Unveiling the Investment Potential of Expeditors International of Washington Inc (EXPD): A ...
Expeditors International of Washington Inc (NASDAQ:EXPD) has recently been in the spotlight, drawing interest from investors and financial analysts due to its robust financial stance. With shares currently priced at $116.45, Expeditors International of Washington Inc has witnessed a decline of 1.55% over a period, marked against a three-month change of -0.71%. A thorough analysis, underlined by the GuruFocus Score Rating, suggests that Expeditors International of Washington Inc is well-positioned for substantial growth in the near future.
Decoding 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.
Expeditors International of Washington Inc has been assigned the following ranks:
Financial strength rank: 9/10
Profitability rank: 9/10
Growth rank: 10/10
GF Value rank: 3/10
Momentum rank: 10/10
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 high ranks in financial strength, profitability, and growth, but a slightly lower GF Value rank, GuruFocus assigned Expeditors International of Washington Inc the GF Score of 92 out of 100, which signals the highest outperformance potential.
Understanding Expeditors International of Washington Inc's Business
Expeditors International of Washington Inc is a non-asset-based third-party logistics provider, mainly focused on international freight forwarding. It employs sophisticated IT systems and contracts with airlines and ocean carriers to move customers' freight across the globe. The firm operates more than 200 full-service office locations worldwide, in addition to numerous satellite locations. In 2022, Expeditors derived 34% of consolidated net revenue from airfreight, 30% from ocean freight, and 36% from customs brokerage and other services. With a market cap of $17.22 billion and sales of $12.64 billion, the company has an operating margin of 10.93%.
Financial Strength Breakdown
According to the Financial Strength rating, Expeditors International of Washington Inc's robust balance sheet exhibits resilience against financial volatility, reflecting prudent management of capital structure.
The Interest Coverage ratio for Expeditors International of Washington Inc stands impressively at 54.62, underscoring its strong capability to cover its interest obligations. This robust financial position resonates with the wisdom of legendary investor Benjamin Graham, who favored companies with an interest coverage ratio of at least 5.
With an Altman Z-Score of 10.39, Expeditors International of Washington Inc exhibits a strong defense against financial distress, highlighting its robust financial stability.
With a favorable Debt-to-Revenue ratio of 0.04, Expeditors International of Washington Inc's strategic handling of debt solidifies its financial health.
Profitability Rank Breakdown
The Profitability Rank shows Expeditors International of Washington Inc's impressive standing among its peers in generating profit.
Expeditors International of Washington Inc Operating Margin has increased (9.18%) over the past five years, as shown by the following data: 2018: 9.79; 2019: 9.65; 2020: 9.81; 2021: 11.56; 2022: 10.69; .
Furthermore, Expeditors International of Washington Inc's Gross Margin has seen a consistent rise over the past five years, as evidenced by the data: 2018: 12.54; 2019: 12.55; 2020: 12.13; 2021: 13.11; 2022: 12.72; . This trend underscores the company's growing proficiency in transforming revenue into profit.
Growth Rank Breakdown
Ranked highly in Growth, Expeditors International of Washington Inc demonstrates a strong commitment to expanding its business.
The company's 3-Year Revenue Growth Rate is 31.6%, which outperforms better than 89.88% of 909 companies in the Transportation industry
Moreover, Expeditors International of Washington 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 35.4, and the rate over the past five years is 25.9. This trend accentuates the company's continued capability to drive growth.
Conclusion
With its strong financial strength, profitability, and growth metrics, the GuruFocus Score Rating highlights Expeditors International of Washington Inc's unparalleled position for potential outperformance. This analysis underscores the company's robust financial health, impressive profitability, and consistent growth, making it a compelling investment opportunity for value investors.
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.
