Expeditors (EXPD): Assessing Valuation After Q3 Earnings Beat and AI-Driven Growth

Expeditors International of Washington posted stronger than expected third-quarter results, delivering another earnings beat driven by its AI investments and growth in customs brokerage. The company’s global workforce also expanded to meet rising demand.

See our latest analysis for Expeditors International of Washington.

Expeditors’ latest quarter not only delivered another earnings beat, but also seemed to spark real momentum. Shares jumped 10.8% after the results and now sport a one-month share price return of 18.6%. The stock has solidified a longer-term track record, with a 1-year total shareholder return of 19.7% and 69.7% over five years, indicating both recent optimism and sustained value creation.

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With shares rallying and the latest quarter again beating expectations, investors now face a critical question: is Expeditors still trading below its true value, or has the market already factored in its future growth prospects?

Price-to-Earnings of 22.5x: Is it justified?

Expeditors International of Washington currently trades at a price-to-earnings (P/E) ratio of 22.5, positioning the stock as significantly more expensive than both its direct competitors and the broader logistics industry peers.

The P/E ratio measures how much investors are paying for each dollar of earnings. It is a standard benchmark for evaluating relative value, especially among mature, established companies like Expeditors. In this case, a higher ratio signals the market expects above-average future growth or quality of earnings.

The 22.5x multiple stands well above the peer average of 18x and even higher compared to the global logistics industry average of 16.1x. The sharp difference between Expeditors’ P/E and its estimated fair P/E ratio of 13.2x suggests the market may be pricing in a premium for its recent momentum, robust margins, or unique positioning. This premium could be justified by recent outperformance, but it may also leave less upside if growth slows or competitive dynamics shift.

Explore the SWS fair ratio for Expeditors International of Washington

Result: Price-to-Earnings of 22.5x (OVERVALUED)

However, there are risks if industry growth moderates or if Expeditors’ premium valuation attracts increased competition for its core logistics business.

Find out about the key risks to this Expeditors International of Washington narrative.

Another View: SWS DCF Model Suggests Undervaluation

While the price-to-earnings ratio suggests Expeditors is expensive versus peers, our DCF model paints a different picture. According to the SWS DCF analysis, the shares are actually trading 24.3% below their estimated fair value. Could the market be underestimating long-term potential despite rich current multiples?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Expeditors International of Washington for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 899 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Expeditors International of Washington Narrative

If you see things differently or would rather dig into the numbers yourself, you can easily build your own perspective on Expeditors in just a few minutes, and Do it your way.

A great starting point for your Expeditors International of Washington research is our analysis highlighting 2 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.

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