CHRW – Market expectations are for Uniform ROA to fade to new lows, but management is confident about cash flow, growth, and acquisitions

• C.H. Robinson Worldwide, Inc. (CHRW:USA) currently trades below historical averages relative to UAFRS-based (Uniform) Earnings, with a 15.9x Uniform P/E. At these levels, the market has bearish expectations for the firm, but management is confident about their cash flow, growth runway, and acquisition pipeline
• Specifically, management is confident they have increased cash flow from operations and cash return to shareholders, and they are confident their pricing adjustments have improved their bid rate. Furthermore, they are confident their growth is from industry conversion rather than new entrants and that their routing guide depth is the lowest they have seen in the last decade. Moreover, they are confident they have growth runway in several geographies and that their peak seasons are more pronounced due to e-commerce. Finally, they are confident they will spend more on technology to better leverage their data and they will continue to look at acquisitions that fill geographic space.