Landstar System Q3 Earnings: Can NasdaqGS:LSTR Hit Its $1.42 EPS Target?

in EARNINGS/INVESTING IDEAS by

Landstar System, Inc. (NasdaqGS:LSTR) is scheduled to report Q3 earnings results after markets close for trading on October 21, 2020.

The company is expected to report earnings of $1.42/share on revenue of $1.053 billion. The consensus earnings per share (EPS) of $1.42/share is based on a poll of 10 analysts and represents a growth in eps of 5.5% over the same quarter last year, when the company reported earnings of $1.35/share.

The revenue forecast of $1.053 billion based on a poll of 9 analysts implies a year-over-year (YoY) growth in revenue of 4.0%. Last year the company reported $1.012 billion in revenue for the quarter.

Expected to report EPS growth of 5.5% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $1,052.63 $1,011.66 4.0%
EPS $1.42 $1.35 5.5%

Earnings Call Trends

Historically, management has exceeded analyst expectations 4 out of the last 8 tracked quarters, missed 3 quarters, and met expectations 1 quarters.

What are your expectations from Landstar System, Inc. for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $0.73 $0.98 34.8% Beat
Q1, 2020 $1.10 $1.04 −5.4% Missed
Q4, 2019 $1.42 $1.27 −10.3% Missed
Q3, 2019 $1.41 $1.35 −4.0% Missed
Q2, 2019 $1.53 $1.53 −0.3% Missed
Q1, 2019 $1.51 $1.58 4.6% Beat
Q4, 2018 $1.58 $1.68 6.3% Beat
Q3, 2018 $1.60 $1.63 1.9% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 27, 2020, the stock price did not react much to the update.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
July 22, 2020 $121.78 $121.91 0.1% Increase
April 22, 2020 $98.15 $101.75 3.7% Increase
January 29, 2020 $112.08 $112.50 0.4% Increase
October 23, 2019 $115.64 $114.99 −0.6% Decline

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −3.18, the model suggests that the company is not likely to be an earnings manipulator. A value of −3.18 implies a 0.1% chance of earnings manipulation.

Fundamentals And Technical Analysis

Landstar System, Inc. is currently trading at $129.78/share, down −0.6% for the day. The company is trading at approximately 93.2% of its 52-week high of $139.99/share. The company’s stock price is up 6.5% since the last earnings report and down −2.2% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 48.91 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NasdaqGS:LSTR Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 29.76 and a forward P/E multiple of 28.55.

Landstar System, Inc.’s current share price also implies a price-to-book (P/B) multiple of 7.72. The following table summarizes some other key fundamental ratios:

Data as of October 19, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 27, 2020
Stock Price (Current) $129.78
P/E Ratio 29.8x
P/E Ratio (Fwd) 28.6x
PEG Ratio −0.9
Total Debt / Total Capital 2.6%
Levered Free Cash Flow $294.3 million
EV / EBITDA 17.9x

Finbox

Landstar System, Inc. is a mid-cap stock with a market capitalization of $5.013 billion and a total enterprise value of $4.868 billion. The company operates in the Industrials sector and the Road & Rail industry.

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 and less-than-truckload service providers. It provides truck services through dry and specialty vans of various sizes, unsided/platform trailers, temperature-controlled vans, and containers; rail intermodal services through contracts with domestic and Canadian railroads; and air and ocean services through contracts with domestic and international airlines and ocean lines. This segment serves the automotive products, building products, metals, chemicals, foodstuffs, heavy machinery, retail, electronics, and military equipment industries. The Insurance segment reinsures certain risks of the company’s independent contractors. The company markets its services through independent commission sales agents and third party capacity providers. Landstar System, Inc. was incorporated in 1991 and is headquartered in Jacksonville, Florida.

Expertise: financial technology, analyzing market trends. Brian is a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to research stock fundamentals. Brian’s background is in physics & computer science and previously worked as a software engineer at GE Healthcare. He enjoys applying his expertise in technology to help find market trends that impact investors. Brian can be reached at brian@finbox.io or at +1 (516) 778-6257.

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