LANDSTAR SYSTEM, INC. (LSTR): what the price requires

At today's price, LANDSTAR SYSTEM, INC. (LSTR) is priced for today's economics sustained for ~7.7 years. 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/LSTR

Headline

FieldValue
TickerLSTR
CompanyLANDSTAR SYSTEM, INC.
Current price$212.74/sh
CompositionVan equipment 49% / Unsided/platform equipment 32% / Less-than-truckload 2% / Other truck transportation 8% / Rail intermodal 2% / Ocean and air cargo carriers 5% / Other 2%

What The Price Requires (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

FieldValue
Inversion basissegment
Must persist for7.7y

Solve inputs: computed at a 9.2% cost of capital; growth searched up to the 25% self-funding ceiling; each 1pp moves the implied horizon ~2.3 years.

How unusual the bet is: high

ReferenceValue
cohort percentile (of 225 peers)87
sustained it ~7.7 years at this level20%
implied end-window share0%

Valuation X-Ray

Every valuation family lands below the price. The price therefore requires assumptions beyond what those standard frames encode.

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.

FamilyMedian price/FVModelsReads
Asset4.86x5expensive
Earnings2.55x4expensive
Relative1.77x3expensive
Growth2.06x4expensive

Families that call it expensive: Asset, Earnings, Relative, Growth

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 9.3%); the inversion above states its own rate.

Per-Model Detail (n=16)

ModelFamilyFVPrice/FVApplicableMethodology
DCF Perpetual GrowthGrowth$84.952.50xyesFCF base $0.2B, growth -1% (input: historical growth), terminal g 0.5%, WACC 9.2%, 5yr projection
DCF Exit MultipleGrowth$176.471.21xyesExit EV/EBITDA: 30.8x / 32.8x / 34.8x (bear / base = today's held flat / bull), 5yr
Relative ValuationRelative$120.511.77xyesP/E 31.42x (blended: static sector reference 20x + trailing (TTM) 58x), scenarios: 26.5x / 31.4x / 36.3x (bear / base = reference held flat / bull), EV/EBITDA 18.93x
Simple DDMGrowth——no—
Two-Stage DDMGrowth$51.044.17xyesStage 1: -22% for 5yr, Stage 2: 3.5% perpetual
Simple Excess ReturnAsset$39.615.37xyesBV/sh $23.48, ROE (TTM) 15.6%, ke 9.3%
Two-Stage Excess ReturnAsset$50.804.19xyes5yr excess ROE then converge to ke=9.3%
Discounted Future Market CapGrowth$131.731.61xyesRev $4.8B, growth -1% (input: historical growth; tapered), Terminal P/S: 1.3x / 1.5x / 1.8x (bear / base = today's held flat / bull, cap 8x)
Growth-Adjusted P/ERelative——no—
Margin TrajectoryGrowth——no—
Earnings Power ValueEarnings$95.212.23xyesNormalized EBIT (5y avg op income, one-time charges added back) $0.36B × (1−25%) / WACC 9.2% → EPV (no growth)
Residual IncomeAsset$51.844.10xyesBV $23.48 + 5yr PV of (ROE (TTM) 15.6% − Kₑ 9.3%) × BV; BV grows 8.8%/yr
Graham NumberAsset$43.744.86xyes√(22.5 × EPS $3.62 × BVPS $23.48) — Graham's conservative floor
EV/EBITDA RelativeRelative$90.652.35xyesEBITDA $0.21B × sector EV/EBITDA 13.0x
FCF YieldEarnings$84.602.51xyesFCF $233.6M / Kₑ 9.3% — zero-growth perpetuity
SBC-Adj FCF YieldEarnings$82.552.58xyesSBC-adj FCF $0.23B (FCF $0.23B − SBC $0.01B) capitalized at Kₑ
Ben Graham FormulaEarnings$3.0370.21xyesEPS $3.62 × (8.5 + 2×-5.0%) × (4.4 / 5.3%) (excluded from median)
ROIC-Justified P/BAsset$22.669.39xyesBV $23.48 × (ROIC 8.9% / WACC 9.2%)
P/Sales SectorRelative$279.970.76xyesRevenue $4.76B × sector P/S 2.0x
PEG Fair ValueRelative——no—
Earnings YieldEarnings$39.145.44xyesEPS $3.62 / required return 9.3% (Rf 4.3% + ERP 5.0%)
Funds From Operations MultipleRelative——no—
Clinical Phase NPVGrowth——no—
MertonAsset——no—
V5 Mechanical———no—

Solvency

FieldValue
Net cash$341.7m
Net debt / NOPAT (after-tax)-2.61x (net cash)
Net debt / operating income (pre-tax)-1.95x (net cash)
Interest coverage31.3x
Share count CAGR (buyback)-2.3%
Burning cashno

Bullet Takeaways

Bull Case

The direction of the earnings line is the bull case, because Landstar is a cyclical caught at the bottom of one of the worst freight downturns in a generation. Earnings fell about 41% in 2025, and fourth-quarter earnings per share dropped to $0.70 from $1.31 a year earlier, which looks alarming until you recognize it as the trough of a cycle that has been compressing since the 2022 peak. The trajectory is what matters: management has pointed to April volume and pricing trends suggesting improving freight conditions, with revenue per load outperforming pre-pandemic seasonal norms. When a high-quality cyclical is earning trough numbers and the cycle starts to turn, the operating leverage works in reverse of the way it did on the way down.

The business model is what makes Landstar exceptional among truckload names: it owns almost no trucks. It runs an asset-light network of independent commission sales agents and owner-operators who provide the capacity, so the company's costs flex with volume. The 10-K describes the structure directly, noting that its "contracts with independent commission sales agents provide commissions to agents at a contractually agreed upon percentage of the amount represented by revenue less purchased transportation," and that roughly 43% of consolidated revenue ran through that variable model. That design means Landstar does not carry the fixed-cost burden of a fleet through a downturn, which is why it stays solidly profitable and cash-generative even at the bottom while asset-heavy carriers bleed.

The balance sheet and capital discipline reinforce the quality. Landstar holds about $342 million of net cash against minimal debt, with interest coverage near 31 times, and the share count has fallen about 2% a year as the company returns cash. Trailing return on equity is still 15.6% despite the depressed environment, which tells you the through-cycle economics are strong. Peers like J.B. Hunt, Knight-Swift, and Schneider compete on scale and owned capacity; Landstar competes on a network of entrepreneurs whose incentives align with utilization. The bull case is that the freight recovery, when it comes, lands on a business built to convert it into earnings faster than the asset-heavy field can.

Bear Case

The capital-allocation question is sharper than it looks for a company buying back stock at a high multiple of depressed earnings. Landstar has been retiring shares, which is the right instinct for a cash-generative business, but doing so at a price that sits far above what the trailing earnings support means each dollar of buyback retires less earnings power than it would at a normalized multiple. Management is effectively betting its own capital that the recovery arrives and the multiple proves justified. If the freight downturn extends, those repurchases will look like cash deployed near a cyclical-valuation peak rather than a trough, which is the opposite of disciplined counter-cyclical capital return.

The revenue base has a concentration the asset-light model does not fully insulate. Landstar depends on its network of independent agents, and a large share of revenue flows through a relatively small group of top-producing agents; the departure of a major agent, or a competitor poaching them, would remove revenue the company does not directly control. The same 10-K that praises the variable-cost structure also makes clear that securing "capacity, particularly truck capacity, at rates that allow the Company" to earn its margin is critical, and in a recovery, capacity tightens and the cost of securing trucks rises, squeezing the spread before pricing catches up. The model is elegant but it is a spread business, and spreads compress at cycle turns in both directions.

The valuation embeds the recovery the bull is counting on, which is the bear's central point. Every standard method, measured against trailing earnings of $3.62 per share, reads the stock as expensive: the price sits well above book-value-plus-profitability, capitalized earnings, and even peer-multiple estimates. The buyer is paying a recovery price for a business still posting falling year-over-year numbers, and management itself has flagged that it continues to monitor the potential effect of tariff and trade policy, with a tough first-quarter volume comparison driven partly by earlier tariff-related pull-forward. The balance sheet is pristine and solvency is not in doubt, but if the freight recovery stalls or trade policy disrupts volumes, the price has no trailing-earnings floor to fall back on, and the consensus rating already sits at Hold for a reason.

Valuation

No standard valuation family reaches the price, which is the signature of a quality cyclical priced at a trough. Trailing earnings per share are $3.62, depressed by the freight recession, and methods anchored on those figures, book-value-plus-profitability, capitalized earnings, peer multiples, all land well below the current level. The price is therefore a bet beyond what any standard frame supports on the trailing year, comprehensible only as an expectation that earnings recover toward the levels Landstar produced before the downturn. The buyer is underwriting the cycle turning, not paying for current profitability.

The more representative lens is normalized earnings power, and even that requires the recovery to be real. Capitalizing the five-year-average operating income, which spans both the boom and the bust, reaches into the $90s, still below the price, while the methods that credit a return to growth get closer. The pattern says the market is pricing a recovery that exceeds the simple through-cycle average, betting that the asset-light model captures a disproportionate share of the upturn. That is plausible given the variable-cost structure, but it is an assumption layered on an assumption: that freight recovers, and that Landstar's spread widens as it does. The decisive variable is the freight cycle itself, since the entire premium over the static methods rests on it.

Solvency is a genuine strength and bounds the downside firmly. Landstar carries about $342 million of net cash, minimal debt, interest coverage near 31 times, and it is not burning cash even at the bottom of the cycle, because the variable-cost model keeps it profitable when fleet owners are not. The falling share count returns capital, though the merit of those buybacks depends on the recovery validating today's multiple. For this name the question is not financial health, which is excellent, nor the quality of the model, which is real, but timing: the price has already paid for the recovery, so the risk is that it arrives later or shallower than the multiple assumes.

Catalysts

Recent results captured the depth of the freight downturn. Full-year 2025 revenue was $4.76 billion, down about 1.6%, with earnings falling roughly 41%, and fourth-quarter earnings per share dropped to $0.70 from $1.31 a year earlier amid tough macro demand. Management described the team performing well despite continued weakness, with revenue, net income, and cash flow having declined sharply since the 2022 peak as post-pandemic freight demand normalized.

The forward signal is tentatively positive but policy-dependent. Management noted April volume and pricing trends pointing to improving freight conditions, with revenue per load outperforming pre-pandemic seasonal norms, while cautioning that the first quarter faced a tough volume comparison partly due to prior tariff-related shipment pull-forward and that it continues to monitor trade policy. Analyst views are split: the average rating is Hold with a target near $179, though Wells Fargo raised its target to $240 from $200 with an Overweight rating on the recovery thesis. The catalysts that matter are the sequential volume and revenue-per-load trends, which signal whether the cycle is genuinely turning, and the path of tariff and trade policy, which can disrupt the freight flows Landstar's agents move.

Peer Cohorts (Per Segment, With Filing Citations)

Transportation Logistics (reported)

Insurance (reported)

Methodology Note

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

Landstar Q4 FY2025 results, January 2026 · Landstar Q1 FY2026 commentary, 2026 · analyst notes, 2026

View the full interactive LSTR report on boothcheck