Morningstar Rating

Stock Research and Analysis

by Matthew Young, CFA

Bulls Say

Constrained truckload capacity will support favorable pricing conditions for top-shelf domestic highway brokers in the year ahead.
Echo is grabbing market share from asset-based truckers, partly because it can aggregate supply in the fragmented truckload market. By outsourcing to Echo, shippers avoid the burden of managing carrier relationships on their own.
The firm's network of shippers and carriers crafts a compelling value proposition--it aggregates buying power to reduce shippers' transportation costs while providing carriers with an attractive source of cargo opportunities. Read more 

Bears Say

As a relatively new company (2005), Echo has a limited operating history. While it has posted solid top-line expansion and decent profitability improvement since inception, its ability to create shareholder wealth over the long run is unproved.
High returns on invested capital are attracting competition to the 3PL industry, including startups and truck brokerage operations of traditional asset-based truckers.
Small brokerage operations once limited in scope are becoming more efficient (and more of a competitive threat) as they are acquired by larger, more capable 3PLs. Read more 

Management

Chief executive Douglas Waggoner has been at the helm since late 2006. Before that, founders Eric Lefkofsky and Bradley Keywell shared responsibility for overseeing Echo's day-to-day operations during the company's startup phase. We think members of   Read more 

Profile

Founded in 2005, Echo Global Logistics is an asset-light third-party logistics provider specializing in domestic truck brokerage (more than 85% of gross revenue). It also   Read more 

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