Should You Investigate Landstar System, Inc. (NASDAQ:LSTR) At US$153?

Landstar System, Inc. (NASDAQ:LSTR), might not be a large cap stock, but it received a lot of attention from a substantial price movement on the NASDAQGS over the last few months, increasing to US$159 at one point, and dropping to the lows of US$141. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Landstar System's current trading price of US$153 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Landstar System’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

See our latest analysis for Landstar System

Is Landstar System Still Cheap?

The stock is currently trading at US$153 on the share market, which means it is overvalued by 23% compared to my intrinsic value of $124.18. Not the best news for investors looking to buy! Another thing to keep in mind is that Landstar System’s share price is quite stable relative to the market, as indicated by its low beta. This means that if you believe the current share price should move towards its intrinsic value over time, a low beta could suggest it is not likely to reach that level anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range again.

What kind of growth will Landstar System generate?

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. However, with an extremely negative double-digit change in profit expected over the next couple of years, near-term growth is certainly not a driver of a buy decision. It seems like high uncertainty is on the cards for Landstar System, at least in the near future.

What This Means For You

Are you a shareholder? If you believe LSTR should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. Given the risk from a negative growth outlook, this could be the right time to reduce your total portfolio risk. But before you make this decision, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping an eye on LSTR for a while, now may not be the best time to enter into the stock. Price climbed passed its true value, in addition to a risky future outlook. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Should the price fall in the future, will you be well-informed enough to buy?

If you want to dive deeper into Landstar System, you'd also look into what risks it is currently facing. Our analysis shows 2 warning signs for Landstar System (1 is concerning!) and we strongly recommend you look at these before investing.

If you are no longer interested in Landstar System, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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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.