EXPEDITORS INTERNATIONAL OF WASHINGTON, INC. (EXPD): what the price requires
At today's price, EXPEDITORS INTERNATIONAL OF WASHINGTON, INC. (EXPD) is priced for +12.9% growth. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.
Generated: 2026-07-14 · Exported: 2026-07-16 · Source: https://boothcheck.com/report/EXPD
Headline
| Field | Value |
|---|---|
| Ticker | EXPD |
| Company | EXPEDITORS INTERNATIONAL OF WASHINGTON, INC. |
| Current price | $175.97/sh |
| Composition | Airfreight services 36% / Ocean freight and ocean services 25% / Customs brokerage and other services 39% |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin needed | 4.5% |
| Operating margin today | 10.0% |
| Margin compression implied | -5.5pp |
| Implied growth | 12.9% |
| Multiple paid | 20x operating income |
The operating-margin requirement is derived from the framework's value band at year 12, a separately labeled basis from the headline growth/duration solve.
Solve inputs: computed at a 8.9% cost of capital with 4% terminal growth over a 5-year stage; each 1pp of cost of capital moves the implied operating-profit growth ~5.8pp.
How unusual the bet is: within-range
| Reference | Value |
|---|---|
| vs own history | +0.50σ |
| cohort percentile (of 225 peers) | 44 |
| sustained it ~5 years at this level | 49% |
| implied end-window share | 0% |
Valuation X-Ray
Asset, earnings-power and peer-multiple models all land far below the price; ONLY the growth-DCF reaches it. The bet is durable compounding the static frames structurally cannot price (a moat/durability premium).
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 2.61x | 5 | expensive |
| Earnings | 2.20x | 5 | expensive |
| Relative | 1.64x | 5 | expensive |
| Growth | 1.25x | 3 | expensive |
Families that justify the price: Growth Families that call it expensive: Asset, Earnings, Relative
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 9.1%); the inversion above states its own rate.
Per-Model Detail (n=18)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $113.49 | 1.55x | yes | FCF base $0.9B, growth 2% (input: historical growth), terminal g 1.6%, WACC 9.1%, 5yr projection |
| DCF Exit Multiple | Growth | $178.94 | 0.98x | yes | Exit EV/EBITDA: 18.1x / 20.1x / 22.1x (bear / base = today's held flat / bull), 5yr |
| Relative Valuation | Relative | $130.66 | 1.35x | yes | P/E 21.07x (blended: static sector reference 18x + trailing (TTM) 28x), scenarios: 17.7x / 21.1x / 24.4x (bear / base = reference held flat / bull), EV/EBITDA 14.42x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $67.42 | 2.61x | yes | BV/sh $17.04, ROE (TTM) 36.6%, ke 9.3% |
| Two-Stage Excess Return | Asset | $145.00 | 1.21x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $141.02 | 1.25x | yes | Rev $11.2B, growth 2% (input: historical growth; tapered), Terminal P/S: 1.8x / 2.1x / 2.4x (bear / base = today's held flat / bull, cap 8x) |
| Peter Lynch Fair Value | Relative | $74.28 | 2.37x | yes | EPS $6.19, growth 4% (input: historical EPS growth), PEG=7.90 (Overvalued) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $103.16 | 1.71x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $1.34B × (1−25%) / WACC 9.1% → EPV (no growth) |
| Residual Income | Asset | $105.65 | 1.67x | yes | BV $17.04 + 5yr PV of (ROE (TTM) 36.6% − Kₑ 9.3%) × BV; BV grows 8.8%/yr |
| Graham Number | Asset | $48.71 | 3.61x | yes | √(22.5 × EPS $6.19 × BVPS $17.04) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $107.42 | 1.64x | yes | EBITDA $1.14B × sector EV/EBITDA 12.0x |
| FCF Yield | Earnings | $79.83 | 2.20x | yes | FCF $920.6M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $74.15 | 2.37x | yes | SBC-adj FCF $0.85B (FCF $0.92B − SBC $0.07B) capitalized at Kₑ |
| Ben Graham Formula | Earnings | $81.16 | 2.17x | yes | EPS $6.19 × (8.5 + 2×3.6%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | $26.97 | 6.52x | yes | BV $17.04 × (ROIC 14.4% / WACC 9.1%) |
| P/Sales Sector | Relative | $208.57 | 0.84x | yes | Revenue $11.19B × sector P/S 2.5x |
| PEG Fair Value | Relative | $33.17 | 5.31x | yes | EPS $6.19 × (PEG 1.5 × growth 3.6% (input: historical EPS growth)) → PE 5.4x |
| Earnings Yield | Earnings | $66.92 | 2.63x | yes | EPS $6.19 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net cash | $1.3b |
| Net debt / NOPAT (after-tax) | -1.56x (net cash) |
| Net debt / operating income (pre-tax) | -1.17x (net cash) |
| Share count CAGR (buyback) | -5.7% |
| Burning cash | no |
Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.
Bullet Takeaways
- Expeditors is a non-asset-based global freight forwarder, arranging airfreight, ocean, and customs brokerage rather than owning planes or ships, and its value rests on a network and relationships with "airlines, ocean carrier lines and ground transportation providers, as well as governmental agencies".
- The biggest specific risk is the freight cycle and trade policy: the company itself says it is "too early to know what the overall impact on volumes might be" from tariff-driven rerouting, and ocean revenue fell 23% in the first quarter as excess capacity pressured rates.
- What moves the stock next is volume mix and the AI-infrastructure tailwind: first-quarter diluted EPS rose 16% to $1.71, with airfreight revenue up 14% on demand from technology customers building AI infrastructure.
Bull Case
The market and the fundamentals tell a coherent story once you see what Expeditors actually is. The static valuation methods read the stock as richly valued, and only the forward-growth method reaches the price, which usually signals an extended multiple. Here it signals the opposite of fragility. Expeditors owns almost no hard assets; it arranges transportation and earns a margin on the service, so its book value is tiny relative to its earnings power and the asset-based methods structurally understate it. The proof is in the returns: a 36.6% return on equity on a near-debt-free balance sheet, with roughly $1.29 billion of net cash. A business earning that kind of return on so little capital is compounding in a way that book value and trailing earnings cannot capture, which is exactly why only the growth lens reaches the price.
The asset-light model is also a built-in shock absorber, and the first quarter showed it working. Total revenue rose only 4%, but operating income grew 11% and diluted EPS jumped 16% to $1.71, well ahead of the roughly $1.33 expected. Because Expeditors buys transportation capacity and resells it as a service, it can hold or expand its net margin even when carrier rates and volumes swing, passing cost changes through to customers. The mix is shifting toward its highest-value work: customs brokerage and other services revenue rose 17% and airfreight revenue rose 14%, the latter "helped by strong demand from technology customers building artificial intelligence infrastructure".
Capital discipline completes the picture. Expeditors carries no meaningful debt, generates strong free cash flow, and has shrunk its share count by roughly 5.7% a year, buying back $288 million of stock in the quarter. A company with a fortress balance sheet that consistently retires its own shares is compounding per-share value on top of its operating growth. The bull case is that Expeditors is one of the highest-quality compounders in logistics, asset-light, counter-cyclical in margin, and disciplined with capital, and the price reflects durable compounding the static methods cannot frame.
Bear Case
The capital allocation here is genuinely excellent, which means the bear has to look elsewhere, and the honest concern is the cyclicality the asset-light model masks but does not remove. Expeditors does not own the planes and ships, so it avoids the capital risk, but its earnings still ride global trade volumes, and those volumes are turning choppy. Ocean revenue fell 23% in the first quarter as excess industry capacity pressured rates and volumes, and ocean volumes themselves declined 4%. A forwarder's revenue is leveraged to both the price of freight and the amount of it moving, and when global capacity outruns demand, the company's pricing power on that leg compresses.
Trade policy is the wild card the company cannot manage, and it says so. The filing notes that as freight is "shifting to other routes and as customers look to mitigate their exposure to U.S./China-specific tariffs, it is too early to know what the overall impact on volumes might be", and that the resumption of safe Red Sea passage would add capacity that pressures rates further. Expeditors is, in effect, a leveraged bet on the smooth functioning of global trade, and the current environment of tariffs, rerouting, and geopolitical disruption is the kind that can scramble the volume and rate assumptions in either direction. The reliance on carrier relationships is also a dependency: the business runs on "good working relationships with a variety of entities, including airlines, ocean carrier lines and ground transportation providers", and a forwarder sits between shippers and carriers, squeezed when either side gains leverage.
The valuation requires the compounding to continue at a real clip. The price implies about 10.8% operating growth a year for five years, and while that sits within Expeditors' historical range, only about half of comparable fast-growers sustained that pace even five years. Every static method, asset value, earnings power, and peer multiples, reads the price as expensive, so there is no value cushion if the growth assumption falters; the entire case rests on the forward-growth view. The bear case is not that Expeditors is poorly run, it is the opposite, but a high-quality, cyclically exposed forwarder priced for sustained double-digit growth, into a freight environment the company itself calls unpredictable, is paying full price for a smooth path that trade rarely delivers.
Valuation
The price embeds a clear bet: about 10.8% operating growth a year for five years. That pace is within what Expeditors has delivered historically, so the assumption is not outlandish, but the rarity reference is a check on it, with only about half of comparable fast-growers sustaining that level for even five years. The premium the price carries is a durability premium, the market paying for a high-return compounder to keep compounding.
The methods make that premium visible. Asset value, earnings power, and peer multiples all read the price as expensive, and only the forward-growth family reaches it. For most companies that pattern flags an overextended multiple; for Expeditors it reflects the asset-light reality, where a 36.6% return on equity on minimal book value means the static methods anchored on assets and trailing earnings structurally understate the business. The honest framing is that the spread between the growth method and the value methods IS the premium, and it is the price of owning a forwarder that earns extraordinary returns on capital. Against logistics peers such as C.H. Robinson and Hub Group, Expeditors' multiple sits in the lower half of the range despite its superior returns, which is the part of the valuation a bull leans on.
Solvency is a strength and removes any financial tail risk. Expeditors holds roughly $1.29 billion of net cash, carries essentially no debt, generates strong free cash flow, and returns it through aggressive buybacks. There is no balance-sheet risk to bound; the company could absorb a freight downturn without strain. What solvency cannot do is make the price cheap: the cash is already inside what the methods value, and they still place the asset and earnings lenses below the price. The buyer is underwriting continued double-digit growth in a cyclical, trade-dependent business, paying a durability premium for one of the best operators in the sector.
Catalysts
The first quarter of 2026 beat expectations on the strength of mix and discipline. Expeditors reported diluted EPS of $1.71, up 16% and well ahead of the roughly $1.33 consensus, with net earnings up 13% to $230 million, revenue up 4% to $2.78 billion, and operating income up 11% to $294.8 million. The volume picture was split: airfreight tonnage rose 5% and ocean volumes fell 4%, while by revenue, customs brokerage rose 17% and airfreight rose 14% on demand from technology customers building AI infrastructure, even as ocean revenue fell 23% on excess capacity. The company repurchased $288 million of stock in the quarter.
The outlook is deliberately cautious, which fits the environment. Management described the freight environment as unpredictable given global events and macroeconomic concerns, and the filing flags both tariff-driven rerouting and the rate impact of any Red Sea capacity normalization as swing factors. Analyst sentiment is neutral, with a median target near $128 and a wide range from $95 to $166, reflecting genuine disagreement about where freight volumes head. The catalysts that matter are the trajectory of airfreight tonnage, particularly the AI-infrastructure demand, the recovery or further weakness in ocean, and how trade policy reshapes global volumes, all of which feed the growth assumption the price depends on.
Peer Cohorts (Per Segment, With Filing Citations)
Core business (reported)
- CHRW (C.H. ROBINSON WORLDWIDE, INC.)
- (no filing in the citation store)
- HUBG (HUB GROUP, INC.)
- (no filing in the citation store)
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.
Sources
Q1 2026 results, May 2026 · analyst consensus, 2026