Value
4.5/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 2.5 |
| P/S | 9.5 |
| EV/EBITDA | 0.0 |
| Fwd P/E | 5.0 |
| PEG | 5.5 |
| Analyst target | 4.0 |
- ▸Forward P/E: 24.9x
- ▸PEG: 1.37
LSTR · Why this verdict
Why Landstar System (LSTR) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score5.3/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Landstar System generates free cash flow at 148% of net income and carries a strong financial health score, but the stock sits just below its resistance ceiling with a reward-to-risk ratio of 0.32 to 1, back-to-back earnings misses in the two most recent periods before the latest quarter, and elevated put-to-call positioning — the setup favors watching rather than buying.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Free cash flow converts at 148% of net income — well above reported earnings — and a Piotroski financial health score of 8 out of 9 confirms sound balance-sheet discipline; however, the business carries thin operating margins that leave limited buffer if revenue softens. Quality breakdown | Free-cash-flow-to-net-income ratio stays above 100% while operating margins expand above 5% over the next four quarters. | →Stable |
| CounterThin margins and below-average quality suggest this is not a high-return franchise; the strong cash conversion may reflect low capital intensity during a period of lower freight volumes rather than a durable structural advantage. | ||
The company produced back-to-back earnings misses in two consecutive quarters — including one miss of 31% below consensus — before returning to a modest 3.2% beat most recently, an uneven record that reflects demand volatility and limited ability to reliably manage to expectations over a full cycle. Earnings | Execution improves when EPS beats consensus in 3 of any 4 consecutive quarters with a positive average surprise. | ↓Deteriorating |
| CounterThe most recent quarter delivered a beat, and if freight market conditions stabilize, the prior miss quarters may prove to be cycle-driven anomalies rather than a structural forecasting problem. | ||
The stock sits just 2.1% below its near-term resistance target while carrying a reward-to-risk ratio of 0.32 to 1 — less than one-quarter of the threshold typically required for a sound entry — leaving investors with minimal upside relative to the cushion available on the downside. Price targets | This improves when the price pulls back to a level where upside to the resistance target of $223.89 exceeds 15%, which would require the stock to trade below approximately $195. | Tripped→Stable |
| CounterIf freight market conditions and earnings improve materially, the resistance target can be re-set higher, restoring favorable geometry without requiring a price pullback. | ||
An elevated put-to-call ratio of 1.62 and high implied volatility signal that the options market is pricing significant downside risk, which historically coincides with or precedes periods of stock price weakness. Risk breakdown | Skepticism resolves when the put-to-call ratio falls below 0.8 and sustains that level for at least 4 consecutive weeks. | →Stable |
| CounterElevated put demand can reflect hedging by existing holders rather than fresh short positioning; if no negative catalyst materializes, the hedges can expire worthless and the overhang lifts quickly. | ||
Free cash flow converts at 148% of net income — well above reported earnings — and a Piotroski financial health score of 8 out of 9 confirms sound balance-sheet discipline; however, the business carries thin operating margins that leave limited buffer if revenue softens.
→StableQuality breakdown
- Expectation
- Free-cash-flow-to-net-income ratio stays above 100% while operating margins expand above 5% over the next four quarters.
CounterThin margins and below-average quality suggest this is not a high-return franchise; the strong cash conversion may reflect low capital intensity during a period of lower freight volumes rather than a durable structural advantage.
The company produced back-to-back earnings misses in two consecutive quarters — including one miss of 31% below consensus — before returning to a modest 3.2% beat most recently, an uneven record that reflects demand volatility and limited ability to reliably manage to expectations over a full cycle.
↓DeterioratingEarnings
- Expectation
- Execution improves when EPS beats consensus in 3 of any 4 consecutive quarters with a positive average surprise.
CounterThe most recent quarter delivered a beat, and if freight market conditions stabilize, the prior miss quarters may prove to be cycle-driven anomalies rather than a structural forecasting problem.
The stock sits just 2.1% below its near-term resistance target while carrying a reward-to-risk ratio of 0.32 to 1 — less than one-quarter of the threshold typically required for a sound entry — leaving investors with minimal upside relative to the cushion available on the downside.
Tripped→StablePrice targets
- Expectation
- This improves when the price pulls back to a level where upside to the resistance target of $223.89 exceeds 15%, which would require the stock to trade below approximately $195.
CounterIf freight market conditions and earnings improve materially, the resistance target can be re-set higher, restoring favorable geometry without requiring a price pullback.
An elevated put-to-call ratio of 1.62 and high implied volatility signal that the options market is pricing significant downside risk, which historically coincides with or precedes periods of stock price weakness.
→StableRisk breakdown
- Expectation
- Skepticism resolves when the put-to-call ratio falls below 0.8 and sustains that level for at least 4 consecutive weeks.
CounterElevated put demand can reflect hedging by existing holders rather than fresh short positioning; if no negative catalyst materializes, the hedges can expire worthless and the overhang lifts quickly.
Per-dimension breakdown
Quality
4.5/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 5.0 |
| ROA | 4.9 |
| Gross margin | 0.0 |
| Op margin | 1.8 |
| Net margin | 1.3 |
| Current ratio | 6.5 |
| FCF quality | 5.6 |
| Moat | 6.9 |
| Piotroski F | 8.9 |
- ▸Earnings quality warning: 73% FCF/NI
- ▸Strong Piotroski F-Score: 8/9
Growth
6.5/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 7.0 |
| EPS growth | 6.0 |
Momentum
6.9/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 7.0 |
| Volume | 1.8 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
5.2/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 5.5 |
| erm sentiment | 5.3 |
Insider
5.2/10data confidence 100%| Component | Sub-score |
|---|---|
| materiality | 4.5 |
| insider conviction | 2.0 |
| holder change | 9.2 |
| notable moves | 5.0 |
- ▸Modest insider selling — $2,750,328 (0.043% of mkt cap)
- ▸Institutions accumulating
Peer rank
4.8/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 1.5 |
| quality rank | 4.0 |
| growth rank | 5.4 |
- ▸Conservative debt levels
Technical
5.5/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 4.6 |
| support resistance | 5.2 |
| 52w position | 6.6 |
Risk (lower is worse)
7.1/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.2 |
| days to cover | 7.8 |
| volatility | 3.7 |
| put call | 10.0 |
| implied vol | 4.2 |
| beta | 7.7 |
| debt equity | 9.3 |
Catalyst
3.5/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 0.0 |
| earnings timing | 5.0 |
| surprise avg | 0.0 |
| dividend safety | 7.5 |
- ▸Earnings concerns: 1B/3M
- ▸Dividend aristocrat: 0.9% yield
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (7)
- MOMENTUM:6.9>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:72d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-0.6=NEGATIVE
Warning (0)
none
Reward-to-Risk
-0.59
Upside
-7.1%
Downside
11.9%
Sizing output
AVOID
SetupRange Bound — RSI 49 mid-range, Bollinger mid-band
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
The F-path SELL output reflects an overall score of 5.3 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Risk (lower is worse) at 7.1) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:-0.6=NEGATIVE) reinforce the read. Current asymmetry R:R is -0.59 — supplementary context, not the trigger for this path.
The strongest dimensions are Risk (lower is worse) at 7.1, Momentum at 6.9, and Growth at 6.5; the weakest are Catalyst at 3.5, Quality at 4.5, and Value at 4.5. The V9 engine flagged 1 failed gate, producing an asymmetric reward-to-risk of -0.59 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Unattractive Risk Reward GeometryTripped
Trip ifStock price falls below $195, creating more than 15% upside to the resistance target of $223.89.
- P2Inconsistent Earnings Delivery
Trip ifEPS surprise exceeds 0% in 3 of the next 4 consecutive quarters with a positive average surprise across those periods.
- P3Strong Cash Conversion Thin Margins
Trip ifFree-cash-flow-to-net-income ratio falls below 80% for 2 consecutive quarters, removing the cash conversion advantage.
- P4Bearish Options Market Positioning
Trip ifPut-to-call ratio falls below 0.8 for 4 consecutive weeks.