LSTR
Landstar System, Inc.
$166.98
Stable Earnings Power
40%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 51.2% above fair value
You pay
$166.98
Bear
$88.32
Fair
$110.40
Bull
$132.48
Bear
$88.32
-47.1%
$7.36 × 12x P/E
Fair
$110.40
-33.9%
$7.36 × 15x P/E
Bull
$132.48
-20.7%
$7.36 × 18x P/E
Adjust Assumptions
15.0x
7.36$
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
22.7x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (33 analysts)
$200.40
Divergence from AlphaVal
45%
Summary
Applying a 15x P/E to adjusted EPS of $7.36, the base-case value is $110.40 per share. DDM cross-check: $57.53.
Warnings
The company's reported profits differ from official accounting profits by 122%. Check what costs are being left out of the adjusted number.
The company pays out 98% of its profits as dividends. That leaves little cushion — the dividend could be cut if business slows down.
Dividend-based valuation: $57.53 (below our primary estimate by 48%). Large gaps may signal the dividend doesn't reflect full earning power.
Wall Street's average price target is $200.40 (from 33 analysts). Our estimate is 45% below the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples