Expeditors International of Washington, Inc. (EXPD)

Conclusion

Expeditors International of Washington, Inc. is a logistics provider based in Bellevue, Washington, offering airfreight, ocean freight, customs brokerage and warehousing services across the Americas, Asia, Europe, and the Middle East, Africa and India. On 2026-11-09 the share price was 189.59 USD, giving a market capitalisation of 24.5 billion USD.

The verdict is overvalued. The fair value band runs from 101.17 to 151.75 USD with a midpoint of 126.46 USD, a margin of safety of -33.3% at the current price. Today's multiples sit above their own ten-year medians: price to earnings is 23.5 against a median of 22.6, enterprise value to EBITDA is 17.0 against 14.6, and price to free cash flow is 26.4 against 21.1. The discounted cash flow gives 89.76 USD per share at a discount rate of 10.24%. The reverse DCF implies growth of 13.1% a year, while revenue grew 2.9% a year over five years and free cash flow per share grew 14.5% a year over the same period.

The case rests on return on capital, cash generation and balance sheet strength. ROIC of 55.1% stands against a WACC of 10.1%, free cash flow conversion is 89.1% on a trailing basis, and the company holds net cash, with net debt to EBITDA at -0.37. The weakest numbers are three-year revenue growth of -13.5% a year, the next-year EPS estimate of -1.0% growth, and a price to book of 10.45 against a median of 5.99.

Financial health

Financial strength is green, held up by the Altman Z-score, net debt to EBITDA and the current ratio, all assessed good. The current ratio is 1.56 and the quick ratio 1.40, while debt to equity is 0.25 and the company is in a net cash position. The company does not report its interest expense, so interest coverage is not available. The Altman Z-score is 8.29, in the safe zone, although that model was designed for manufacturers and this company is a logistics business. Insolvency risk is low, about 0.2% by the estimate of the Ohlson model over one to two years, based on figures as of 2025-12-31.

Earnings quality

Earnings quality is green, supported by free cash flow conversion and a falling share count, both assessed good. Free cash flow conversion is 89.1% on a trailing basis and 107.3% over five years, and the accrual ratio is -0.04. Stock-based compensation is 0.55% of revenue, leaving free cash flow after it at 854.5 million USD. The five-year share count change is -4.43% a year, reflecting buybacks. The Piotroski score is 7 of 8 evaluable points. The company beat earnings expectations in all 8 of the last quarters, with an average surprise of 15.3%. Current-year estimates rose 12.7% over 90 days, with 7 upward and 1 downward revision in the last 30 days.

Profitability

Profitability is green, driven by ROIC against WACC, which is assessed good, while the margins are neutral. ROIC is 55.1% against a WACC of 10.1%, a ROIC minus WACC value of 45.0%, and the five-year median ROIC is 53.9%. The gross margin is 27.4% against a ten-year median of 12.7%. The operating margin is 10.1% against a median of 10.0%, and the net margin is 7.9% against 7.5%. Return on equity is 44.5%. The DuPont split shows a net margin of 7.35%, an asset turnover of 2.26 and an equity multiplier of 2.08, so the return comes mainly from margin and asset turnover rather than leverage.

Growth

Growth is yellow: the compounding rates are neutral, revenue consistency is good, and the next-year estimate is bad. Revenue compounded at -13.5% over three years, 2.9% over five years and 5.3% over ten years. EPS compounded at -10.2% over three years, 8.0% over five years and 9.5% over ten years. Free cash flow per share compounded at -17.4% over three years, 14.5% over five years and 9.9% over ten years. Revenue grew in 7 of 10 comparable years. The next-year EPS estimate shows growth of -1.0%, while the next-year estimate rose 8.3% over 90 days.

Valuation

Valuation is red, because the price sits well above the fair value band, and the verdict is overvalued. Against their ten-year medians, price to earnings is 23.5 against 22.6, a premium of 4.0%; enterprise value to EBITDA is 17.0 against 14.6, a premium of 16.6%; price to free cash flow is 26.4 against 21.1, a premium of 24.9%; price to sales is 1.85 against 1.66, a premium of 11.2%; and price to book is 10.45 against 5.99, a premium of 74.4%. The discounted cash flow gives 89.76 USD per share at a discount rate of 10.24%. The fair value from historical multiples is 163.16 USD. The reverse DCF implies 13.1% growth against 2.9% revenue growth over five years. The dividend yield is 0.85% with a payout of 22.4% of free cash flow.

Risks

Each weak number would weigh on the case in a different way. Negative three-year revenue and EPS growth would call into question whether the premium multiples are supported by the recent trend. A next-year EPS estimate of -1.0% growth would reduce the earnings base the price relies on. A price to book of 10.45 against a median of 5.99 means that a return to historical multiples would cut value sharply. The company does not report its interest expense, so interest coverage is not available, and the cost of debt used in the discount rate is an assumption. The Altman model was built for manufacturers, so its safe reading is less informative here. The Beneish M-score reading is not available. This analysis has no debt maturity schedule and no revenue split by segment.