Is Landstar stock a good buy?

In this article, we review Landstar stock to determine if it’s a good buy, sell, or hold.

Landstar is a company that provides logistics services in the US, Canada, and Mexico. They were founded in 1968 and are based out of Jacksonville, FL. The company has over 1,200 employees and over 10,000 owner-operator independent trucking contractors.

Tykr Rating
Landstar Business Model
Landstar News
Landstar Competition
Landstar 4Ms
Landstar Financials
Is Landstar stock a good buy?

Tykr Rating

Summary: Watch
Score: 18/20
MOS: 31%
Share Price: $150
Sticker Price: $219

Landstar Business Model

How does Landstar make money?

Landstar provides North America and Global logistics transportation services. Here is a breakdown of each.

North America

Truckload – Full semi-trucks.
Stepdeck, Heavy, and Specialized – Great for transporting heavy equipment such as cranes, mining equipment, and homes.
LTL (Less-than-truckload) – When you don’t need a full truck but need goods transported, this service will find a way to make it work.
Expedited & Emergency – The customer pays a premium but they’ll move products fast!
Border Crossing – They handle the paperwork when dealing with cross-border logistics.
Air Freight – This includes TSA-approved cargo airships.
Rail – Trains are still a tried and true way to move goods economically.
Hazmat – They enforce stringent compliance requirements that go beyond state and federal laws.
Temperature Controlled – Industries with temperature requirements include food, flowers, pharmaceutical, biotech, and more.

Global

Air Charter – 24/7/365 air charter services. They find the best prices for your global transportation needs.
International Air Freight – Door-to-door pickup and delivery at the global level.
Customs Brokerage – They will help you navigate the challenges of international trade.
Ocean Services – Cargo ships and sea containers
Project Cargo – They coordinate complex and large-scale transportation projects.

Landstar does not own any transportation or trucking equipment. They don’t pay for or maintain transportation equipment which equates to lower overhead expenses.

The company contracts with over 1,000 independent sales representatives who sign contracts or lease agreements with over 10,000 independent owner-operator trucking companies known as Business Capacity Owners (BCOs). 97% of the owner-operator trucking companies have five or fewer trucks.

Essentially, the sales reps find companies that need products moved. Landstar will then assign BCOs to jobs. Landstar collects the checks from the customer and thereafter pays the sales reps a commission and the BCOs a project fee or hourly rate. The BCOs earn about 65% – 75% of the revenue since they do most of the work and carry most of the liability. Overall, Landstar is the service provider and coordinator for North America and Global logistics.

Landstar News

This article from Zacks.com states that Landstar’s Q4 earnings exceeded expectations on both revenue and EPS. EPS reported $2.99 over expectations of $2.85 and revenue surged by 48% year-over-year. The divisions of the company with the highest growth included truck, rail, and ocean cargo.

This article from freightwaves.com states that Landstar achieved the highest all-time revenue per quarter in the companies history. The company also mentioned normal seasonality still hasn’t kicked in as there is no let-up with demand.

This article from zacks.com states that Landstar recently increased its quarterly dividend by 19%, signaling a continuous increase in their financial health.

This article from globaltrademag.com states the continuous improvements within the global logistics transportation industry including improved technology, faster deliveries, increased security, autonomous vehicles, adoption of the internet of things (IOT), and more. If you’re going to start a business, you might want to get into the logistics industry.

This article from globenewswire.com predicts the global logistics transportation industry will grow by 7.25% year over year through 2030. This is caused by the rising landscape of international trades as well as the much-needed areas of improvement including technology and security.

Landstar Competition

Landstar (LSTR)

Summary: Watch
Score: 18/20
MOS: 31%
Share Price: $150
Sticker Price: $219
Revenue: $6.54B

ArcBest Corporation (ARCB)

Summary: On Sale
Score: 16/20
MOS: 80%
Share Price: $86
Sticker Price: $433
Revenue: $2.94B

XPO Logistics (XPO)

Summary: Overpriced
Score: 7/20
MOS: 1%
Share Price: $68
Sticker Price: $69
Revenue: $12.81B

J.B. Hunt Transport Services (JBHT)

Summary: Watch
Score: 16/20
MOS: 1%
Share Price: $189
Sticker Price: $191
Revenue: $12B

Marten Transport (MRTN)

Summary: Watch
Score: 11/20
MOS: 1%
Share Price: $16
Sticker Price: $17
Revenue: $973M

Landstar 4Ms

MOS (Margin of Safety): The score of 18/20 shows the overall financials are very strong. The stock is currently Watch because the MOS is 31%. Ideally, we want to see a MOS of 50% or higher but in this case, there is some upside potential on the stock.

Meaning: The demand for global logistics transportation is hot. Small, mid-sized, and large corporations are able to sell to customers across the globe thanks to companies like Landstar. A key factor to pay attention to with the business model is Landstar does not own the transportation equipment which therefore reduces overhead costs. They specifically focus on providing the absolute best service. This allows the company to gain easier control over the profit margins which directly impact the net income and EPS. The logistics industry will see a lot of improvement, especially with technology over the coming decade and the services that Landstar provides will be an excellent compliment to these advancements.

Moat: There are public and private logistics transportation companies around the globe but fortunately the demand is extremely high. In this case, Landstar should not be concerned.

Management: Jim Gattoni has served as CEO since 2014. From 1987 to 1995 he worked as an auditor for KPMG. He then joined Landstar in 1995 as a corporate controller. In 2001 he was promoted to Vice President and Corporate Controller. In 2007 he was promoted to CFO. Since the 2008 recession, the share price has continuously increased without any major pullbacks other than the Covid dip in March of 2020. Since he’s joined as CEO, the stock has done extremely well. Gattoni certainly has a strong financial background which has been well reflected in the financials of the company.

Landstar Financials

Now let’s take a look at the financials to get us closer to determining if Landstar stock is a good buy. A good value investor should be able to read the income statement, cash flow statement, and balance sheet and within 60 seconds have a pretty good idea of how the business is performing.

Revenue (Found on the Income Statement)

2018: $4.6B
2019: $4B
2020: $4.1B
2021: $6.45B
Revenue has increased significantly in 2021.

Net Income (Found on the Income Statement)

2018: $255M
2019: $227M
2020: $192M
2021: $381M
Net Income has also increased consistently year-over-year.

EPS (Found on the Income Statement)

2018: 6.18
2019: 5.72
2020: 4.98
2021: 10.12
EPS has also significantly increased in 2021. A 103% jump in a year is quite impressive.

Free Cash Flow (Found on the Cash Flow Statement)

2018: $288M
2019: $288M
2020: $180M
2021: $276M
Free Cash Flow has also remained somewhat flat which is okay.

Total Assets (Found on the Balance Sheet)

2018: $1.3B
2019: $1.4B
2020: $1.6B
2021: $2B
Total Assets have consistently increased.

Total Liabilities (Found on the Balance Sheet)

2018: $693M
2019: $706M
2020: $961M
2021: $1.18B
The Total Liabilities have increased which is okay.

Total Debt (Found on the Balance Sheet)

2018: $183M
2019: $166M
2020: $175M
2021: $111M
The debt has declined by over 30%. This is impressive.

Total Equity (Found on the Balance Sheet)

2018: $686M
2019: $721M
2020: $691M
2021: $862M
The Total Equity has increased in 2021 which is a great sign.