RXO, Inc. (RXO) AI Stock Analysis

• Market Cap: $2.50B
• Dividend Yield: N/A
• Average Volume (3M): 2.07M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.42
• Revenue Growth: 32.38%
• EPS Growth: -2221.75%
• Country: US
• Employees: 7,540
• Sector: Industrials
• Sector Strength: 90
• Industry: Trucking
• EPS (TTM): -0.03
• Shares Outstanding: 163,916,120
• 10 Day Avg. Volume: 2,055,558
• 30 Day Avg. Volume: 2,073,813
• PEG Ratio: 8.12
• Price to Book (P/B): 1.48
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -41.61
• Enterprise Value/Market Cap: 1.20
• Enterprise Value/Revenue: 0.19
• Enterprise Value/Gross Profit: 3.76
• Enterprise Value/Ebitda: 11.07
• 1Y Price Target: $17.00
• Price Target Upside: 11.48% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 16

• Rating: 48 Neutral
• Price Target: $16.50 ▲( 8.20% Upside)

RXO faces significant financial challenges, with negative profitability and cash flow issues weighing heavily on its outlook. While technical indicators show some momentum, the valuation is not compelling due to negative earnings. The recent earnings call provides a balanced view with both positive developments and challenges, but overall, the risks currently outweigh the potential rewards.

Positive Factors

Cost Synergies

RXO raised its target for annualized cost synergies to $70 million.

Synergy and Integration

Synergy targets were raised and management likes early Coyote integration gains.

Volume Growth

Management talked up share gains in LTL, where volumes outpaced the industry and there is more growth to come relative to peer revenue share.

Negative Factors

Earnings Performance

RXO's 1Q was a sizeable miss and while 2Q was a relative step up, it likely falls short of expectations as well.

Market Environment

Considering increased economic uncertainty on top of an already soft trucking environment, analyst is incrementally cautious on RXO's volume trajectory.

Revenue Performance

Revenue was $1.43 billion, up 57% year-year, but $52 million below target.

RXO, Inc. Business Overview & Revenue Model

Company Description

RXO provides truckload freight transportation brokerage in the United States. The company, through a proprietary digital freight marketplace, offers access to truckload capacity and complementary brokered services of managed transportation, last mile, and freight forwarding. The company is based in Charlotte, North Carolina.

How the Company Makes Money

RXO, Inc. generates revenue primarily through its freight brokerage operations, where it earns fees by matching shippers with suitable carriers for transporting goods. The company leverages its extensive network of carrier partners and advanced technology platform to provide cost-effective and efficient logistics solutions. Key revenue streams include service fees charged to shippers for arranging transportation and ancillary services. Additionally, RXO may benefit from significant partnerships with large shippers and carriers, which can lead to increased volume and preferential rates, further enhancing its earnings potential.

RXO, Inc. Financial Statement Overview

Summary

RXO, Inc. faced financial challenges in 2024, with declining revenue and profitability, increased leverage, and weaker cash flows. Despite a strong equity position, the high debt level and poor cash flow generation pose significant risks.

Income Statement

RXO, Inc. faced a challenging financial year with significant declines in revenue and profitability. Revenue dropped notably from 2023 to 2024, and the company reported a negative net income in 2024, reflecting a net loss margin. The gross profit margin was weaker compared to previous years, and both EBIT and EBITDA margins turned negative, indicating operational struggles.

Balance Sheet

The balance sheet reveals a strong equity position with a high equity ratio, indicating financial stability. However, the debt-to-equity ratio increased, suggesting a rise in leverage, which could pose risks if not managed carefully. The overall asset base grew slightly, but the increase in debt is a concern.

Cash Flow

The cash flow statement shows a concerning decline in cash generation. Operating cash flow turned negative in 2024, and free cash flow also declined significantly, reflecting pressure on liquidity. The free cash flow to net income ratio is unfavorable due to negative earnings, indicating cash flow issues.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
4.55B	3.93B	4.80B	4.69B	3.36B
	Gross Profit
696.00M	658.00M	1.17B	1.01B	789.00M
	EBIT
-56.00M	39.00M	123.00M	192.00M	80.00M
	EBITDA
-187.00M	103.00M	209.00M	277.00M	160.00M
	Net Income Common Stockholders
-290.00M	4.00M	92.00M	150.00M	43.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
35.00M	5.00M	98.00M	29.00M	70.00M
	Total Assets
3.41B	1.82B	2.04B	2.07B	1.87B
	Total Debt
664.00M	558.00M	617.00M	135.00M	116.00M
	Net Debt
629.00M	553.00M	519.00M	106.00M	46.00M
	Total Liabilities
1.80B	1.23B	1.45B	998.00M	802.00M
	Stockholders Equity
1.61B	594.00M	589.00M	1.07B	1.07B
Cash Flow		Free Cash Flow
-57.00M	25.00M	253.00M	116.00M	-22.00M
	Operating Cash Flow
-12.00M	89.00M	310.00M	155.00M	25.00M
	Investing Cash Flow
-1.06B	-66.00M	-56.00M	-38.00M	-39.00M
	Financing Cash Flow
1.11B	-117.00M	-183.00M	-158.00M	32.00M

RXO, Inc. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 15.25
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RXO, the sentiment is Negative. The current price of 15.25 is above the 20-day moving average (MA) of 15.09, below the 50-day MA of 15.84, and below the 200-day MA of 23.64, indicating a neutral trend. The MACD of 0.25 indicates Negative momentum. The RSI at 48.14 is Neutral, neither overbought nor oversold. The STOCH value of 41.04 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for RXO.

RXO, Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ARCB	73 Outperform	$1.42B	8.20	14.25%	0.76%	-5.69%	51.78%
SNDR	65 Neutral	$4.12B	33.23	4.20%	1.62%	-0.30%	-20.76%
Sector *	64 Neutral	$4.39B	11.81	5.17%	249.38%	3.98%	-12.17%
MRTN	63 Neutral	$1.06B	48.96	2.83%	1.83%	-13.47%	-62.49%
HTLD	53 Neutral	$705.41M	―	-3.44%	0.91%	-13.10%	-121.50%
WERN	50 Neutral	$1.68B	95.40	1.21%	2.13%	-7.66%	-78.26%
RXO	48 Neutral	$2.50B	―	-27.75%	―	32.38%	-2221.75%

RXO, Inc. Corporate Events

RXO Reports Q1 2025 Financial Results Amid Integration

On May 7, 2025, RXO announced its first-quarter financial results, highlighting the successful integration of Coyote coverage operations into the RXO Connect platform. This integration is expected to yield over $70 million in cash synergies, enhancing the company’s operational efficiency. The company reported a 26% year-over-year increase in less-than-truckload brokerage volume and a 24% growth in Last Mile stops. Despite these operational successes, RXO reported a first-quarter GAAP net loss of $31 million, influenced by transaction and integration costs. The company’s revenue for the quarter was $1.4 billion, up from $913 million in the same period last year.