Expeditors International of Washington (EXPD) just reported first quarter 2026 results that topped market expectations, with double digit EPS growth, segment level revenue gains, a 5% dividend increase, and a new US$3b share repurchase authorization.

The earnings beat, higher dividend and active buybacks come after a mixed stretch for the stock, with a 5.07% 1 month share price return, a 7.99% 3 month share price decline, and a 39.43% 1 year total shareholder return that reflects improving sentiment and ongoing capital returns.

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With EPS growing, revenue rising and the stock trading slightly above its analyst target while also screening as modestly discounted on some intrinsic measures, you have to ask: is Expeditors undervalued, or is the market already pricing in future growth?

Preferred P/E of 23.8x: Is it justified?

On simple earnings math, Expeditors International of Washington looks expensive, with a P/E of 23.8x versus a peer average of 21.1x and a global logistics average of 16x, even as the stock trades at $151.86.

The P/E ratio compares the current share price to earnings per share, so a higher P/E usually means investors are willing to pay more today for each dollar of current earnings. For a logistics business like Expeditors, that often reflects expectations for solid profitability, efficient operations and the ability to convert trade flows into consistent cash generation.

Here, the picture is mixed. On the supportive side, Expeditors has very high quality earnings, a high 36.6% return on equity and revenue and net income that have grown annually in the latest period provided, even if the most recent year shows a small net margin compression from 7.6% to 7.5% and negative earnings growth. At the same time, the current 23.8x P/E is not only above peers and the wider logistics industry but also sits well above an estimated fair P/E of 16.8x. Our fair ratio work suggests the market could gravitate toward that level if sentiment or growth expectations cool.

That gap to both peers and the fair ratio is wide, and it reinforces that investors are already paying up for Expeditors relative to many logistics stocks and to where its earnings profile might justify over time. For anyone comparing alternatives, this premium P/E and the fair ratio benchmark are useful context when weighing whether the current price leaves much room for error.

Result: Price-to-earnings of 23.8x (OVERVALUED)

However, if trade volumes soften or pricing pressure persists, that premium P/E could come under scrutiny and make the stock more sensitive to any earnings wobble.

Another angle from the SWS DCF model

The P/E points to a rich price, yet the SWS DCF model paints a softer picture, with Expeditors trading at $151.86 versus an estimated future cash flow value of $158.50, about a 4.2% gap. If earnings growth stays moderate, could cash flows still justify paying up?

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Expeditors International of Washington for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 51 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Next Steps

With mixed signals on valuation, sentiment and future expectations, it makes sense to look at the full picture yourself and decide where you stand. Take a closer look at the 2 key rewards and 1 important warning sign

Looking for more investment ideas?

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.