Landstar System (LSTR) short, mcap=$5.5bn, price $148 vs $157

Short pitch:
– Highly cyclical trucking broker operating on Covid-driven peak economics.
– Historically high spot trucking rates created a windfall for LSTR.
– The next Covid winner to experience a rapid deterioration in its earnings as industry economics normalize.
– Antiquated trucking broker model adds further longer-term concerns.

Valuation: Trades at 15x peak earnings of 2021 and 30x pre-covid earnings.

Exp. gain: 40% to $90/share, on normalized EPS=$6 (vs $10 in 2021) and generous 16x multiple.

Full LSTR write-up (free guest account required):

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