We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Here's Why You Should Sell Landstar (LSTR) Stock Right Now
Read MoreHide Full Article
Landstar System, Inc. (LSTR - Free Report) is mired in multiple headwinds, which, we believe, have made it an unimpressive investment option.
Delving Deeper
An Underperformer: A glimpse into the company’s price trend reveals that the stock has underperformed its industry year to date. Shares of LSTR have gained 14.7% year to date compared with the 29.8% jump of the industry it belongs to.
Image Source: Zacks Investment Research
Southward Earnings Estimate Revisions: The Zacks Consensus Estimate for current-quarter earnings has been revised 16.2% downward over the past 90 days. For the current year, the consensus mark has moved 8.7% south in the same time frame. The unfavorable estimate revisions indicate brokers’ lack of confidence in the stock.
Bearish Industry Rank: The industry to which LSTR belongs currently has a Zacks Industry Rank of 243 (of 250 plus groups). Such an unfavorable rank places LSTR in the bottom 1% of the Zacks industries. Studies show that 50% of a stock price movement is directly related to the performance of the industry group it belongs to.
A mediocre stock within a strong group is likely to outclass a robust stock in a weak industry. Therefore, reckoning the industry’s performance becomes imperative.
Weak Zacks Rank and Style Score: Landstar currently carries a Zacks Rank #4 (Sell). Moreover, LSTR’s current Momentum Style Score of F shows its short-term unattractiveness.
Other Headwinds: The gross profit margin was 10.4% of revenues in the first half of 2023 compared to 10.7% in the prior-year period. The gross profit margin declined in first-quarter 2022 and fourth-quarter 2021 on a year-over-year basis. Rising expenses are putting pressure on the margins.
Moreover, driver shortage continues to be a major challenge facing the trucking industry. As old drivers retire, trucking companies find it difficult to hire drivers since the job does not appeal to the younger generation. Further, escalating operating expenses, led by high fuel costs, are likely to have dented the prospects of the truck transport providers.
United Airlines has an expected earnings growth rate of more than 100% for the current year. UAL delivered a trailing four-quarter earnings surprise of 21.44%, on average.
The Zacks Consensus Estimate for UAL’s current-year earnings has improved 18.9% over the past 90 days. Shares of UAL have soared 34.5% year to date.
SkyWest's fleet modernization efforts are commendable.A fall in operating expenses is a tailwind for SkyWest. In second-quarter 2023, the metric dipped 2.4% to $693.8 million due to a fall in operating costs. Low operating expenses boost the company’s bottom-line results. Shares of SKYW have surged 144.6% year to date.
SKYW delivered a trailing four-quarter earnings surprise of 31.51%, on average.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Here's Why You Should Sell Landstar (LSTR) Stock Right Now
Landstar System, Inc. (LSTR - Free Report) is mired in multiple headwinds, which, we believe, have made it an unimpressive investment option.
Delving Deeper
An Underperformer: A glimpse into the company’s price trend reveals that the stock has underperformed its industry year to date. Shares of LSTR have gained 14.7% year to date compared with the 29.8% jump of the industry it belongs to.
Image Source: Zacks Investment Research
Southward Earnings Estimate Revisions: The Zacks Consensus Estimate for current-quarter earnings has been revised 16.2% downward over the past 90 days. For the current year, the consensus mark has moved 8.7% south in the same time frame. The unfavorable estimate revisions indicate brokers’ lack of confidence in the stock.
Bearish Industry Rank: The industry to which LSTR belongs currently has a Zacks Industry Rank of 243 (of 250 plus groups). Such an unfavorable rank places LSTR in the bottom 1% of the Zacks industries. Studies show that 50% of a stock price movement is directly related to the performance of the industry group it belongs to.
A mediocre stock within a strong group is likely to outclass a robust stock in a weak industry. Therefore, reckoning the industry’s performance becomes imperative.
Weak Zacks Rank and Style Score: Landstar currently carries a Zacks Rank #4 (Sell). Moreover, LSTR’s current Momentum Style Score of F shows its short-term unattractiveness.
Other Headwinds: The gross profit margin was 10.4% of revenues in the first half of 2023 compared to 10.7% in the prior-year period. The gross profit margin declined in first-quarter 2022 and fourth-quarter 2021 on a year-over-year basis. Rising expenses are putting pressure on the margins.
Moreover, driver shortage continues to be a major challenge facing the trucking industry. As old drivers retire, trucking companies find it difficult to hire drivers since the job does not appeal to the younger generation. Further, escalating operating expenses, led by high fuel costs, are likely to have dented the prospects of the truck transport providers.
Stocks to Consider
Investors interested in better-ranked stocks from the Zacks Transportation sector are United Airlines (UAL - Free Report) and SkyWest, Inc. (SKYW - Free Report) . United Airlines presently sports a Zacks Rank #1 (Strong Buy) and SkyWest carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
United Airlines has an expected earnings growth rate of more than 100% for the current year. UAL delivered a trailing four-quarter earnings surprise of 21.44%, on average.
The Zacks Consensus Estimate for UAL’s current-year earnings has improved 18.9% over the past 90 days. Shares of UAL have soared 34.5% year to date.
SkyWest's fleet modernization efforts are commendable.A fall in operating expenses is a tailwind for SkyWest. In second-quarter 2023, the metric dipped 2.4% to $693.8 million due to a fall in operating costs. Low operating expenses boost the company’s bottom-line results. Shares of SKYW have surged 144.6% year to date.
SKYW delivered a trailing four-quarter earnings surprise of 31.51%, on average.