LSTR Stock Overview
Landstar System, Inc. provides integrated transportation management solutions in the United States, Canada, Mexico, and internationally.
Landstar System Competitors
Price History & Performance
|Historical stock prices|
|Current Share Price||US$142.74|
|52 Week High||US$188.63|
|52 Week Low||US$137.15|
|1 Month Change||-5.76%|
|3 Month Change||-3.54%|
|1 Year Change||-13.30%|
|3 Year Change||26.92%|
|5 Year Change||43.24%|
|Change since IPO||8,684.00%|
Recent News & Updates
I Would Love To Buy Landstar System, Inc.
Summary The company has posted excellent financial results for the first 26 weeks of the year. Revenue, net income, and the dividend are materially higher. This is a (volatile) growth company. In spite of this, the shares are trading at a reasonable valuation. That is a compelling combination, in my view. I will be buying when the puts I wrote in April expire. These have outperformed the shares, highlighting yet again their risk-reducing, yield-enhancing potential. It's been exactly five months since I put out my latest piece on Landstar System, Inc. (LSTR), and in that time, the shares have returned a loss of about 3.4% against a loss of about 12.5% for the S&P 500. The company has reported results since, so I want to review the name again to see if it makes sense to buy or not. I'll review the latest financials, and will look at the current valuation. Additionally, as is my wont, I'm going to spend some time bragging about the performance of my short put options, so get ready for that. It's that time again, dear readers. It's the time when I post my "thesis statement" paragraph for your enjoyment and edification. It's here where I offer you the gist of my thinking in a short, hopefully pithy, paragraph. This allows you to save time, and avoid the bragging that I threatened above. You're welcome. Anyway, I think Landstar has had a magnificent time since I last wrote about the business. Sales and profits are up dramatically relative to both last year and the pre-pandemic period. Additionally, the very well-covered dividend has grown nicely. Debt has also grown dramatically but remains well below cash on hand, so there's not much risk in the capital structure in my view. In spite of all of this, the shares are trading near multi-year low valuations. There will be a slowdown in the business at some point, as it's clearly cyclical, but the market is overreacting in my view. The puts I wrote back in April have done very well, especially against the stock. This is yet another example of short puts offering better returns and lower risk. The puts expire next month and, assuming the world hasn't changed dramatically, I'll be buying the shares then. If it weren't for these puts, I'd be buying the stock today. If you aren't saddled by such commitments yourself, I would recommend picking up a few shares of this wonderful growth machine at a reasonable price. Financial Snapshot I think the latest financial results at Landstar have been mostly spectacular. For example, revenue and net income are up 38% and 40% respectively. The company saw fit to reward shareholders with this improvement in the business by increasing the dividend by fully 19%. When compared to the pre-pandemic period, things look even better. For instance, revenue for the first 26 weeks of 2022 was about 89% higher than the same period in 2019, and net income was up by 91%. In my estimation, this fits the definition of a "growth" company. It's not all sunshine and lollipops over at Landstar, though. The company has loaded up on debt over the past year as the business has grown. Specifically, long-term debt is now about 35% higher than it was this time last year. Unsurprisingly, interest expenses have also jumped by about 11% for the first 26 weeks of 2022 relative to the same period in 2021. I would normally be much more bothered about this than I am, but the company is sitting on an enormous cash hoard. Their cash and short-term investments are currently about $119.7 million against long-term debt of $110.8 million. Thus, I'm not too worried about leverage here, though I'd prefer to see the company clean up the capital structure somewhat. I do think the dividend is reasonably well covered, and for that reason, I'd be very happy to buy the stock at the right price. Landstar System Financials (Landstar System investor relations) The Stock As my regulars know, I consider the "business" and the "stock" to be quite different things. In case you're new here, I'll tell you also. I consider the "business" and the "stock" to be quite different things. My regulars know that I've talked myself out of some profitable trades with the words "at the right price" many times, but as we close in on the end of a week that's seen a 6% decline in the S&P 500, I'm reminded that an instinct to preserve capital isn't a bad one. I'd rather miss out on some gains than lose capital. To continue with the theme that businesses and stocks are distinct things, consider the following. Every business buys a number of inputs, performs value-adding activities on them and sells the results at a profit. In the final analysis, that's what every business is. The stock, on the other hand, is an ownership stake in the business that gets traded around in a market that aggregates the crowd's rapidly changing views about the future health of the business, future demand for transportation and logistics services, changing input costs, and so on. It may be that some analyst decides that "future growth catalysts" for a related business like railroads are weaker than we once thought, and Landstar falls in price in sympathy, in spite of absolutely no change at the company. The stock also moves around because it gets taken along for the ride when the crowd changes its views about "the market" in general. So, in some sense, the stock is buffeted by the crowds' rapidly changing views about a given company, a series of related and obliquely related industries, and the crowd's rapidly changing views about the overall stock market. This is troublesome, but it's a potential source of profit because these price movements have the potential to create a disconnect between market expectations and subsequent reality. In my experience, this is the only way to generate profits trading stocks: by determining the crowd's expectations about a given company's performance, spotting discrepancies between those assumptions and stock price, and placing a trade accordingly. I've also found it's the case that investors do better/less badly when they buy shares that are relatively cheap, because cheap shares correlate with low expectations. As my regulars know, I measure the relative cheapness of a stock in a few ways. For example, I like to look at the ratio of price to some measure of economic value, like earnings, sales, free cash, and the like. I like to see a company trading at a discount to both the overall market, and to its own history. Previously, I was lukewarm on Landstar because the price to free cash flow was sitting around 21.8 times, and the price to book was stuck at 6.26 times. Fast-forward five months and the shares are about 26% cheaper on a price to free cash basis, and about 5.75% cheaper on a price to book basis. Additionally, shares seem to be close to a multi-year valuation low on a price to free cash basis. LSTR data by YCharts LSTR data by YCharts In addition to looking at simple ratios, I actually use a large number of other, more complex valuation measures, one of which involves trying to understand the assumptions currently embedded in price. If you read me regularly, you know that I rely on the work of Professor Stephen Penman, and increasingly Mauboussin and Rappaport to do this. This approach uses the stock price itself as a source of information. It involves "reverse engineering" the assumptions that cause the current price by isolating the "g" (growth) variable in a standard finance formula. When I apply this approach to Landstar, it seems the market is assuming growth rate of about 4.9%, which is a slightly more optimistic forecast than the last time I reviewed the name when it was sitting at 4.8%. So there's no movement on this front, but the shares are much cheaper on a price to free cash flow basis, which I find quite compelling. Options Update I find the current price level compelling, which prompts the question: am I a buyer at current levels? I certainly would be if it were not for my short put position. Way back in April, I wrote 10 Landstar puts with a strike of $115 for $2.55 each, and these are now bid at $0, so that trade's worked out well in my view. That strike price lined up with a price to free cash ratio of about 17 times, when the company was generating far less cash. As of now, the strike now represents a price to free cash flow ratio of about 12.9 times, which would be a great entry price in my view.
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|LSTR||US Transportation||US Market|
Return vs Industry: LSTR exceeded the US Transportation industry which returned -25.7% over the past year.
Return vs Market: LSTR exceeded the US Market which returned -21.6% over the past year.
|LSTR Average Weekly Movement||4.1%|
|Transportation Industry Average Movement||6.7%|
|Market Average Movement||6.9%|
|10% most volatile stocks in US Market||15.9%|
|10% least volatile stocks in US Market||2.8%|
Stable Share Price: LSTR is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 4% a week.
Volatility Over Time: LSTR's weekly volatility (4%) has been stable over the past year.
About the Company
Landstar System, Inc. provides integrated transportation management solutions in the United States, Canada, Mexico, and internationally. The company operates through two segments: Transportation Logistics, and Insurance. The Transportation Logistics segment offers a range of transportation services, including truckload and less-than-truckload transportation, rail intermodal, air cargo, ocean cargo, expedited ground and air delivery of time-critical freight, heavy-haul/specialized, U.S.-Canada and U.S.-Mexico cross-border, intra-Mexico, intra-Canada, project cargo, and customs brokerage, as well as offers transportation services to other transportation companies, such as third party logistics, small package and less-than-truckload service providers.
Landstar System Fundamentals Summary
|LSTR fundamental statistics|
Is LSTR overvalued?See Fair Value and valuation analysis
Earnings & Revenue
|LSTR income statement (TTM)|
|Cost of Revenue||US$5.98b|
Last Reported Earnings
Jun 25, 2022
Next Earnings Date
Oct 19, 2022
|Earnings per share (EPS)||12.34|
|Net Profit Margin||5.89%|
How did LSTR perform over the long term?See historical performance and comparison
0.8%Current Dividend Yield
Is LSTR undervalued compared to its fair value, analyst forecasts and its price relative to the market?
Valuation Score 2/6
Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Key Valuation Metric
Which metric is best to use when looking at relative valuation for LSTR?
Other financial metrics that can be useful for relative valuation.
|What is LSTR's n/a Ratio?|
Price to Earnings Ratio vs Peers
How does LSTR's PE Ratio compare to its peers?
|LSTR PE Ratio vs Peers|
|Company||PE||Estimated Growth||Market Cap|
SNDR Schneider National
KNX Knight-Swift Transportation Holdings
XPO XPO Logistics
LSTR Landstar System
Price-To-Earnings vs Peers: LSTR is expensive based on its Price-To-Earnings Ratio (11.6x) compared to the peer average (9.3x).
Price to Earnings Ratio vs Industry
How does LSTR's PE Ratio compare vs other companies in the US Transportation Industry?
Price-To-Earnings vs Industry: LSTR is expensive based on its Price-To-Earnings Ratio (11.6x) compared to the US Transportation industry average (8.6x)
Price to Earnings Ratio vs Fair Ratio
What is LSTR's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.
|Current PE Ratio||11.6x|
|Fair PE Ratio||7.2x|
Price-To-Earnings vs Fair Ratio: LSTR is expensive based on its Price-To-Earnings Ratio (11.6x) compared to the estimated Fair Price-To-Earnings Ratio (7.2x).
Share Price vs Fair Value
What is the Fair Price of LSTR when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.
Below Fair Value: LSTR ($142.74) is trading below our estimate of fair value ($224.18)
Significantly Below Fair Value: LSTR is trading below fair value by more than 20%.
Analyst Price Targets
What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?
Analyst Forecast: Target price is less than 20% higher than the current share price.
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How is Landstar System forecast to perform in the next 1 to 3 years based on estimates from 13 analysts?
Future Growth Score1/6
Future Growth Score 1/6
Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Forecasted annual earnings growth
Earnings and Revenue Growth Forecasts
Analyst Future Growth Forecasts
Earnings vs Savings Rate: LSTR's earnings are forecast to decline over the next 3 years (-21.2% per year).
Earnings vs Market: LSTR's earnings are forecast to decline over the next 3 years (-21.2% per year).
High Growth Earnings: LSTR's earnings are forecast to decline over the next 3 years.
Revenue vs Market: LSTR's revenue is expected to decline over the next 3 years (-12.7% per year).
High Growth Revenue: LSTR's revenue is forecast to decline over the next 3 years (-12.7% per year).
Earnings per Share Growth Forecasts
Future Return on Equity
Future ROE: LSTR's Return on Equity is forecast to be high in 3 years time (27.5%)
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How has Landstar System performed over the past 5 years?
Past Performance Score5/6
Past Performance Score 5/6
Growing Profit Margin
Earnings vs Industry
Historical annual earnings growth
Earnings and Revenue History
Quality Earnings: LSTR has high quality earnings.
Growing Profit Margin: LSTR's current net profit margins (5.9%) are higher than last year (5.6%).
Past Earnings Growth Analysis
Earnings Trend: LSTR's earnings have grown by 15.9% per year over the past 5 years.
Accelerating Growth: LSTR's earnings growth over the past year (52%) exceeds its 5-year average (15.9% per year).
Earnings vs Industry: LSTR earnings growth over the past year (52%) underperformed the Transportation industry 62.5%.
Return on Equity
High ROE: LSTR's Return on Equity (52.4%) is considered outstanding.
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How is Landstar System's financial position?
Financial Health Score5/6
Financial Health Score 5/6
Short Term Liabilities
Long Term Liabilities
Financial Position Analysis
Short Term Liabilities: LSTR's short term assets ($1.5B) exceed its short term liabilities ($977.9M).
Long Term Liabilities: LSTR's short term assets ($1.5B) exceed its long term liabilities ($182.3M).
Debt to Equity History and Analysis
Debt Level: LSTR has more cash than its total debt.
Reducing Debt: LSTR's debt to equity ratio has increased from 5.6% to 13.3% over the past 5 years.
Debt Coverage: LSTR's debt is well covered by operating cash flow (307.4%).
Interest Coverage: LSTR's interest payments on its debt are well covered by EBIT (140.9x coverage).
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What is Landstar System current dividend yield, its reliability and sustainability?
Dividend Score 0/6
Cash Flow Coverage
Current Dividend Yield
Dividend Yield vs Market
Notable Dividend: LSTR's dividend (0.84%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.62%).
High Dividend: LSTR's dividend (0.84%) is low compared to the top 25% of dividend payers in the US market (4.45%).
Stability and Growth of Payments
Stable Dividend: LSTR is not paying a notable dividend for the US market, therefore no need to check if payments are stable.
Growing Dividend: LSTR is not paying a notable dividend for the US market, therefore no need to check if payments are increasing.
Earnings Payout to Shareholders
Earnings Coverage: LSTR is not paying a notable dividend for the US market.
Cash Payout to Shareholders
Cash Flow Coverage: LSTR is not paying a notable dividend for the US market.
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How experienced are the management team and are they aligned to shareholders interests?
Average management tenure
Jim Gattoni (61 yo)
Mr. James B. Gattoni, also known as Jim, serves as the Chief Executive Officer at Landstar System Inc. since December 29, 2014 and also serves as the President since January 2014. He serves as a Director a...
CEO Compensation Analysis
Compensation vs Market: Jim's total compensation ($USD5.40M) is below average for companies of similar size in the US market ($USD8.36M).
Compensation vs Earnings: Jim's compensation has increased by more than 20% in the past year.
Experienced Management: LSTR's management team is seasoned and experienced (7 years average tenure).
Experienced Board: LSTR's board of directors are considered experienced (7.5 years average tenure).
Who are the major shareholders and have insiders been buying or selling?
Insider Trading Volume
Insider Buying: LSTR insiders have only sold shares in the past 3 months.
Recent Insider Transactions
|18 Aug 22||SellUS$625,755||Joseph Beacom||Individual||4,000||US$156.56|
|15 Mar 22||BuyUS$76,900||Homaira Akbari||Individual||500||US$153.80|
|24 Feb 22||BuyUS$302,601||Homaira Akbari||Individual||2,000||US$151.30|
Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.
|Ownership||Name||Shares||Current Value||Change %||Portfolio %|
Landstar System, Inc.'s employee growth, exchange listings and data sources
- Name: Landstar System, Inc.
- Ticker: LSTR
- Exchange: NasdaqGS
- Founded: 1968
- Industry: Trucking
- Sector: Transportation
- Implied Market Cap: US$5.200b
- Shares outstanding: 36.43m
- Website: https://www.landstar.com
Number of Employees
- Landstar System, Inc.
- 13410 Sutton Park Drive South
- United States
|Ticker||Exchange||Primary Security||Security Type||Country||Currency||Listed on|
|LSTR||NasdaqGS (Nasdaq Global Select)||Yes||Common Stock||US||USD||Mar 1993|
|LDS||DB (Deutsche Boerse AG)||Yes||Common Stock||DE||EUR||Mar 1993|
|LSTR *||BMV (Bolsa Mexicana de Valores)||Yes||Common Stock||MX||MXN||Mar 1993|
Company Analysis and Financial Data Status
|Data||Last Updated (UTC time)|
|Company Analysis||2022/09/23 00:00|
|End of Day Share Price||2022/09/23 00:00|
Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.