GXO Logistics (GXO) AI Stock Analysis

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GXO Logistics

(NYSE:GXO)

Rating:74Outperform

Price Target:

$44.00

▲(5.77%Upside)

GXO's strong revenue growth and strategic advancements in healthcare and technology were the most significant drivers of its overall score. However, high valuation and potential leverage risks slightly dampen the outlook. The positive sentiment from the earnings call further supports the stock's potential, despite the current high P/E ratio and absence of dividend yield.

Positive Factors

Competitive Advantage

GXO's leadership in warehouse automation and robotics is a core competitive advantage in winning new business.

Contract Wins

GXO delivered strong new contract wins and reaffirmed guidance.

Growth Momentum

The company has already secured significant incremental revenues for 2025 and 2026, indicating strong growth momentum.

Negative Factors

Leadership Concerns

GXO has undergone several missteps over the past year, including a surprise CEO departure and an acquisition under CMA review that may require significant remedies.

Margin Visibility

Margin visibility remains somewhat limited in the near term due to elevated operating costs and external volatility.

Near-term Risks

Multiple looming near-term risks for GXO may limit upside until the company resolves issues such as the CMA review and finding a new CEO.

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

Market Cap

$4.53B

Dividend YieldN/A

Average Volume (3M)1.25M

Price to Earnings (P/E)64.0

Beta (1Y)1.10

Revenue Growth23.40%

EPS Growth-55.55%

CountryUS

Employees150,000

SectorIndustrials

Sector Strength92

IndustryIntegrated Freight & Logistics

Share Statistics

EPS (TTM)0.29

Shares Outstanding114,418,990

10 Day Avg. Volume1,116,777

30 Day Avg. Volume1,253,690

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.00

P/FCF RatioN/A

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$49.91

Price Target Upside19.98% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering11

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: 9.24%|

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 exhibits strong financial health with consistent revenue and profit growth, a solid equity position, and effective cash flow management. Despite increased debt levels, the company maintains a stable leverage ratio, balancing growth with financial prudence.

Income Statement

Very Positive

GXO Logistics has demonstrated strong revenue growth with a consistent upward trajectory from $6.09 billion in 2019 to $11.71 billion in 2024. The gross profit margin has also improved, highlighting enhanced efficiency in operations. Although the net profit margin has seen fluctuations, it remains positive, indicating profitability. EBIT and EBITDA margins are healthy, contributing to a robust financial performance.

Balance Sheet

Positive

The company maintains a strong equity base, with stockholders' equity increasing over the years. The debt-to-equity ratio has been relatively stable, indicating balanced leverage. The equity ratio reflects a sound financial structure. However, the total debt has increased, which could pose a risk if not managed carefully.

Cash Flow

Positive

GXO Logistics has shown a positive trend in operating cash flow, which supports its net income and investment activities. The free cash flow has fluctuated but remains positive, suggesting prudent capital expenditure management. The operating cash flow to net income ratio is favorable, indicating effective cash generation relative to profit.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
11.71B	9.78B	8.99B	7.94B	6.20B
	Gross Profit
1.86B	1.38B	1.22B	968.00M	703.00M
	EBIT
218.00M	318.00M	386.00M	277.00M	94.00M
	EBITDA
816.00M	680.00M	697.00M	589.00M	415.00M
	Net Income Common Stockholders
134.00M	229.00M	197.00M	153.00M	-22.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
413.00M	468.00M	495.00M	333.00M	328.00M
	Total Assets
11.27B	9.51B	9.22B	7.27B	6.55B
	Total Debt
5.18B	4.09B	4.22B	2.81B	2.10B
	Net Debt
4.76B	3.62B	3.72B	2.47B	1.78B
	Total Liabilities
8.23B	6.56B	6.54B	4.88B	3.60B
	Stockholders Equity
3.00B	2.91B	2.65B	2.35B	2.82B
Cash Flow		Free Cash Flow
190.00M	284.00M	200.00M	205.00M	111.00M
	Operating Cash Flow
549.00M	558.00M	542.00M	455.00M	333.00M
	Investing Cash Flow
-1.16B	-410.00M	-1.15B	-207.00M	-280.00M
	Financing Cash Flow
636.00M	-186.00M	787.00M	-241.00M	67.00M

GXO Logistics Technical Analysis

Technical Analysis Sentiment

Positive

Last Price41.60

Price Trends

50DMA

37.94

Positive

100DMA

40.01

Positive

200DMA

46.55

Negative

Market Momentum

MACD

1.07

Negative

RSI

57.77

Neutral

STOCH

47.16

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 41.6 is above the 20-day moving average (MA) of 39.70, above the 50-day MA of 37.94, and below the 200-day MA of 46.55, indicating a neutral trend. The MACD of 1.07 indicates Negative momentum. The RSI at 57.77 is Neutral, neither overbought nor oversold. The STOCH value of 47.16 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

We cannot guarantee that our share repurchase program will be fully implemented or that it will enhance long-term shareholder value. Q4, 2024

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

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
EXPD	75 Outperform	$15.65B	18.97	37.70%	1.30%	24.07%	27.40%
GXO	74 Outperform	$4.53B	63.99	2.61%	―	23.40%	-55.55%
CHRW	70 Outperform	$11.37B	22.88	32.11%	2.58%	-0.22%	65.52%
LSTR	68 Neutral	$4.85B	27.53	18.34%	1.03%	-4.72%	-22.46%
Sector *	65 Neutral	$4.41B	12.06	5.22%	249.80%	4.09%	-12.16%
JBHT	65 Neutral	$13.63B	24.95	13.97%	1.26%	-3.82%	-12.80%
XPO	64 Neutral	$14.00B	36.56	26.24%	―	1.94%	60.91%

* Industrials Sector Average

Performance Comparison

GXO

GXO Logistics

40.94

-7.92

-16.21%

CHRW

CH Robinson

97.30

15.40

18.80%

EXPD

Expeditors International

114.28

-2.12

-1.82%

XPO

118.81

11.40

10.61%

JBHT

JB Hunt

138.64

-14.37

-9.39%

LSTR

Landstar System

136.91

-35.86

-20.76%

GXO Logistics Corporate Events

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

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.