Why Landstar System (LSTR) Stock Is Higher Today

NEW YORK (TheStreet) -- Landstar System Inc (LSTR) stock is up 3.16% to $70.13 today after the company said revenue in the first two months of its third quarter increased by more than 20% from the same period of last year due to positive operating trends in its mid-quarter update.

The transportation company said its full year revenue guidance of $3 billion should be achieved and sees no change in positive momentum for the remainder of year.

Landstar System added that it is comfortable with its third quarter earnings range of 78 cents per share to 82 cents per share, in line with the consensus estimate of 80 cents per share.

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Separately, TheStreet Ratings team rates LANDSTAR SYSTEM INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

"We rate LANDSTAR SYSTEM INC (LSTR) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, compelling growth in net income, increase in stock price during the past year and growth in earnings per share. We feel these strengths outweigh the fact that the company shows low profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 8.8%. Since the same quarter one year prior, revenues rose by 20.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • LSTR's debt-to-equity ratio is very low at 0.26 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, LSTR has a quick ratio of 1.73, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Road & Rail industry average. The net income increased by 18.1% when compared to the same quarter one year prior, going from $30.43 million to $35.93 million.
  • The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • LANDSTAR SYSTEM INC has improved earnings per share by 25.0% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, LANDSTAR SYSTEM INC reported lower earnings of $2.36 versus $2.77 in the prior year. This year, the market expects an improvement in earnings ($2.98 versus $2.36).
  • You can view the full analysis from the report here: LSTR Ratings Report

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