Landstar System (NASDAQ:LSTR), an asset-light freight and logistics company, tumbled 15.7% through 11:10 a.m. ET Wednesday morning after reporting mixed earnings last night.
Analysts had forecast a $1.67 per share adjusted profit on $1.5 billion in sales. Landstar’s $1.42 per share profit missed estimates, despite sales edging out estimates at $1.51 billion.
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Landstar Q3 earnings
These were not objectively bad results. In fact, Landstar grew its revenue 25% year over year in Q3, and its $1.42 per share profit — while below analyst estimates — soared 154% year over year despite “highly elevated insurance and claim costs” that cost the company $0.47 per share in lost profit.
Trucking revenue grew 29% in the quarter, and van and unsided/platform equipment revenue grew 30%, leading CEO Frank Lonegro to comment that the “freight transportation backdrop … continues to improve.”
What’s next for Landstar stock
How much will it improve in Q4? Management didn’t say, declining to give guidance in its report. Analysts polled by Yahoo! Finance, however, are forecasting Landstar to earn $5.83 per share this year, a 45% improvement over 2025 earnings.
But here’s the thing: At its current valuation, Landstar stock costs nearly 44x trailing earnings. Even assuming a 45% earnings growth rate was sustainable in a mature industry like trucking (hint: it’s not), that would suggest Landstar stock is, at best, fairly valued at its present price.
Given that most analysts anticipate Landstar’s earnings will grow closer to 15% annually over the next five years (according to S&P Global Market Intelligence data), Landstar stock is probably overvalued right now. I think investors are right to be selling it.
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