Landstar System Continues to Grapple With Weak Freight Market

Zacks Equity Research

Mon, Mar 24, 2025, 11:40 AM 3 min read

LSTR is being hurt by reduced demand for freight services and increased truck capacity. Due to the demand weakness, shipment volumes and rates are low. The top line has been suffering mainly due to the below-par performance of its key segment, namely, truck transportation. Revenues are likely to be weak in the future as well. LSTR expects first-quarter 2025 truckloads to decline in the range of 2-7% on a year-over-year basis. Truck revenue per load is expected to be down 2% to up 3% on a year-over-year basis.

The truck industry, of which Landstar is an integral part, has been persistently battling a driver shortage for several years. As old drivers are retiring, trucking companies are finding it difficult to find new drivers to take their place since low-esteem jobs mostly do not appeal to the younger generation.

Partly due to these headwinds, shares of LSTR have plunged 18.5% over the past year compared with the transportation-truck industry’s 37.6% decline.

One-Year LSTR Stock Price Comparison

Image Source: Zacks Investment Research

Southward Earnings Estimate Revision: The Zacks Consensus Estimate for current-quarter earnings has moved 18.4% south in the past 90 days. For the current year, the consensus mark for earnings has been revised 14.8% downward in the same time frame. The unfavorable estimate revisions indicate brokers’ lack of confidence in the stock.

Weak Zacks Rank and Style Score: LSTR currently carries a Zacks Rank #4 (Sell). The company’s current Value Score of D shows its unattractiveness.

Negative Earnings Surprise History: LSTR has a disappointing earnings surprise history. The company’s earnings lagged the Zacks Consensus Estimate in two of the last four quarters (outpaced the mark in the remaining two quarters), delivering an average miss of 0.65%.

Bearish Industry Rank

The industry to which LSTR belongs currently has a Zacks Industry Rank of 171 (out of 248 groups). Such a weak rank places the industry in the bottom 31% of the Zacks industries. Studies have shown that 50% of a stock price movement is directly tied to the performance of the industry group that it hails from.

In fact, a robust stock in a weak industry is likely to underperform an ordinary stock in a strong group. Therefore, considering the industry’s performance becomes imperative.