Expeditors International Of Washington (EXPD) Earnings Beat Keeps Valuation Questions In Focus
Why Expeditors International of Washington Is Back in Focus
Expeditors International of Washington (EXPD) is drawing fresh attention after its Q2 earnings beat, as well as special commentary on the impacts of AI on logistics and a new U.S. customs enforcement executive order.
The recent Q2 beat and AI-focused logistics commentary have arrived as Expeditors International of Washington’s share price has climbed 23.6% year to date and 18.3% over 90 days, with a 1-year total shareholder return of 56.9% indicating building momentum.
Compare Expeditors International of Washington’s momentum and AI logistics angle with a curated set of transport and infrastructure peers, screened for quality using 50 high quality undervalued stocks.
Bulls point to Expeditors International of Washington’s strong Q2 showing, along with AI and customs catalysts. Bears focus on the sharp 1 year rerating and premium signals. Which side does the current valuation support?
Preferred P/E of 26.6x: Is it justified for Expeditors International of Washington?
The latest data points to Expeditors International of Washington trading on a P/E of 26.6x, which looks rich when set against peers and the recent share price strength.
The P/E ratio compares the current share price with earnings per share. For a logistics company like Expeditors International of Washington, it is a quick way to see how much investors are paying for each dollar of current earnings.
On the one hand, Expeditors International of Washington has high quality earnings and an outstanding Return on Equity of 43.4%. Earnings growth over the past year of 7.7% is also stronger than its 5 year average, which shows a period of earnings decline of 12.9% a year. On the other hand, earnings and revenue are both forecast to grow more slowly than the wider US market, and revenue is expected to grow at 3.1% a year, which is also slower than the 20% threshold sometimes used for high growth companies.
Against that backdrop, the 26.6x P/E stands well above both the peer average of 18.5x and the global logistics industry average of 15.2x. It is also higher than an estimated fair P/E of 17.6x, which is the level the market could move toward if sentiment and pricing lined up more closely with underlying fundamentals for Expeditors International of Washington.
Explore the SWS fair ratio for Expeditors International of Washington.
Result: Price-to-Earnings of 26.6x (OVERVALUED)
However, Expeditors International of Washington also faces risks from slower forecast revenue growth of 3.1% a year, as well as a current share price that is above the analyst target.
Find out about the key risks to this Expeditors International of Washington narrative.
Another View on Expeditors International of Washington’s Valuation
The SWS DCF model values Expeditors International of Washington at $168.91 per share, which is below the current price of $187.70. That implies the stock screens as overvalued on future cash flows, even though recent momentum has been strong. How much weight do you put on that gap?
Look into how the SWS DCF model arrives at its fair value.
Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Expeditors International of Washington for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 50 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.
Next Steps
Looking for more investment ideas beyond Expeditors International of Washington?
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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