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The most compelling operational opportunity lies in the continued expansion of high-margin customs brokerage, trade compliance, and specialized logistics consulting ($4,271,167,000 in FY2025 revenue).
Combined North and South Asia geographic revenue contracting by more than 5.0% year-over-year over an 18-month observation window.
We assign a Sell rating to Expeditors International of Washington with a Fair value of $117.88 per share, as the price of $190.80 on October 7, 2026 reflects an unsustainable 61.86% valuation premium over intrinsic cash-generating earnings power.
We rate Expeditors International of Washington as a Sell. For an ordinary equity investor, this rating means that new capital should not be committed to the shares, and existing equity positions should be liquidated or trimmed. While Expeditors is a high-quality, disciplined business that earns substantial economic profits over its cost of capital, market pricing has detached from fundamental cash flow economics, leaving investors exposed to severe capital losses as valuation multiples normalize.
The report was prepared at a price of $190.80 per share on October 7, 2026. Our valuation establishes an intrinsic Fair value of $117.88 per share and a Potential value of $127.57 per share. The report-date price of $190.80 stands at an implied return of -38.22% relative to Fair value, representing a 61.86% price premium. Even measured against our Potential value of $127.57, the price sits at a 49.56% premium, demonstrating that market sentiment is pricing in unrealistic long-term earnings growth.3
The primary risk that would accelerate fundamental downside is a cyclical contraction in transpacific freight volumes and shipping yields driven by protectionist trade barriers and tariff escalation across North Asia ($2,737,513,000 in FY2025 revenue) and South Asia ($1,555,189,000). If combined Asian origin revenues contract by more than 5.0% year-over-year, branch operating leverage reverses, compressing consolidated operating margins from 9.51% toward 6.50% and sharply curtailing free cash flow.456
The principal operational strength that could support business performance toward Potential value of $127.57 is the stability of high-margin customs brokerage and trade compliance services ($4,271,167,000 in FY2025 revenue). Because capital expenditures require less than 1% of revenue ($53,101,000 in FY2025), over 90% of operating cash flow converts into free cash flow ($953,400,000 in FY2025), allowing management to systematically retire shares and compound per-share earnings. However, this operational compounding is insufficient to bridge the wide gap to the report-date price of $190.80.3456
Expeditors purchases air and ocean capacity on an as-needed basis, restricting capital expenditures to $53,101,000 in FY2025 (0.48% of revenue) and converting 94.7% of operating cash flow into $953,400,000 of free cash flow.45
Customs brokerage and compliance services generated $4,271,167,000 in FY2025 (38.6% of revenue), embedding proprietary clearance software directly into client supply chains to generate resilient fee income.6
Sell: Expeditors is an exceptional asset-light compounder, but its $190.80 share price as of October 7, 2026 trades at a prohibitive 61.86% premium to intrinsic Fair value of $117.88.3
Expeditors International of Washington Inc. is a global non-asset logistics provider headquartered in Seattle, Washington. The company purchases cargo capacity dynamically from commercial airlines and ocean carriers on an as-needed basis rather than owning aircraft, container ships, or heavy surface fleets. It operates a worldwide network of independent branch offices that connects multinational enterprise shippers with consolidated freight transportation, customs clearance, order management, and warehousing solutions across global trade corridors.
The company operates through three principal service categories: customs brokerage and other services, airfreight services, and ocean freight and ocean services. In FY2025, customs brokerage and other services represented the largest business segment at $4,271,167,000 in revenue (38.6% of consolidated revenue), providing regulatory documentation, tariff classification, cargo insurance, temperature-controlled transit, and specialized consulting. Airfreight services contributed $3,982,882,000 (36.0% of revenue), while ocean freight and ocean services generated $2,814,960,000 (25.4% of revenue).
In a comprehensive stress test scenario combining severe tariff escalation across Asian gateways and freight rate deflation, Expeditors' consolidated revenue is modeled to contract by 5% annually across FY2026-FY2028 while operating margins compress from 9.51% in FY2025 to 6.50%. Even under this acute operational stress, Expeditors' non-asset business model prevents solvency risk or operating cash burn: capital expenditures remain minimal at approximately $53.1M and the company holds $1,314,285,000 in cash against only $570,589,000 in total debt, maintaining a net cash buffer of $743,696,000. However, intrinsic fair value contracts sharply, exposing equity investors purchasing at the analysis price of $190.80 to severe capital losses exceeding 43%.
Expeditors International of Washington possesses a narrow economic moat grounded in deep customer switching costs across its customs brokerage franchise and global network routing density across key manufacturing origin gateways. Rather than competing as an asset-heavy transportation provider, Expeditors acts as an indispensable non-asset orchestrator of global trade, procuring air and ocean capacity on demand while embedding its proprietary documentation and clearance software directly into multinational enterprise supply chains.
The core foundation of the company's competitive advantage resides in its customs brokerage and compliance services, which generated $4,271,167,000 in FY2025 revenue (38.6% of total revenue). Customs clearance involves complex cross-border documentation, tariff classification, trade compliance, and regulatory liability. Enterprise clients face substantial operational disruption and financial penalties if filings fail, creating profound reluctance to switch providers over minor fee differentials and decoupling brokerage revenues from underlying freight rate volatility.
Complementing customs brokerage is Expeditors' network density across primary export gateways, particularly in North Asia ($2,737,513,000 in FY2025 revenue) and South Asia ($1,555,189,000), connecting into destination nodes in the United States ($3,583,826,000) and Europe ($1,829,248,000). High shipment volumes allow Expeditors to consolidate less-than-container loads, negotiate advantageous tiered block space agreements with commercial airlines and maritime carriers, and deliver superior transit reliability. Because the business owns no vessels or aircraft, was limited to $53,101,000 in FY2025, translating to an of 34.13% that comfortably outstrips its cost of capital.
The highlighted cell is Fair value when every assumption sits at its base level ($117.88). Each row and column shows what Fair value becomes when one assumption moves.
Free cash flow to the firm stays positive in the first projected year at $815.0M after modeled reinvestment of $111.1M, with terminal value at 77.4% of enterprise value. A sudden drop in free cash flow is not projected unless capital spending relative to , reinvestment, or resets materially.
Even if operational volumes and net revenue expand beyond consensus expectations, the shares trade at $190.80 which represents an implied return of -38.2% relative to Fair value $117.88. Operational outperformance validates network resilience but does not bridge the wide valuation gap to justify a rating change.
Because specific industry-wide capex/revenue, fleet capacity additions, orderbook-to-fleet ratios, lead-time, and customer-concentration benchmark data is unavailable in the reported dataset, this cycle view is demand-led and evidence-limited. Expeditors' consolidated revenue contracted sharply from cyclical pandemic peaks of $17,071,284,000 in FY2022 to $9,300,110,000 in FY2023, before rebounding to $11,069,009,000 in FY2025, while operating income normalized from $1,824,371,000 to $1,052,546,000.5
In an industry upcycle, tight carrier container and air cargo capacity widens buy/sell freight rate spreads, while surging international trade volumes increase customs brokerage entries and multimodal routing demand, expanding net revenue yields and driving positive branch operating leverage.
With Expeditors trading at $190.80 as of 2026-10-07 against our Fair value of $117.88, the stock exhibits an implied return of -38.22% and a price premium to fair value of 61.86%. Under the Sell rating, capital allocation should be 0%, and existing holdings should be fully exited or trimmed.3
Risk management under a Sell rating requires strict avoidance of long capital allocation. Despite Expeditors' stellar business quality, high ROIC of 34.13%, and debt-free balance sheet with $743.7M net cash, the stock trades at an untenable valuation of $190.80 representing a 24.45x forward P/E and a 61.86% premium to house Fair value of $117.88. Investors holding long positions face substantial valuation compression risk with -38.22% implied return. Capital should be redirected toward opportunities offering an adequate .
Trading at a forward P/E of 24.45x and offering an implied return of -38.22% to Fair value of $117.88, the stock lacks any margin of safety for value-focused portfolios despite its $743.7M net cash balance sheet.35
Consensus forecasts project FY2027 revenue growth stalling at 0.03% ($13.20B) following post-pandemic freight normalization, leaving insufficient top-line acceleration to justify a 24.45x .
We recommend that investors Sell Expeditors International of Washington. At the analysis price of $190.80 as of October 7, 2026, the stock trades at an implied return of -38.22% relative to our intrinsic Fair value of $117.88 and sits 49.56% above our Potential value of $127.57. While Expeditors boasts an exceptional non-asset business model with negligible capex ($53.1M in FY2025) and robust free cash flow ($953.4M in FY2025), the equity trades at a forward P/E of 24.45x, representing an unwarranted 8-multiple-point premium to industrial peers.345
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The records this analysis drew on, as they stood when it was run.
With $1,314,285,000 in cash against $570,589,000 in debt ($743.7M net cash), Expeditors returns over 90% of free cash flow via buybacks and dividends, reducing diluted shares to 129,990,622.35
Expeditors serves a diverse customer base spanning industrial equipment, technology, retail, and healthcare multinationals across international manufacturing supply chains. Geographically, the United States is the primary destination market, generating $3,583,826,000 in FY2025 revenue, supported by critical export manufacturing gateways in North Asia ($2,737,513,000), Europe ($1,829,248,000), South Asia ($1,555,189,000), and EMEA ($638,771,000).
In the Bear scenario, escalating trade tariffs and heightened geopolitical friction across Asian export hubs curtail international shipping demand, triggering volume contractions along core transpacific and European trade corridors. Ocean and air freight rates drop toward cyclical troughs, compressing net revenue yields and inducing operating deleverage across local branch operations. Although Expeditors' debt-free balance sheet and non-asset model prevent cash burn, operating margins compress and earnings per share contract. This scenario would be disconfirmed if Asian origin export file counts demonstrate counter-cyclical growth or if carrier yield spreads widen unexpectedly, with measurable checkpoints visible in quarterly regional revenue reports over the coming fiscal years.
Under this kill scenario, escalating bilateral tariffs and geopolitical trade barriers depress combined North and South Asia revenue growth below the danger threshold of -5.0% YoY over an 18-month timeline, cutting into the $4,292,702,000 in collective Asian export origin revenue observed in FY2025 ($2,737,513,000 from North Asia and $1,555,189,000 from South Asia) out of $11,069,009,000 consolidated revenue. This shock drives a fair value impact of -28.5%, falsifying the transpacific routing density thesis and permanently lowering terminal cash flow duration.56
Under this kill scenario, severe air and ocean freight rate deflation combined with sticky local branch personnel and facility expenses causes operating margin to fall below 6.50% of revenue over a 12-month timeline, down from the 9.51% operating margin observed in FY2025 ($1,052,546,000 operating income on $11,069,009,000 revenue). This margin shock triggers a -32.0% fair value impact, impairing free cash flow generation and halting the per-share compounding mechanism.5
Under this kill scenario, persistent global trade stagnation and macroeconomic weakness compress Expeditors' forward valuation multiple below 14.80x over a 24-month horizon, derating from the 24.45x forward P/E observed on 2026-10-07 toward industrial peer medians of 16.34x (such as CPRT at 15.21x, DOV at 16.21x, and XYL at 16.47x). This 20% terminal multiple derating generates an estimated fair value impact of -22.5%.3
The five developments that would weaken our investment case.
Persistent export volume contraction across Asian manufacturing centers falsifies the Asian trade corridor density pillar, signaling structural demand impairment and forcing downward revisions to terminal growth.
Current:38.8% of consolidated FY2025 revenue ($4,292,702,000 of $11,069,009,000)
Alert ifContraction below -5.0% YoY over 18 months
Severe freight yield compression outpaces branch incentive compensation adjustments, inducing operating deleverage and reducing free cash flow conversion below the 90% threshold.
Current:9.51% in FY2025 ($1,052,546,000 operating income on $11,069,009,000 revenue)
Alert ifDecline below 6.50% of revenue over 12 months
Loss of market compounder premium as shipping volume growth stagnates, driving valuation multiples to converge toward cyclical peer trough multiples.
Current:24.45x as of 2026-10-07
Alert ifDerating below 14.80x over 24 months
Contraction in customs brokerage fee revenue indicates enterprise client defection, disintermediation, or loss of regulatory pricing power, directly impairing structural operating margins.
Current:$4,271,167,000 in FY2025 (38.6% of consolidated revenue)
Alert ifContraction below 0.0% YoY over consecutive quarters
A surge in capital expenditures would falsify the asset-light compounder thesis, reducing free cash flow conversion ($953,400,000 in FY2025) and curtailing equity repurchases.
Current:0.48% in FY2025 ($53,101,000 capex on $11,069,009,000 revenue)
Expeditors generates substantial economic profit, verified by an ROIC of 34.13% that dramatically exceeds its computed weighted average cost of capital (WACC) of 9.69% and moderate cost of equity (Ke) of 9.82%, producing an excess economic return spread of approximately 24.44 percentage points. This exceptional spread is driven by the pure non-asset logistics model, which requires minimal invested capital ($2,355,633,000 at year-end FY2025) to generate $1,052,546,000 in operating income and $810,332,000 in net income.25
Each lens answers a different valuation question. Only included lenses set Fair value; floors and diagnostics provide context.
Project SBC-adjusted EPS, discount each year's earnings at cost of equity, then add a Gordon-growth terminal value.
Under the moderate discount rate, $27.29 comes from forecast-period earnings and $89.84 from the long-term value, totaling $117.
Project EPS through the explicit advantage period, fade growth as competition catches up, and discount the full stream at cost of equity.
Apply a terminal P/E to the dated forward EPS path, then discount that future share value back to the analysis date.
Convert the revenue and margin path into after-tax free cash flow, discount the annual per-share amounts and at , then adjust for signed per current share.
Add depreciation to net income, subtract maintenance capex, divide by diluted shares, and apply a normalized valuation multiple.
Solve for the growth rate that makes the model value equal the report-date share price.
In the Base scenario, assigned a probability of 60.0%, global freight forwarding volumes stabilize following post-pandemic inventory destocking, supporting a scenario target of $117.88 and an implied return of -38.2% relative to $190.80. Expeditors maintains its non-asset routing density across Asian origin gateways and high-margin customs brokerage across North America and Europe. Operating margins remain steady in the high single digits, while capital expenditures remain minimal, allowing operating cash flow to convert into free cash flow and fund ongoing share count reduction. This outcome would be disconfirmed if transpacific shipment file counts contract or if customs brokerage revenue turns negative over consecutive fiscal quarters, which investors would detect through quarterly volume and gross yield disclosures.
In the Bull scenario, carrying a probability of 20.0%, heightened supply chain complexity, carrier capacity tightness, and cross-border regulatory demands expand gross yields, lifting the scenario target to $127.57 and producing an implied return of -33.1% compared to $190.80. Acceleration in customs brokerage filings across European and American gateways combined with robust transpacific export demand boosts operating margins into the low double digits. Heightened cash flow generation funds accelerated share repurchases, retiring equity at an expanded pace. This scenario would be disconfirmed if ocean and airfreight carrier capacity loosens dramatically or if customer insourcing dampens brokerage fee expansion over the next several fiscal quarters.
Meeting consensus expectations confirms steady volume recovery across Asian origin gateways, but leaves the equity severely overvalued at $190.80 compared to Fair value $117.88.
An earnings miss confirms that branch operating deleverage quickly compresses operating profits when freight volumes soften, validating that $190.80 prices in unrealistic perpetual growth.
Earnings quality is exceptionally high, supported by the non-asset operating model where capital expenditures remain a negligible fraction of revenue and cash collection cycles are tightly managed. Operating cash flow consistently exceeds reported net income, driven by efficient working capital management across global branch offices and the absence of asset depreciation drag. Free cash flow conversion remains robust, converting nearly all operating cash into deployable liquidity without aggressive revenue recognition or non-operating accrual distortions. The balance sheet carries substantial net cash with zero long-term bank debt, meaning reported earnings power reflects genuine operational cash generation rather than financial leverage or accounting adjustments.
Consensus estimate momentum has turned upward following recent quarterly earnings disclosures, as contributing analysts revised diluted earnings per share and net revenue expectations higher for FY2026 and FY2027. Upward revisions reflect post-event recognition of stabilizing transpacific container volumes, resilient airfreight charter demand, and sustained customs filing activity. However, even with higher forward estimates, the valuation at $190.80 remains substantially detached from intrinsic Fair value $117.88.
Asian origin gateways generate the foundation of global forwarding activity; volume acceleration expands branch density and purchasing power with ocean and air carriers, while volume declines trigger operating deleverage.
Customs brokerage represents the highest-margin and stickiest product line, decoupling revenue from volatile freight carrier buy-sell spreads and providing recurring fee income.
Fluctuations in freight buy-sell yield spreads determine operating profitability; failure to pass through higher carrier costs compresses operating margins and cash generation.
The non-asset model requires minimal capital expenditures, allowing nearly all operating cash flow to convert into free cash flow for share repurchases and balance sheet liquidity.
Systematic share repurchases reduce outstanding equity claims and compound earnings per share growth above underlying net income expansion.
| $16.52B |
| $17.07B |
| $9.30B |
| $10.60B |
| $11.07B |
| -9.5% |
| Gross profit | $2.17B | $2.17B | $1.25B | $1.35B | $1.69B | -6.0% |
| Operating income | $1.91B | $1.82B | $939.9M | $1.04B | $1.05B | -13.8% |
| Net income | $1.42B | $1.36B | $752.9M | $810.1M | $810.3M | -13.0% |
| EPS (diluted) | $8.27 | $8.26 | $5.01 | $5.72 | $5.95 | -7.9% |
| EBITDA | $1.98B | $1.92B | $1.09B | $1.16B | $1.15B | -12.6% |
| R&D | — | — | — | — | — | — |
| SG&A | $16.0M | $24.3M | $510.0M | $33.3M | $40.1M | +25.8% |
Expeditors demonstrates pristine cash flow dynamics rooted in its non-asset forwarding structure. In FY2025, the company generated $1,006,501,000 in operating cash flow against GAAP net income of $810,332,000, representing an OCF-to-net income conversion of 1.24x. Capital expenditures were strictly contained at $53,101,000 (0.48% of revenue), which closely matched depreciation of $56,769,000. Free cash flow reached $953,400,000, translating to a free cash flow conversion rate of 94.7% of operating cash flow and 117.7% of net income. This exceptional conversion highlights that Expeditors requires minimal capital reinvestment to maintain its technological infrastructure and branch network.45
Expeditors' capital allocation strategy is disciplined, shareholder-friendly, and self-funded entirely through free cash flow. In FY2025, free cash flow of $953,400,000 funded $667,306,000 in share repurchases and $207,437,000 in cash dividends, returning a total of $874,743,000 (91.8% of FCF) directly to shareholders. Share repurchases reduced diluted average shares from 141,722,000 in FY2024 to 136,249,000 in FY2025, and further down to 129,990,622 shares by October 2026. Share-based compensation of $69,231,000 in FY2025 was substantially overwhelmed by gross buybacks, driving genuine per-share equity retirement. Despite these extensive capital returns, Expeditors ended FY2025 with $1,314,285,000 in cash against $570,589,000 in total debt, preserving a robust net cash position of $743,696,000.
Expeditors' ROIC normalized from peak pandemic levels (exceeding 50% in FY2021-FY2022) to a sustainable, highly value-accretive 34.13% in FY2025. This return profile reflects the structural efficiency of the asset-light business model, which generates $1,052,546,000 in operating income on an invested capital base of $2,355,633,000.
Expeditors' ROIC of 34.13% exceeds its computed WACC of 9.69% and moderate cost of equity of 9.82% by 24.44 percentage points, generating exceptional economic value across all freight cycles.
Operating cash flow reached $1,006,501,000 in FY2025 while capital expenditures were limited to $53,101,000 (0.48% of revenue), generating $953,400,000 in free cash flow (94.7% of OCF).
Expeditors converts virtually all net income ($810,332,000 in FY2025) into distributable cash, providing uninterrupted funding for share repurchases and balance sheet liquidity.
Cash and cash equivalents totaled $1,314,285,000 as of December 31, 2025, against total debt of $570,589,000, establishing a net cash position of $743,696,000.
Zero net financial debt eliminates insolvency risk and debt service drag, enabling management to opportunistically buy back equity during cyclical freight downturns.
Customs brokerage and other services produced $4,271,167,000 in FY2025 revenue (38.6% of total revenue), exceeding airfreight ($3,982,882,000) and ocean freight ($2,814,960,000).
High-margin customs brokerage acts as a structural margin stabilizer, preserving consolidated operating margin near 9.51% even as ocean and air shipping rates fluctuate.
| Revenue | $11,069,009,000 |
|---|---|
| Cost of revenue | $9,374,782,000 |
| Gross profit | $1,694,227,000 |
| Operating expenses | $641,681,000 |
| Operating income | $1,052,546,000 |
| Non-operating items and tax | -$242,214,000 |
| Net income | $810,332,000 |
| Total assets | $4,893,638,000 |
|---|---|
| Cash | $1,314,285,000 |
| Current assets | $3,755,622,000 |
| Total liabilities | $2,532,505,000 |
| Current liabilities | $2,072,807,000 |
| Shareholders’ equity | $2,358,093,000 |
| Net income | $810,332,000 |
|---|---|
| Operating inflow | $1,006,501,000 |
| Depreciation and amortization | $56,769,000 |
| Stock-based compensation | $69,231,000 |
| Other operating adjustments | $70,169,000 |
| Operating cash flow | $1,006,501,000 |
| Cash available | $2,161,465,000 |
| Beginning cash | $1,148,320,000 |
| Exchange-rate effect | $6,644,000 |
| Investing outflow | $44,703,000 |
| Financing outflow | $802,477,000 |
| Ending cash | $1,314,285,000 |
| Investing cash flow | -$44,703,000 |
| Financing cash flow | -$802,477,000 |
Source: SEC EDGAR · Filed 2026-02-25 · SEC EDGAR
| Revenue by business category | Revenue | Share | YoY |
|---|---|---|---|
| Customs Brokerage And Other Services | $4.3B | 38.6% | 12.9% |
| Airfreight Services | $4B | 36% | 8.5% |
| Ocean Freight And Ocean Services | $2.8B | 25.4% | -10.6% |
Source: SEC EDGAR · Filed 2026-02-25 · SEC EDGAR
| Revenue by geography | Revenue | Share | YoY |
|---|---|---|---|
| United States | $3.6B | 32.4% | 10.2% |
| North Asia | $2.7B | 24.7% | -6.7% |
| Europe | $1.8B | 16.5% | 7.5% |
| South Asia | $1.6B | 14% | 11.8% |
| EMEA | $638.8M | 5.8% | -6.5% |
| Other North America | $470.6M | 4.3% | 9.6% |
| Latin America | $262.4M | 2.4% | 22.1% |
Point-in-time financial data used in the 2026-10-07 analysis.
| Period | Revenue | EBITDA | Net income | Operating cash flow | Free cash flow | Capex | Depreciation and amortization | Stock-based compensation | Share repurchases | Dividends paid | Net debt issuance | Investing cash flow | Financing cash flow | Beginning cash | Ending cash | Cash and investments | Total debt | Operating margin | ROIC | WACC | ROIC − WACC spread |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2016-12-31 | $6.1B | $717M | $430.8M | $529.5M | $470.2M | $59.3M | $46.8M | $45.2M | $337.7M | $145.1M | — | -$53.2M | -$298.8M | — | $974.4M | $974.5M | — | 11.0% | — | — | — |
| 2017-12-31 | $6.9B | $749.6M | $489.3M | $488.6M | $393.6M | $95M | $49.3M | $50.9M | $478.3M | $150.5M | — | -$11.7M | -$424.6M | $974.4M | $1.1B | $1.1B | — | 10.1% | — | — | — |
| 2018-12-31 | $8.1B | $850.6M | $618.2M | $572.8M | $525.3M | $47.5M | $54M | $56.1M | $647.9M | $156.8M | — | -$48.4M | -$627.7M | $1.1B | $923.7M | $923.7M | — | 9.8% | — | — | — |
| 2019-12-31 | $7.9B | $817.6M | $590.4M | $771.7M | $724.7M | $47M | $51M | $61.5M | $389.1M | $170.6M | — | -$46M | -$417.8M | $923.7M | $1.2B | $1.2B | $391.7M | 9.7% | — | 5.5% | — |
| 2020-12-31 | $9.6B | $1B | $696.1M | $655M | $607.4M | $47.5M | $57M | $62.5M | $332.4M | $174.9M | — | -$46M | -$331.5M | $1.2B | $1.5B | $1.5B | $438.2M | 9.8% | — | 3.5% | — |
| 2021-12-31 | $16.5B | $2B | $1.4B | $868.5M | $832.2M | $36.2M | $51.3M | $69.4M | $514.6M | $195.8M | — | -$36.6M | -$613.5M | $1.5B | $1.7B | $1.7B | $467.7M | 11.6% | — | 4.3% | — |
| 2022-12-31 | $17.1B | $1.9B | $1.4B | $2.1B | $2B | $86.8M | $57.3M | $64.4M | $1.6B | $213.8M | $51.5M | -$87.7M | -$1.7B | $1.7B | $2B | $2B | $518.5M | 10.7% | — | 7.3% | — |
| 2023-12-31 | $9.3B | $1.1B | $752.9M | $1.1B | $1B | $39.3M | $67.8M | $58.4M | $1.4B | $202M | -$5.9M | -$39.4M | -$1.5B | $2B | $1.5B | $1.5B | $527.7M | 10.1% | — | 7.2% | — |
| 2024-12-31 | $10.6B | $1.2B | $810.1M | $723.4M | $682.9M | $40.5M | $61.1M | $64.4M | $855.1M | $204.1M | -$20.1M | -$40.5M | -$1B | $1.5B | $1.1B | $623.6M | $568.9M | 9.8% | — | 7.7% | — |
| 2025-12-31 | $11.1B | $1.2B | $810.3M | $1B | $953.4M | $53.1M | $56.8M | $69.2M | $667.3M | $207.4M | -$3.7M | -$44.7M | -$802.5M | $1.1B | $1.3B | $1.3B | $570.6M | 9.5% | — | 8.0% | — |
Expeditors International of Washington Inc. (EXPD) trades at 24.5x forward earnings against a peer median of 16.3x. Its EV/EBITDA of 19.4x compares with a peer median of 13.4x. The comparison uses 4 peers: J.B. Hunt Transport Services Inc., Copart Inc., Dover Corporation and Xylem Inc., as of 2026-10-07.
In an industry downcycle, excess carrier shipping capacity and destocking lead to freight rate deflation, reducing pass-through gross billings and pressuring unit net yields, which requires disciplined branch-level variable compensation management to protect operating margins.
Expeditors occupies an advantaged position as a pure non-asset forwarder, operating with zero owned vessels or aircraft. This model keeps capex below 1% of revenue ($53,101,000 in FY2025) and enables superior operating flexibility relative to asset-based surface peers like JBHT (operating margin 7.42% vs Expeditors' 9.51%).5
Although free cash flow conversion exceeds 90% ($953.4M in FY2025) and management repurchased $667.3M of shares, the dividend yield remains modest and capital returns cannot protect against severe valuation multiple contraction from $190.80 toward Fair value of $117.88.34
The market is pricing Expeditors as an unencumbered high-growth software compounder rather than a cyclical freight intermediary exposed to global shipping rate swings and transpacific trade tensions. Given the significant downside risk to Fair value and absence of any valuation margin of safety, capital should be systematically reallocated into opportunities offering positive risk-adjusted expected returns.
Not every cited input appears here: internal calculations and intermediate model outputs have no external record, and some citations could not be matched to one.
Alert ifIncrease above 2.00% of revenue over 12 months
Discounted forecast-period cash flows ($27.51) plus discounted terminal value ($94.45) minus signed net debt per current share (-$5.72) equals the $128 lens value shown above. Negative net debt is net cash, so subtracting it raises value.
| CPRT | Copart Inc. | $24.7B | 15.2x | 5.3x | 11.0x | 16.2% | 32.0% |
| DOV | Dover Corporation | $25.4B | 16.2x | 3.0x | 14.3x | 14.9% | 18.7% |
| XYL | Xylem Inc. | $23.9B | 16.5x | 2.6x | 13.4x | 9.2% | 17.0% |
