Unveiling the Investment Potential of C.H. Robinson Worldwide Inc (CHRW): A Comprehensive Analysis
C.H. Robinson Worldwide Inc (NASDAQ:CHRW) has recently been in the spotlight, drawing interest from investors and financial analysts due to its robust financial stance. With shares currently priced at $88.35, C.H. Robinson Worldwide Inc has witnessed a decline of 2.3% over a period, marked against a three-month change of -6.27%. A thorough analysis, underlined by the GuruFocus Score Rating, suggests that C.H. Robinson Worldwide Inc is well-positioned for substantial growth in the near future.
Understanding the GF Score
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
Here is a breakdown of C.H. Robinson Worldwide Inc's GF Score:
1. Financial strength rank: 6/10
2. Profitability rank: 9/10
3. Growth rank: 10/10
4. GF Value rank: 6/10
5. Momentum rank: 5/10
Each one of these components is ranked and the ranks also have positive correlation with the long term performances of stocks. The GF score is calculated using the five key aspects of analysis. Through backtesting, we know that each of these key aspects has a different impact on the stock price performance. Thus, they are weighted differently when calculating the total score. With a high profitability rank and an impressive growth rank, GuruFocus assigned C.H. Robinson Worldwide Inc the GF Score of 92 out of 100, which signals the highest outperformance potential.
Introduction to C.H. Robinson Worldwide Inc
C.H. Robinson is a top-tier non-asset-based third-party logistics provider with a significant focus on domestic freight brokerage, which reflects mostly truck brokerage but also rail intermodal. Additionally, the firm operates a large air and ocean forwarding division, which has grown organically and via tuck-in acquisitions over the years. The remainder of revenue consists of the European truck-brokerage division, transportation management services, and a legacy produce-sourcing operation. With a market cap of $10.29 billion and sales of $20.12 billion, the company has an operating margin of 3.71%.
Financial Strength Analysis
According to the Financial Strength rating, C.H. Robinson Worldwide Inc's robust balance sheet exhibits resilience against financial volatility, reflecting prudent management of capital structure. The Interest Coverage ratio for C.H. Robinson Worldwide Inc stands impressively at 7.1, underscoring its strong capability to cover its interest obligations. With an Altman Z-Score of 7.24, C.H. Robinson Worldwide Inc exhibits a strong defense against financial distress. With a favorable Debt-to-Revenue ratio of 0.1, C.H. Robinson Worldwide Inc's strategic handling of debt solidifies its financial health.
Profitability Rank Breakdown
The Profitability Rank shows C.H. Robinson Worldwide Inc's impressive standing among its peers in generating profit. C.H. Robinson Worldwide Inc's strong Predictability Rank of 4.0 stars out of five underscores its consistent operational performance, providing investors with increased confidence.
Growth Rank Breakdown
Ranked highly in Growth, C.H. Robinson Worldwide Inc demonstrates a strong commitment to expanding its business. The company's 3-Year Revenue Growth Rate is 20.4%, which outperforms better than 81.26% of 907 companies in the Transportation industry. Moreover, C.H. Robinson Worldwide Inc has seen a robust increase in its earnings before interest, taxes, depreciation, and amortization (EBITDA) over the past few years. Specifically, the three-year growth rate stands at 18.3, and the rate over the past five years is 9.7. This trend accentuates the company's continued capability to drive growth.
Conclusion
Given the company's robust financial strength, impressive profitability, and strong growth metrics, the GuruFocus Score Rating highlights C.H. Robinson Worldwide Inc's unparalleled position for potential outperformance. This analysis suggests that C.H. Robinson Worldwide Inc is a promising investment opportunity for value investors seeking substantial growth in the near future.
GuruFocus Premium members can find more companies with strong GF Scores using the following screener link: GF Score Screen
This article first appeared on GuruFocus.
