CHRW C.H. Robinson
Best-in-class freight broker, but the market already prices in a full-cycle margin recovery.
The story
C.H. Robinson is the largest scaled freight broker, with a dense shipper-carrier network and data advantages, but it remains tied to cyclical freight volumes and brokerage spreads. The company is in a mature recovery phase after a freight downturn, with AI and productivity initiatives helping margins but not transforming the economics into a high-moat compounder.
I am keeping the prior drivers because the new facts show a continued margin recovery, not a structural change: TTM margin is back near 4.9% but revenue remains below prior-cycle levels. The 6.5% target margin assumes freight normalization and efficiency gains, while the 4.5 sales-to-capital ratio reflects an asset-light broker that still must reinvest in technology, working capital, and acquisitions to grow.
Value drivers
| Revenue growth (Y1) | 8.0% |
| Terminal growth | 3.0% |
| Forecast horizon | 8y |
| Target operating margin | 6.5% |
| Years to target margin | 5 |
| Sales-to-capital | 4.50 |
| Beta | 1.15 |
| Failure probability | 2.0% |
| Cost of capital (WACC) | 9.4% |
| Terminal WACC | 8.8% |
Valuation bridge
| PV of explicit FCFF | 4.28B |
| PV of terminal value | 9.04B |
| Equity value | 12.14B |
| ÷ shares → per share | $103.01 |
News
neutral -0.10 · 8 articles
- Montgomery lawsuit likely headed back to Illinois district court
- 3 Overrated Stocks We Find Risky
- Is C.H. Robinson (CHRW) Shifting From Defensive Mainstay To Growth-Focused, AI-Driven Scale Story?
- C.H. Robinson Worldwide (CHRW) Stock Looks Rich As It Absorbs $75m Logistics Deal
- Has CSX (CSX) Outpaced Other Transportation Stocks This Year?
- ARCB Gains From AI, Pricing Discipline and a Tighter Truckload Cycle
- ArcBest's Outlook Hinges on Pricing, Productivity and Mix
- C.H. Robinson out of Florida ‘U-turn’ lawsuit
Projected free cash flow to the firm
| Yr | Revenue | Growth | Margin | NOPAT | Reinvest | FCFF | PV |
|---|---|---|---|---|---|---|---|
| 1 | 17.49B | 8.0% | 5.2% | 742.14M | 287.98M | 454.16M | 415.00M |
| 2 | 18.77B | 7.3% | 5.5% | 845.01M | 283.25M | 561.76M | 469.06M |
| 3 | 20.00B | 6.6% | 5.9% | 952.54M | 274.09M | 678.45M | 517.65M |
| 4 | 21.17B | 5.9% | 6.2% | 1.06B | 260.36M | 803.03M | 559.88M |
| 5 | 22.26B | 5.1% | 6.5% | 1.18B | 241.99M | 933.97M | 595.02M |
| 6 | 23.25B | 4.4% | 6.5% | 1.23B | 219.10M | 1.01B | 587.36M |
| 7 | 24.11B | 3.7% | 6.5% | 1.27B | 191.90M | 1.08B | 575.45M |
| 8 | 24.84B | 3.0% | 6.5% | 1.31B | 160.75M | 1.15B | 559.55M |
Key risks
- Freight recession or weak truckload pricing delays revenue recovery
- Brokerage margin compression from competition and shipper procurement discipline
- AI and automation spending fails to produce sustainable productivity gains
Catalysts
- Freight cycle normalization lifts volumes and net revenue per shipment
- Cost actions and automation sustain operating margin expansion