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Here's Why Investors Should Give Landstar Stock a Miss Now
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Key Takeaways
LSTR faces low volumes and rates due to reduced freight demand and surplus truck capacity.
Persistent inflation and rising labor and material costs threaten future profitability.
LSTR stock is down 26% YTD, underperforming the transportation-truck industry's 19.5% drop.
Landstar System, Inc. (LSTR - Free Report) is currently mired in multiple headwinds, which, we believe, have made it an unimpressive investment option.
Let’s delve deeper.
LSTR: Key Risks to Watch
Southward Earnings Estimate Revision: The Zacks Consensus Estimate for fourth-quarter 2025 earnings has moved 8.70% south in the past 60 days. For the current year, the consensus mark for earnings has been revised to 3.40% downward in the same time frame. The unfavorable estimate revisions indicate brokers’ lack of confidence in the stock.
Image Source: Zacks Investment Research
Dim Price Performance: The company’s price trend reveals that its shares have lost 24% so far this year compared with the transportation-truck industry’s 19.5% decline.
LSTR Stock YTD Price Comparison
Image Source: Zacks Investment Research
Weak Zacks Rank and Style Score:LSTR currently carries a Zacks Rank #5 (Strong Sell). The company’s current Value Score of C shows its unattractiveness.
Negative Earnings Surprise History: LSTR has a disappointing earnings surprise history. The company’s earnings lagged the Zacks Consensus Estimate in three of the last four quarters (outpaced the mark in the remaining quarter), delivering an average miss of 2.36%.
Image Source: Zacks Investment Research
Earnings Expectations: Downbeat earnings expectations cast a shadow over a company’s prospects. For fourth-quarter 2025, LSTR’s earnings are expected to decline 3.82% year over year. For 2025, LSTR’s earnings are expected to decline 17.6% year over year.
Other Headwinds:LSTR is being hurt by reduced demand for freight services and increased truck capacity. Due to the demand weakness, shipment volumes and rates are low. The top line has been suffering mainly due to the below-par performance of its key segment, namely, truck transportation. Revenues are likely to be weak in the future as well.
The truck industry, of which Landstar is an integral part, has been persistently battling a driver shortage for several years. As old drivers are retiring, trucking companies are finding it challenging to find new drivers to take their place since the low-esteem job mostly does not appeal to the younger generation.
The still-high inflation reading continues to hurt consumer sentiment and growth expectations. With labor and material costs showing no signs of letting off, the ability to pass these increases through to the consumer will determine the profitability of trucking companies like LSTR.
Bearish Industry Rank
The industry to which LSTR belongs currently has a Zacks Industry Rank of 288 (out of 248 groups). Such a weak rank places the industry in the bottom 6% of the Zacks industries. Studies have shown that 50% of a stock price movement is directly tied to the performance of the industry group that it hails from.
In fact, a robust stock in a weak industry is likely to underperform an ordinary stock in a strong group. Therefore, considering the industry’s performance becomes imperative.
EXPD has an expected earnings growth rate of 2.3% for the current year. The company has an encouraging earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average beat of 13.94%.
SKYW currently carries a Zacks Rank #2.
SkyWest has an expected earnings growth rate of 33% for the current year. The company has an encouraging earnings surprise history. Its earnings topped the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average beat of 21.24%.
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Here's Why Investors Should Give Landstar Stock a Miss Now
Key Takeaways
Landstar System, Inc. (LSTR - Free Report) is currently mired in multiple headwinds, which, we believe, have made it an unimpressive investment option.
Let’s delve deeper.
LSTR: Key Risks to Watch
Southward Earnings Estimate Revision: The Zacks Consensus Estimate for fourth-quarter 2025 earnings has moved 8.70% south in the past 60 days. For the current year, the consensus mark for earnings has been revised to 3.40% downward in the same time frame. The unfavorable estimate revisions indicate brokers’ lack of confidence in the stock.
Dim Price Performance: The company’s price trend reveals that its shares have lost 24% so far this year compared with the transportation-truck industry’s 19.5% decline.
LSTR Stock YTD Price Comparison
Weak Zacks Rank and Style Score:LSTR currently carries a Zacks Rank #5 (Strong Sell). The company’s current Value Score of C shows its unattractiveness.
Negative Earnings Surprise History: LSTR has a disappointing earnings surprise history. The company’s earnings lagged the Zacks Consensus Estimate in three of the last four quarters (outpaced the mark in the remaining quarter), delivering an average miss of 2.36%.
Earnings Expectations: Downbeat earnings expectations cast a shadow over a company’s prospects. For fourth-quarter 2025, LSTR’s earnings are expected to decline 3.82% year over year. For 2025, LSTR’s earnings are expected to decline 17.6% year over year.
Other Headwinds:LSTR is being hurt by reduced demand for freight services and increased truck capacity. Due to the demand weakness, shipment volumes and rates are low. The top line has been suffering mainly due to the below-par performance of its key segment, namely, truck transportation. Revenues are likely to be weak in the future as well.
The truck industry, of which Landstar is an integral part, has been persistently battling a driver shortage for several years. As old drivers are retiring, trucking companies are finding it challenging to find new drivers to take their place since the low-esteem job mostly does not appeal to the younger generation.
The still-high inflation reading continues to hurt consumer sentiment and growth expectations. With labor and material costs showing no signs of letting off, the ability to pass these increases through to the consumer will determine the profitability of trucking companies like LSTR.
Bearish Industry Rank
The industry to which LSTR belongs currently has a Zacks Industry Rank of 288 (out of 248 groups). Such a weak rank places the industry in the bottom 6% of the Zacks industries. Studies have shown that 50% of a stock price movement is directly tied to the performance of the industry group that it hails from.
In fact, a robust stock in a weak industry is likely to underperform an ordinary stock in a strong group. Therefore, considering the industry’s performance becomes imperative.
Stocks to Consider
Investors interested in the Zacks Transportation sector may also consider Expeditors International of Washington (EXPD - Free Report) and SkyWest (SKYW - Free Report) .
EXPD currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
EXPD has an expected earnings growth rate of 2.3% for the current year. The company has an encouraging earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average beat of 13.94%.
SKYW currently carries a Zacks Rank #2.
SkyWest has an expected earnings growth rate of 33% for the current year. The company has an encouraging earnings surprise history. Its earnings topped the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average beat of 21.24%.