In a sliding market, Landstar has defied the odds, trading up to $156.53 per share. Its 28.8% gain since September 2025 has outpaced the S&P 500’s 1% drop. This performance may have investors wondering how to approach the situation.
Is there a buying opportunity in Landstar, or does it present a risk to your portfolio? Check out our in-depth research report to see what our analysts have to say, it’s free.
Why Do We Think Landstar Will Underperform?
Despite the momentum, we're cautious about Landstar. Here are three reasons why LSTR doesn't excite us and a stock we'd rather own.
1. Long-Term Revenue Growth Disappoints
A company’s long-term performance is an indicator of its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Over the last five years, Landstar grew its sales at a sluggish 2.8% compounded annual growth rate. This was below our standards.
2. EPS Trending Down
We track the long-term change in earnings per share (EPS) because it highlights whether a company’s growth is profitable.
Sadly for Landstar, its EPS declined by 6.1% annually over the last five years while its revenue grew by 2.8%. This tells us the company became less profitable on a per-share basis as it expanded.
3. New Investments Fail to Bear Fruit as ROIC Declines
A company’s ROIC, or return on invested capital, shows how much operating profit it makes compared to the money it has raised (debt and equity).
We like to invest in businesses with high returns, but the trend in a company’s ROIC is what often surprises the market and moves the stock price. Unfortunately, Landstar’s ROIC has decreased significantly over the last few years. We like what management has done in the past, but its declining returns are perhaps a symptom of fewer profitable growth opportunities.
Final Judgment
We see the value of companies helping their customers, but in the case of Landstar, we’re out. With its shares topping the market in recent months, the stock trades at 29.4× forward P/E (or $156.53 per share). This multiple tells us a lot of good news is priced in - we think there are better stocks to buy right now. We’d recommend looking at the Amazon and PayPal of Latin America.
Stocks We Would Buy Instead of Landstar
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