Should You Investigate Landstar System, Inc. (NASDAQ:LSTR) At US$178?

While Landstar System, Inc. (NASDAQ:LSTR) might not be the most widely known stock at the moment, it maintained its current share price over the past couple of month on the NASDAQGS, with a relatively tight range of US$168 to US$182. However, does this price actually reflect the true 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?

According to my valuation model, Landstar System seems to be fairly priced at around 7.1% below my intrinsic value, which means if you buy Landstar System today, you’d be paying a reasonable price for it. And if you believe that the stock is really worth $192.14, then there isn’t much room for the share price grow beyond what it’s currently trading. What's more, Landstar System’s share price may be more stable over time (relative to the market), as indicated by its low beta.

What kind of growth will Landstar System generate?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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 a negative profit growth of -9.2% expected over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for Landstar System. This certainty tips the risk-return scale towards higher risk.

What This Means For You

Are you a shareholder? Currently, LSTR appears to be trading around its fair value, but given the uncertainty from negative returns in the future, this could be the right time to reduce the risk in your portfolio. Is your current exposure to the stock beneficial for your total portfolio? And is the opportunity cost of holding a negative-outlook stock too high? Before you make a decision on the stock, 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 most advantageous time to buy, given it is trading around its fair value. The stock appears to be trading at fair value, which means there’s less benefit from mispricing. Furthermore, the negative growth outlook increases the risk of holding the stock. However, there are also other important factors we haven’t considered today, which can help crystalize your views on LSTR should the price fluctuate below its true value.

Diving deeper into the forecasts for Landstar System mentioned earlier will help you understand how analysts view the stock going forward. At Simply Wall St, we have the analysts estimates which you can view by clicking here.

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.