Has Robinson’s 54% 2024 Rally Created a Genuine Opportunity for Investors?

• Curious if C.H. Robinson Worldwide’s stock is genuinely a good deal or just looks impressive on the surface? You are not alone, as lots of investors want to know what is really behind those headlines and price moves.
• This stock has seen eye-catching growth, rising 4.7% in the last week, 22.8% across the past month, and 54.6% in 2024 so far.
• Much of this momentum has been driven by renewed optimism in the transportation sector and recent industry-wide news pointing toward shifting supply chain conditions and evolving logistics demand. The conversation around freight capacity and strategic shifts by major players have added more attention and some volatility to C.H. Robinson’s share price.
• Despite these market moves, C.H. Robinson Worldwide earns a valuation score of 0 out of 6 on our value framework, suggesting the stock is not undervalued by traditional checks. Let us dig into the mainstream valuation methods next, and stick around as there is a more powerful way to look at value that we will reveal by the end of the article.

C.H. Robinson Worldwide scores just 0/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: C.H. Robinson Worldwide Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow (DCF) model estimates the current worth of a company by projecting its future cash flows and then discounting those projections back to today's value. This approach provides a holistic view of the company’s potential by focusing on the cash that operations are expected to generate over time.

For C.H. Robinson Worldwide, the latest available Free Cash Flow stands at $801.5 Million. Analyst estimates extend out a few years, projecting cash flows such as $838.3 Million by 2029. After 2029, Simply Wall St extrapolates future cash flows based on historical trends and industry expectations.

By summing these discounted projections, the model results in an estimated intrinsic value of $72.26 per share, using the 2 Stage Free Cash Flow to Equity method. When compared to the company’s current market price, this means C.H. Robinson Worldwide’s stock is trading at a 119.8% premium to what the DCF model suggests is fair.

In summary, the DCF model indicates that this stock is significantly overvalued based on today’s numbers.

Result: OVERVALUED

Our Discounted Cash Flow (DCF) analysis suggests C.H. Robinson Worldwide may be overvalued by 119.8%. Discover 920 undervalued stocks or create your own screener to find better value opportunities.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for C.H. Robinson Worldwide.

Approach 2: C.H. Robinson Worldwide Price vs Earnings

The Price-to-Earnings (PE) ratio is widely recognized as a solid valuation tool for profitable companies because it directly relates a company’s share price to its earnings, giving investors insight into how much they are paying for each dollar of profit. When a company’s profits are stable and growing, the PE ratio is a useful shorthand to assess value.

However, what counts as a "normal" or "fair" PE ratio does not exist in isolation. Growth prospects and risk play a major role, with rapidly expanding businesses often commanding a higher PE, while greater risks tend to push it lower.

C.H. Robinson Worldwide currently trades at a PE ratio of 31.28x. For context, the logistics industry average sits at just 16.09x, and its closest peers average 16.76x. This places C.H. Robinson well above both benchmarks.

Simply Wall St calculates a "Fair Ratio" for each stock, which in this case is 15.61x for C.H. Robinson. This proprietary metric takes the assessment further than a simple comparison to peers or the overall industry. It considers factors like expected earnings growth, profit margins, risk profile, industry health, and company size, giving a more holistic view of fair value.

When comparing C.H. Robinson’s current PE of 31.28x to its Fair Ratio of 15.61x, the difference is clear: investors are paying a significant premium relative to what would be considered justified given the company's financials and outlook.

Result: OVERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1443 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your C.H. Robinson Worldwide Narrative

Earlier we mentioned that there is an even better way to understand valuation. Let us introduce you to Narratives. Narratives are the story and reasoning you bring to your investment decisions by combining your expectations about a company’s future revenue, earnings, and margins to arrive at your own fair value estimate.

With Narratives, investors connect the facts and forecasts directly to their outlook on a company, creating a bridge between the story behind the business and the financial outcomes they expect. On Simply Wall St’s Community page, millions of investors use this accessible tool to articulate their perspectives, compare them with others, and track how their view stands up as new information emerges.

Narratives make buy or sell decisions smarter by comparing your fair value to the market price. These estimates are always kept up to date when major news, earnings releases, or shifts in industry trends occur. For example, one investor might see C.H. Robinson Worldwide as worth $152.20 due to optimism about automation and global expansion, while another focuses on risks like trade policy and places fair value as low as $71.00, showing just how much room there is for different stories about the same stock.

Do you think there's more to the story for C.H. Robinson Worldwide? Head over to our Community to see what others are saying!

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.

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