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GXO Logistics (GXO)
NYSE:GXO

GXO Logistics (GXO) AI Stock Analysis

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GX

GXO Logistics

(NYSE:GXO)

Rating:74Outperform
Price Target:
$54.00
▲(8.22%Upside)
GXO Logistics receives a strong overall score driven by solid technical performance and positive corporate developments, including strategic acquisitions and leadership changes. However, the high P/E ratio and modest financial performance indicate areas for improvement. The promising guidance and strategic focus on technology and new markets support a positive outlook.
Positive Factors
Contract Wins
The NHS Supply Chain contract is characterized as transformational, with a takeover-in-place structure limiting startup costs and expected to serve as a catalyst for further healthcare wins.
Earnings Outlook
Management increased the FY25 earnings outlook.
Leadership and Management
The appointment of Patrick Kelleher as CEO is seen as a positive development, given his experience with advanced robotics and successful M&A transactions at DHL Supply Chain.
Negative Factors
Margin Visibility
Margin visibility remains somewhat limited in the near term due to elevated operating costs and external volatility.
Operating Costs
Elevated operating costs present a challenge for near-term margin visibility.
Valuation
Greater consistency in margin expansion is desired before becoming more constructive on the name.

GXO Logistics (GXO) vs. SPDR S&P 500 ETF (SPY)

GXO Logistics Business Overview & Revenue Model

Company DescriptionGXO Logistics (GXO) is a leading global provider of cutting-edge supply chain solutions. The company specializes in contract logistics, offering a comprehensive range of services including warehousing, distribution, order fulfillment, and reverse logistics. GXO operates across various sectors such as e-commerce, retail, consumer technology, and industrial sectors, leveraging advanced technology to optimize supply chain operations and drive efficiency for its customers.
How the Company Makes MoneyGXO Logistics generates revenue primarily through its contract logistics services. The company enters into agreements with businesses to manage their logistics operations, which include warehousing, transportation, and distribution services. GXO's revenue model is largely based on long-term contracts, where customers pay for the logistics solutions provided. The company benefits from significant partnerships with major retailers and manufacturers, which contribute to a steady stream of income. Additionally, GXO leverages technology and automation in its operations, allowing it to offer value-added services and maintain competitiveness, further enhancing its revenue potential.

GXO Logistics Earnings Call Summary

Earnings Call Date:May 07, 2025
(Q1-2025)
|
% Change Since: 31.04%|
Next Earnings Date:Jul 30, 2025
Earnings Call Sentiment Positive
GXO showed strong revenue growth and significant advancements in the healthcare sector and technology, with a robust sales pipeline. However, the quarter was impacted by a net loss due to one-time charges and slight challenges in the U.K. market. Despite these issues, the overall performance was strong and promising for future growth.
Q1-2025 Updates
Positive Updates
Strong Revenue Growth
GXO delivered a revenue of $3 billion for Q1 2025, which represents a 21% year-over-year increase.
Healthcare Sector Expansion
GXO finalized a landmark $2.5 billion deal with the U.K. National Health Services supply chain and signed contracts with Siemens Healthineers, showcasing significant progress in the healthcare vertical.
Sales Pipeline and New Business Wins
New business wins in the quarter were $228 million, and the sales pipeline (excluding Wincanton) reached a three-year high of $2.5 billion.
AI and Technology Advancements
GXO implemented AI modules for proactive replenishment, SKU dimensioning, and order routing, which began delivering cost savings in Q1 2025.
Operating Return on Invested Capital
Operating return on invested capital increased to 45%, rising 12 percentage points from Q1 2024.
Negative Updates
Net Loss Driven by One-Time Charges
GXO recorded a net loss of $95 million due to a regulatory matter and transaction and restructuring costs.
Challenges in the U.K. Market
Slightly softer volumes were observed in the U.K. business due to customer reactions to new employment taxes.
Regulatory Issues in Italy
GXO faced a challenge with the Italian tax authorities regarding historic VAT payments, with a current accrual of $66 million.
Company Guidance
During the GXO First Quarter 2025 Earnings Conference Call, GXO's management provided optimistic guidance despite acknowledging the unpredictable macroeconomic environment. For the first quarter of 2025, GXO reported a revenue of $3 billion, up 21% year-over-year, with an adjusted EBITDA of $163 million. The company highlighted new business wins totaling $228 million and a robust sales pipeline of $2.5 billion. GXO secured its largest contract with the U.K. National Health Services supply chain, valued at $2.5 billion. The company also reported $700 million in incremental revenue secured for 2025 and $300 million for 2026. Despite macroeconomic volatility, GXO reaffirmed its guidance for 2025, projecting organic revenue growth of 3% to 6% and adjusted EBITDA between $840 million and $860 million. The company is also focusing on the integration of Wincanton, with expected cost synergies of $58 million, and continues to leverage technology and AI to enhance efficiency.

GXO Logistics Financial Statement Overview

Summary
GXO Logistics shows steady revenue growth and a stable equity base, with moderate profitability and cash flow metrics suggesting areas for improvement. High debt levels pose potential leverage risks.
Income Statement
75
Positive
GXO Logistics shows consistent revenue growth, reaching $12.23 billion in TTM, up from $11.71 billion in 2024. The gross profit margin is approximately 12.72%, and the net profit margin is 0.61%, both indicating moderate profitability. The EBIT and EBITDA margins are 1.75% and 5.65% respectively, suggesting room for operational efficiency improvements. Revenue growth is positive, with a notable increase from 2023 to 2024, reflecting strong market performance.
Balance Sheet
70
Positive
The balance sheet reflects a solid equity base with a debt-to-equity ratio of 1.85, indicating moderate leverage. Return on equity (ROE) is 2.61%, showing limited return on shareholders' investments. The equity ratio is 33.01%, displaying a stable financial position, though the high total debt level requires monitoring. Overall, the company maintains a stable asset base with potential leverage risks.
Cash Flow
68
Positive
The cash flow statement indicates positive operational cash flow at $528 million for TTM with a free cash flow of $164 million, showing a decrease compared to previous years. The operating cash flow to net income ratio is 7.04, indicating strong cash generation relative to net income. However, the free cash flow to net income ratio is 2.19, which suggests reduced cash available after investments. Cash flow growth needs improvement for stronger liquidity.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue12.23B11.71B9.78B8.99B7.94B6.20B
Gross Profit1.56B1.86B1.38B1.22B968.00M703.00M
EBITDA691.00M816.00M680.00M697.00M589.00M415.00M
Net Income75.00M134.00M229.00M197.00M153.00M-22.00M
Balance Sheet
Total Assets8.69B11.27B9.51B9.22B7.27B6.55B
Cash, Cash Equivalents and Short-Term Investments288.00M413.00M468.00M495.00M333.00M328.00M
Total Debt5.31B5.18B4.09B4.22B2.81B2.10B
Total Liabilities5.05B8.23B6.56B6.54B4.88B3.60B
Stockholders Equity2.87B3.00B2.91B2.65B2.35B2.82B
Cash Flow
Free Cash Flow164.00M190.00M284.00M200.00M205.00M111.00M
Operating Cash Flow528.00M549.00M558.00M542.00M455.00M333.00M
Investing Cash Flow-1.15B-1.16B-410.00M-1.15B-207.00M-280.00M
Financing Cash Flow578.00M636.00M-186.00M787.00M-241.00M67.00M

GXO Logistics Technical Analysis

Technical Analysis Sentiment
Positive
Last Price49.90
Price Trends
50DMA
42.56
Positive
100DMA
40.27
Positive
200DMA
46.09
Positive
Market Momentum
MACD
2.39
Negative
RSI
69.93
Neutral
STOCH
78.61
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GXO, the sentiment is Positive. The current price of 49.9 is above the 20-day moving average (MA) of 46.79, above the 50-day MA of 42.56, and above the 200-day MA of 46.09, indicating a bullish trend. The MACD of 2.39 indicates Negative momentum. The RSI at 69.93 is Neutral, neither overbought nor oversold. The STOCH value of 78.61 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GXO.

GXO Logistics Risk Analysis

GXO Logistics disclosed 33 risk factors in its most recent earnings report. GXO Logistics reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 3 New Risks
1.
We cannot guarantee that our share repurchase program will be fully implemented or that it will enhance long-term shareholder value. Q4, 2024
2.
Our borrowing costs and access to capital and credit markets may be adversely affected by a downgrade or potential downgrade of our credit ratings. Q4, 2024
3.
The Competition and Markets Authority in the United Kingdom (the "CMA") has referred the Wincanton Acquisition for an in-depth Phase 2 investigation. Q4, 2024

GXO Logistics Peers Comparison

Overall Rating
UnderperformOutperform
Sector (65)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
GXGXO
74
Outperform
$5.71B80.572.61%23.40%-55.55%
73
Outperform
$15.91B19.2937.70%1.32%24.07%27.40%
XPXPO
70
Outperform
$15.28B39.9026.24%1.94%60.91%
70
Neutral
$11.48B23.1132.11%2.56%-0.22%65.52%
69
Neutral
$14.84B27.1613.97%1.15%-3.82%-12.80%
66
Neutral
$4.98B28.2718.34%1.10%-4.72%-22.46%
65
Neutral
$10.75B15.695.29%1.89%3.09%-27.41%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
GXO
GXO Logistics
50.24
1.59
3.27%
CHRW
CH Robinson
98.33
14.98
17.97%
EXPD
Expeditors International
117.32
-1.71
-1.44%
XPO
XPO
132.26
30.29
29.70%
JBHT
JB Hunt
153.05
-5.04
-3.19%
LSTR
Landstar System
143.16
-28.55
-16.63%

GXO Logistics Corporate Events

Executive/Board ChangesBusiness Operations and Strategy
GXO Logistics Appoints Patrick Kelleher as New CEO
Positive
Jun 20, 2025

On June 19, 2025, GXO Logistics announced the appointment of Patrick Kelleher as the new CEO, effective August 19, 2025. Kelleher, with 33 years of experience in global supply chain management, previously held senior roles at DHL Supply Chain. His leadership is expected to drive GXO’s growth, leveraging his expertise in engineered solutions, automation, and contract logistics. Kelleher will be based at GXO’s headquarters in Greenwich, Connecticut, succeeding Malcolm Wilson, who is retiring.

The most recent analyst rating on (GXO) stock is a Buy with a $83.00 price target. To see the full list of analyst forecasts on GXO Logistics stock, see the GXO Stock Forecast page.

M&A TransactionsFinancial Disclosures
GXO Logistics Gets UK Approval for Wincanton Acquisition
Positive
Jun 20, 2025

On June 19, 2025, GXO Logistics announced the UK Competition and Markets Authority’s clearance of its acquisition of Wincanton, subject to divesting some grocery contracts. This acquisition is expected to enhance GXO’s offerings in the UK and Ireland, with integration commencing in the third quarter. Consequently, GXO raised its full-year 2025 guidance for organic revenue growth, adjusted EBITDA, and adjusted diluted EPS, reflecting improved volumes and productivity gains.

The most recent analyst rating on (GXO) stock is a Buy with a $83.00 price target. To see the full list of analyst forecasts on GXO Logistics stock, see the GXO Stock Forecast page.

Executive/Board ChangesShareholder Meetings
GXO Logistics Stockholders Elect Board Members in 2025
Neutral
May 15, 2025

The 2025 annual meeting of GXO Logistics‘ stockholders took place on May 13, 2025. During the meeting, stockholders elected nine board members, ratified KPMG LLP as the independent auditor for 2025, and approved the executive compensation plan. These decisions are expected to influence the company’s governance and financial oversight in the coming year.

The most recent analyst rating on (GXO) stock is a Buy with a $83.00 price target. To see the full list of analyst forecasts on GXO Logistics stock, see the GXO Stock Forecast page.

Business Operations and StrategyFinancial Disclosures
GXO Logistics Releases Q1 2025 Investor Presentation
Neutral
May 7, 2025

On May 7, 2025, GXO Logistics released a slide presentation to be used in future investor presentations, detailing their first quarter 2025 results. The presentation includes non-GAAP financial measures to provide insights into the company’s ongoing business operations, emphasizing metrics like adjusted EBITDA and free cash flow. These measures are intended to assist investors in analyzing trends and comparing performance across periods, although they are not directly comparable to GAAP measures. The release highlights the company’s strategic focus on enhancing shareholder value through effective capital deployment, despite challenges such as economic conditions and supply chain issues.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jun 21, 2025