EXPD Expeditors International
Quality asset-light broker, but the market still pays supercycle multiples for trough-cycle earnings.
The story
Expeditors is an asset-light global freight forwarder and customs broker, monetizing scale, carrier relationships, and IT systems rather than owning ships or planes. Its brand and broker network give it durable but modest competitive advantage in a fragmented, price-competitive industry. Revenue and margins are still normalizing down from the 2021-22 freight-rate supercycle toward a more ordinary, mid-cycle economics, with growth decelerating even as headline sentiment stays bullish.
Sales-to-capital raised from 3.5 to 4.5 to reflect the TTM actual of 4.75 for this genuinely asset-light brokerage model; beta nudged from 0.95 to 1.0 toward the 1.05 industry anchor; y1 growth trimmed slightly (3%→2.5%) since TTM revenue growth has decelerated to ~1% even as margins keep compressing (10.7%→9.5%), reinforcing the prior thesis rather than reversing it.
Value drivers
| Revenue growth (Y1) | 2.5% |
| Terminal growth | 2.5% |
| Forecast horizon | 5y |
| Target operating margin | 8.5% |
| Years to target margin | 5 |
| Sales-to-capital | 4.50 |
| Beta | 1.00 |
| Failure probability | 1.0% |
| Cost of capital (WACC) | 9.2% |
| Terminal WACC | 9.2% |
Valuation bridge
| PV of explicit FCFF | 2.85B |
| PV of terminal value | 6.57B |
| Equity value | 10.62B |
| ÷ shares → per share | $81.22 |
News
bullish +0.30 · 8 articles
- Expeditors International of Washington and Agnico Eagle Mines have been highlighted as Zacks Bull and Bear of the Day
- Bull of the Day: Expeditors Intl (EXPD)
- DHLGY or EXPD: Which Is the Better Value Stock Right Now?
- JetBlue Boosts Customer Convenience With ClarityPay Financing
- Expeditors International of Washington, Inc. (EXPD) Hit a 52 Week High, Can the Run Continue?
- Expeditors International's Quarterly Earnings Preview: What You Need to Know
- Are You Looking for a Top Momentum Pick? Why Expeditors International (EXPD) is a Great Choice
- Expeditors International Of Washington (EXPD) Stock Trades Above Fair Value On A 61% Run
Projected free cash flow to the firm
| Yr | Revenue | Growth | Margin | NOPAT | Reinvest | FCFF | PV |
|---|---|---|---|---|---|---|---|
| 1 | 11.47B | 2.5% | 9.4% | 802.91M | 62.14M | 740.77M | 678.34M |
| 2 | 11.75B | 2.5% | 9.2% | 802.59M | 63.70M | 738.90M | 619.60M |
| 3 | 12.05B | 2.5% | 9.0% | 801.76M | 65.29M | 736.47M | 565.52M |
| 4 | 12.35B | 2.5% | 8.7% | 800.38M | 66.92M | 733.46M | 515.75M |
| 5 | 12.66B | 2.5% | 8.5% | 798.43M | 68.59M | 729.83M | 469.95M |
Key risks
- Global trade/tariff disruption compressing freight volumes and pricing power
- Continued margin reversion below the 8.5% target as carrier capacity normalizes further
- Customer concentration and rate competition from larger integrated logistics players
Catalysts
- Freight volume and rate recovery as inventory destocking cycle ends
- Continued buybacks supported by net-cash balance sheet lifting EPS
- Market share gains from IT/digital forwarding investments