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XPO (XPO)
NYSE:XPO

XPO (XPO) AI Stock Analysis

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XP

XPO

(NYSE:XPO)

Rating:64Neutral
Price Target:
$137.00
▲(15.31%Upside)
XPO's overall stock score reflects a stable financial performance with strengths in operational efficiency, but high leverage and premium valuation present risks. Technical indicators suggest caution due to potential overbought conditions. Strategic initiatives and corporate events provide a positive outlook, but challenges in revenue growth and market conditions persist.
Positive Factors
LTL 2.0 Initiatives
XPO's in-line results will be viewed positively by the Street as a proof point that the company continues to execute on its LTL 2.0 initiatives.
Pricing and Service Improvements
Pricing continues to be a bright spot for XPO as it improves service, increases assessorial revenues, and grows into higher yielding local channels.
Negative Factors
Industrial Freight Market
The broader industrial freight market remains soft, which could impact XPO's performance.
Trade Flow Uncertainties
There are uncertainties into trade flows, which could impact XPO's high-end 2Q guide for 300bps+ of sequential OR improvement.

XPO (XPO) vs. SPDR S&P 500 ETF (SPY)

XPO Business Overview & Revenue Model

Company DescriptionXPO Logistics, Inc. provides freight transportation services in the United States, rest of North America, France, the United Kingdom, rest of Europe, and internationally. The company operates in two segments, North American LTL and Brokerage and Other Services. The North American LTL segment provides customers with less-than-truckload (LTL) services, such as geographic density and day-definite regional, inter-regional, and transcontinental LTL freight services. This segment also offers cross-border U.S. service to and from Mexico and Canada, as well as intra-Canada service. The Brokerage and Other Services segment offers last mile logistics for heavy goods sold through e-commerce, omnichannel retail, and direct-to-consumer channels, as well as other non-core brokered freight transportation modes. It provides its services to customers in various industries, such as industrial and manufacturing, retail and e-commerce, food and beverage, logistics and transportation, and consumer goods. The company was incorporated in 2000 and is based in Greenwich, Connecticut.
How the Company Makes MoneyXPO generates revenue primarily through its less-than-truckload (LTL) transportation services. The company earns money by transporting smaller freight shipments that do not require a full truckload, consolidating multiple shipments to optimize space and efficiency. XPO's revenue streams are bolstered by its sophisticated logistics technology, which enhances route planning, load optimization, and delivery accuracy. Additionally, XPO may engage in partnerships with other logistics providers and businesses to expand its network reach and service offerings, further contributing to its earnings. Factors such as fuel surcharges, service fees, and value-added services like expedited shipping and freight handling also contribute to XPO's revenue model.

XPO Earnings Call Summary

Earnings Call Date:Apr 30, 2025
(Q1-2025)
|
% Change Since: 21.94%|
Next Earnings Date:Jul 31, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong performance in the LTL segment, cost management, yield growth, and strategic investments in capacity and technology. However, the company faced challenges with revenue decline and a difficult freight market environment. Despite these challenges, the company demonstrated resilience with effective cost management and strategic initiatives aimed at long-term growth.
Q1-2025 Updates
Positive Updates
Strong LTL Segment Performance
LTL segment maintained momentum with sequential margin improvement better than normal seasonality, 370 basis points improvement in adjusted operating ratio over two years.
Efficient Cost Management
Purchase transportation cost reduced by 53% year-over-year, and outsourced linehaul miles reduced to 8.8% of total miles, the best in company history.
Yield Growth Acceleration
Yield excluding fuel grew by 6.9% year-over-year, reflecting strong commercial strategy and value to customers.
Investment in Capacity and Technology
Continued investments in network and technology, including artificial intelligence, to enhance operational efficiency and customer service.
Liquidity and Debt Management
Ended the quarter with $811 million in liquidity and improved net debt leverage ratio to 2.5 times trailing 12 months adjusted EBITDA.
Negative Updates
Revenue Decline
Company-wide revenue of $2 billion, down 3% year-over-year, with LTL revenue down 4% year-over-year.
Challenging Freight Market
Operating under a challenging freight market with continued volume softness and macroeconomic uncertainties.
Tonnage Decline
First quarter tonnage per day down 7.5% year-over-year, with April estimated to be down 5.7% from the prior year.
Company Guidance
During the XPO First Quarter 2025 earnings call, the company provided guidance that highlights its robust financial performance despite a challenging freight market. The company reported a revenue of $2 billion and an adjusted EBITDA of $278 million, with adjusted diluted EPS of $0.73, exceeding expectations. Notably, the LTL segment showed a sequential margin improvement, outperforming typical seasonality. The adjusted operating ratio improved by 370 basis points over two years, showcasing enhanced operating efficiency. The company achieved a damage claims ratio of 0.3% and maintained a trend of year-over-year improvement in on-time performance for 12 consecutive quarters. XPO highlighted a 6.9% year-over-year yield growth excluding fuel and a 53% reduction in purchase transportation costs, with outsourced linehaul miles down to 8.8% of total miles. XPO's balance sheet reflected a net debt leverage ratio of 2.5 times trailing 12-month adjusted EBITDA, and the company announced a $750 million stock repurchase authorization. This strategic focus on operational improvements, cost efficiency, and technological advancements positions XPO for continued margin expansion and competitive advantage in the industry.

XPO Financial Statement Overview

Summary
XPO exhibits stable financial performance with strong operational efficiency and cash generation. While EBIT and EBITDA margins are healthy, high leverage is a concern. The company shows potential for improved profitability and growth, requiring careful management of leverage and capital expenditures.
Income Statement
70
Positive
XPO's income statement reveals a stable financial performance with a consistent revenue stream over recent periods. The Gross Profit Margin in TTM (Trailing-Twelve-Months) is approximately 33.1%, indicating effective cost management. The Net Profit Margin for the same period is around 4.9%, which, while positive, suggests room for improvement in profitability. The Revenue Growth Rate from 2024 to TTM shows a slight decline of 0.8%, pointing to challenges in achieving growth momentum. EBIT and EBITDA margins are healthy at 8.1% and 14.7% respectively in TTM, showcasing operational efficiency.
Balance Sheet
65
Positive
XPO maintains a solid equity base with a Debt-to-Equity Ratio of 2.51 in TTM, indicating a high level of leverage, which could pose financial risk in adverse conditions. The Return on Equity (ROE) is strong at 23.7% in TTM, demonstrating effective use of equity to generate profits. However, the Equity Ratio stands at 26.0%, suggesting moderate reliance on equity financing. The balance sheet reflects a stable financial position, although the high leverage requires careful monitoring.
Cash Flow
60
Neutral
XPO's cash flow analysis shows a mixed picture. The Free Cash Flow Growth Rate has improved significantly from the previous year, indicating better cash management practices. The Operating Cash Flow to Net Income Ratio is robust at 2.06 in TTM, highlighting strong cash-generating capability relative to net income. However, the Free Cash Flow to Net Income Ratio is lower at 0.31, suggesting limited free cash flow after capital expenditures. While cash generation from operations is strong, the company may need to manage its capital investments more efficiently.
Breakdown
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
8.01B8.07B7.74B7.72B12.81B16.25B
Gross Profit
906.00M915.00M770.00M1.23B1.99B2.56B
EBIT
652.00M660.00M438.00M604.00M616.00M391.00M
EBITDA
1.18B1.19B860.00M941.00M741.00M727.00M
Net Income Common Stockholders
389.00M387.00M189.00M184.00M336.00M110.00M
Balance SheetCash, Cash Equivalents and Short-Term Investments
212.00M246.00M412.00M460.00M260.00M2.05B
Total Assets
7.88B7.71B7.49B6.27B8.71B16.17B
Total Debt
4.11B4.12B4.11B3.25B4.49B8.98B
Net Debt
3.90B3.87B3.70B2.79B4.23B6.93B
Total Liabilities
6.24B6.11B6.23B5.26B7.57B13.32B
Stockholders Equity
1.64B1.60B1.27B1.01B1.14B2.71B
Cash FlowFree Cash Flow
119.00M19.00M-851.00M311.00M408.00M359.00M
Operating Cash Flow
801.00M808.00M682.00M832.00M721.00M885.00M
Investing Cash Flow
-594.00M-702.00M-1.50B245.00M-277.00M-357.00M
Financing Cash Flow
-223.00M-222.00M761.00M-862.00M-2.23B1.14B

XPO Technical Analysis

Technical Analysis Sentiment
Positive
Last Price118.81
Price Trends
50DMA
107.93
Positive
100DMA
119.43
Negative
200DMA
123.29
Negative
Market Momentum
MACD
4.30
Positive
RSI
55.15
Neutral
STOCH
11.83
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For XPO, the sentiment is Positive. The current price of 118.81 is above the 20-day moving average (MA) of 116.31, above the 50-day MA of 107.93, and below the 200-day MA of 123.29, indicating a neutral trend. The MACD of 4.30 indicates Positive momentum. The RSI at 55.15 is Neutral, neither overbought nor oversold. The STOCH value of 11.83 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for XPO.

XPO Risk Analysis

XPO disclosed 34 risk factors in its most recent earnings report. XPO reported the most risks in the “Production” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

XPO Peers Comparison

Overall Rating
UnderperformOutperform
Sector (65)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
75
Outperform
$15.40B18.6737.70%1.30%24.07%27.40%
GXGXO
74
Outperform
$4.53B63.992.61%23.40%-55.55%
70
Outperform
$11.37B22.8832.11%2.58%-0.22%65.52%
68
Neutral
$4.79B27.1718.34%1.03%-4.72%-22.46%
65
Neutral
$4.41B12.065.22%249.80%4.09%-12.16%
65
Neutral
$13.63B24.9513.97%1.26%-3.82%-12.80%
XPXPO
64
Neutral
$13.78B36.0026.24%1.94%60.91%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
XPO
XPO
118.81
9.54
8.73%
CHRW
CH Robinson
97.30
13.42
16.00%
EXPD
Expeditors International
114.28
-3.38
-2.87%
JBHT
JB Hunt
140.00
-16.71
-10.66%
LSTR
Landstar System
138.81
-36.19
-20.68%
GXO
GXO Logistics
41.60
-7.38
-15.07%

XPO Corporate Events

Shareholder Meetings
XPO Holds Annual Stockholders Meeting on Governance
Positive
May 16, 2025

On May 15, 2025, XPO, Inc. held its annual meeting of stockholders where key decisions were made regarding the company’s governance and financial oversight. Stockholders elected the company’s nominees for director, ratified the appointment of KPMG LLP as the independent registered public accounting firm for fiscal year 2025, and approved the advisory vote on executive compensation, reflecting confidence in the company’s leadership and strategic direction.

The most recent analyst rating on (XPO) stock is a Buy with a $162.00 price target. To see the full list of analyst forecasts on XPO stock, see the XPO Stock Forecast page.

Business Operations and StrategyFinancial Disclosures
XPO Reports Strong Q1 2025 Performance and Strategy
Positive
Apr 30, 2025

On April 30, 2025, XPO, Inc. released a slide presentation detailing its first quarter 2025 performance and strategic initiatives. The company reported $1.95 billion in revenue and $151 million in operating income, with significant improvements in its LTL segment, including a 9% year-over-year increase in operating income and a reduction in transportation expenses. XPO’s strategy focuses on enhancing service quality, driving cost efficiencies, and investing in network expansion, which has resulted in improved margins and operational performance. The company’s strong position in the North American LTL market and its strategic initiatives are expected to drive future growth and profitability.

Business Operations and StrategyFinancial Disclosures
XPO Reports February 2025 LTL Tonnage Decline
Neutral
Mar 4, 2025

On March 4, 2025, XPO, Inc. announced preliminary operating metrics for its North American Less-Than-Truckload segment for February 2025, noting an 8.1% decrease in LTL tonnage per day compared to February 2024. Despite this decline, CEO Mario Harik highlighted that February’s volume outperformed seasonal trends relative to January and aligned with quarterly expectations, supported by a favorable pricing environment and ongoing initiatives to drive sequential pricing growth throughout 2025.

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.