despite solid fundamentals, is the market offering a window of opportunity, or are investors simply baking future growth into today’s price?

Most Popular Narrative: 29.6% Undervalued

The leading narrative sees Knife River as significantly undervalued, with its current price trading well below fair value, based on forward-looking earnings and margin expansion potential.

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.

Curious how analysts justify such a big upside? Their formula hinges on a blend of long-term backlog, government funding, and bold profit forecasts. The path to this valuation is based on aggressive growth and margin assumptions that might surprise you. What is fueling all this future optimism? Keep reading to dig into the details behind the numbers.

Result: Fair Value of $110.78 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent funding delays in key markets and rising input costs could stall Knife River’s momentum and challenge even the most bullish outlooks.

Find out about the key risks to this Knife River narrative.

Another View: Multiples Tell a Different Story

Looking at Knife River through a different lens, its current market valuation appears steep when compared to the broader industry, based on a common earnings metric. Is the optimism around growth already included in the price, or is the market playing it safe?

Stay updated when valuation signals shift by adding Knife River to your watchlist or portfolio. Alternatively, explore our screener to discover other companies that fit your criteria.

Build Your Own Knife River Narrative

If you see things differently or want to dive deeper into the numbers yourself, you can build your own perspective in just a few minutes. Do it your way.

A great starting point for your Knife River research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

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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.