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XPO (XPO)
NYSE:XPO
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XPO
(NYSE:XPO)
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Rating:68Neutral
Price Target:
$140.00
▲(8.95% Upside)
XPO's strong earnings call performance and strategic advancements in AI and fleet investments are significant positives. However, high leverage and valuation concerns, along with technical indicators suggesting potential short-term weakness, moderate the overall score.
Positive Factors
Technology and AI Advancements
XPO's investment in AI enhances operational efficiency, reducing costs and improving service delivery, which strengthens its competitive position.
Strategic Investments in Fleet and Infrastructure
Expanding and modernizing the fleet improves service reliability and capacity, supporting long-term growth and operational efficiency.
Strong Financial Performance
Robust financial results indicate effective management and operational strategies, providing a solid foundation for future growth.
Negative Factors
High Leverage
Significant leverage can limit financial flexibility and increase risk, potentially impacting long-term financial stability.
Volume Challenges
Declining shipment volumes reflect ongoing demand challenges, which could pressure revenue and profitability in the near to medium term.
Soft Freight Environment
A weak freight market environment poses challenges to growth, affecting volume recovery and potentially leading to revenue pressures.
XPO (XPO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$14.94B
Dividend YieldN/A
Average Volume (3M)1.15M
Price to Earnings (P/E)44.5
Beta (1Y)1.87
Revenue Growth-0.11%
EPS Growth-4.28%
CountryUS
Employees38,000
SectorIndustrials
Sector Strength72
IndustryIntegrated Freight & Logistics
Share Statistics
EPS (TTM)1.05
Shares Outstanding117,762,085
10 Day Avg. Volume1,152,072
30 Day Avg. Volume1,145,440
Financial Highlights & Ratios
PEG Ratio0.37
Price to Book (P/B)9.51
Price to Sales (P/S)1.88
P/FCF Ratio800.71
Enterprise Value/Market Cap1.27
Enterprise Value/Revenue2.37
Enterprise Value/Gross Profit20.89
Enterprise Value/Ebitda15.86
Forecast
1Y Price Target
$140.73Price Target Upside9.52% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering15
XPO Business Overview & Revenue Model
Company DescriptionXPO Logistics, Inc. is a global leader in supply chain solutions, providing a diverse range of transportation and logistics services. The company operates through two main segments: Transportation and Logistics. XPO offers services such as freight brokerage, last-mile delivery, contract logistics, and freight forwarding, catering to various industries including retail, e-commerce, and industrial sectors. With a strong focus on technology and innovation, XPO leverages advanced analytics and automation to optimize its operations and enhance customer experience.
How the Company Makes MoneyXPO generates revenue through multiple streams primarily from its Transportation and Logistics segments. In the Transportation sector, the company earns money by providing freight transportation services, including less-than-truckload (LTL), truckload, and last-mile delivery. Revenue is generated from shipping fees charged to customers based on distance, weight, and service type. In the Logistics segment, XPO generates income by offering contract logistics services, where it manages warehousing, inventory management, and distribution for clients, charging fees for storage and handling. Additionally, XPO benefits from technology-driven solutions that enhance operational efficiency, leading to cost savings and improved margins. Strategic partnerships with major retailers and manufacturers also contribute to its earnings, as they provide a stable customer base and volume of shipments.
XPO Earnings Call Summary
Earnings Call Date:Jul 31, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Oct 30, 2025
Earnings Call Sentiment Neutral
XPO demonstrated strong operational and financial performance despite a challenging freight environment. The company's strategic investments and technology advancements contributed to significant cost savings and improved efficiency. While there were challenges in volume and revenue, particularly in the LTL segment, XPO's ability to outperform the industry and leverage AI for operational improvements highlighted its resilience and adaptability.Q2-2025 Updates
Positive Updates
Strong Financial Performance
XPO reported $2.1 billion in revenue and $340 million in adjusted EBITDA for the second quarter, with an adjusted diluted EPS of $1.05, exceeding expectations.
Operational Improvements in LTL Segment
The North American LTL business outperformed the industry despite a soft freight environment, with a 470 basis point improvement in adjusted operating ratio over the past two years.
Technology and AI Advancements
New AI-powered models reduced linehaul miles by 3%, empty miles by over 10%, and freight diversions by more than 80%, contributing to significant cost savings.
Strategic Investments in Fleet and Infrastructure
Since 2021, XPO has added nearly 6,000 tractors and over 17,000 trailers, reducing the average tractor age to less than 4 years. Additionally, new service centers in key freight corridors improved network efficiency.
European Segment Performance
The European transportation segment increased revenue by 4% year-over-year and delivered a 38% sequential increase in adjusted EBITDA, demonstrating strong execution in a challenging environment.
Negative Updates
Decline in LTL Revenue
LTL segment revenue declined by 3% year-over-year due to a reduction in fuel surcharge revenue, with LTL revenue excluding fuel down by 1%.
Volume Challenges
Total shipments per day in the LTL segment declined by 5.1% year-over-year, with tonnage per day declining by 6.7%, reflecting ongoing challenges in freight demand.
Soft Freight Environment
The company faced a soft freight market, impacting overall demand and leading to a cautious outlook for volume recovery.
June Tonnage Decline
Monthly tonnage showed a notable decline in June, down 8.9% year-over-year, contributing to challenges in maintaining shipment volumes.
Company Guidance
During the XPO Second Quarter 2025 Earnings Conference Call, the company provided strong financial guidance, showcasing robust performance metrics. XPO reported $2.1 billion in revenue and an adjusted EBITDA of $340 million for the quarter, with an adjusted diluted EPS of $1.05, which exceeded expectations. The North American LTL segment demonstrated significant improvement, with a 470 basis point enhancement in the adjusted operating ratio over the past two years. The quarter also featured a damage claims ratio of 0.3% and sustained year-over-year improvement in on-time performance. Strategic investments included expanding their fleet with nearly 6,000 tractors and over 17,000 trailers since 2021 and opening new break bulk locations. Additionally, XPO achieved a 6.1% year-over-year increase in yield, excluding fuel, and reduced outsourced linehaul miles to 6.8%, which lowered purchase transportation expenses by 53% year-over-year. With a focus on AI and technology, XPO aims to drive further operational efficiencies and cost savings. The company closed the quarter with $824 million of liquidity and initiated a share buyback program, indicating a strong commitment to returning capital to shareholders while maintaining financial flexibility.XPO Financial Statement Overview
Summary
XPO demonstrates solid financial performance with steady revenue growth and profitability. However, high leverage and slightly decreased operational efficiency are concerns. Strong return on equity and improved cash flow generation are positive indicators.Income Statement
XPO's income statement shows a stable revenue growth rate of 1.2% in the TTM period, with a consistent gross profit margin of around 8%. The net profit margin is healthy at 4.3%, indicating profitability. However, the EBIT and EBITDA margins have slightly decreased compared to previous periods, suggesting potential pressure on operational efficiency.75
Positive
Balance Sheet
The balance sheet reveals a high debt-to-equity ratio of 2.34, indicating significant leverage, which could pose financial risk. However, the return on equity is strong at 20.7%, reflecting efficient use of equity to generate profits. The equity ratio stands at 21.9%, suggesting moderate financial stability.65
Positive
Cash Flow
XPO's cash flow statement shows a robust free cash flow growth rate of 29.4% in the TTM period, indicating improved cash generation. The operating cash flow to net income ratio is 0.53, suggesting good cash conversion. However, the free cash flow to net income ratio is relatively low at 0.18, indicating limited free cash flow relative to net income.70
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 8.01B | 8.07B | 7.74B | 7.72B | 7.20B | 6.17B |
| Gross Profit | 908.00M | 915.00M | 770.00M | 730.00M | 525.00M | 932.00M |
| EBITDA | 1.20B | 1.19B | 860.00M | 785.00M | 703.00M | 522.00M |
| Net Income | 345.00M | 387.00M | 189.00M | 666.00M | 336.00M | 110.00M |
Balance Sheet | ||||||
| Total Assets | 8.13B | 7.71B | 7.49B | 6.27B | 8.72B | 16.18B |
| Cash, Cash Equivalents and Short-Term Investments | 225.00M | 246.00M | 412.00M | 460.00M | 228.00M | 1.73B |
| Total Debt | 4.17B | 4.12B | 4.11B | 3.25B | 4.27B | 7.37B |
| Total Liabilities | 6.35B | 6.11B | 6.23B | 5.26B | 7.58B | 13.33B |
| Stockholders Equity | 1.78B | 1.60B | 1.27B | 1.01B | 1.14B | 2.71B |
Cash Flow | ||||||
| Free Cash Flow | 154.00M | 19.00M | -851.00M | 311.00M | 408.00M | 359.00M |
| Operating Cash Flow | 842.00M | 808.00M | 682.00M | 832.00M | 721.00M | 885.00M |
| Investing Cash Flow | -601.00M | -702.00M | -1.50B | 245.00M | -277.00M | -357.00M |
| Financing Cash Flow | -265.00M | -226.00M | 761.00M | -862.00M | -2.23B | 1.14B |
XPO Technical Analysis
Positive
128.50
Price Trends
129.05
Negative
126.91
Positive
124.05
Positive
Market Momentum
-0.63
Positive
48.12
Neutral
42.63
Neutral
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 128.5 is below the 20-day moving average (MA) of 130.43, below the 50-day MA of 129.05, and above the 200-day MA of 124.05, indicating a neutral trend. The MACD of -0.63 indicates Positive momentum. The RSI at 48.12 is Neutral, neither overbought nor oversold. The STOCH value of 42.63 is Neutral, 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
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | $16.76B | 20.16 | 39.01% | 1.21% | 23.70% | 31.33% | |
69 Neutral | $15.99B | 30.82 | 32.43% | 1.83% | -2.55% | 59.07% | |
68 Neutral | $14.94B | 44.45 | 21.10% | ― | -0.11% | -4.28% | |
67 Neutral | $4.25B | 25.72 | 17.47% | 2.87% | -2.10% | -22.19% | |
66 Neutral | $12.99B | 24.39 | 14.33% | 1.27% | -2.24% | -5.43% | |
64 Neutral | $2.09B | 20.68 | 6.03% | 1.46% | -5.37% | -11.26% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% |
* Industrials Sector Average
XPO
XPO
128.50
23.15
21.97%
CHRW
CH Robinson
135.40
31.17
29.91%
EXPD
Expeditors International
123.52
5.18
4.38%
HUBG
Hub Group
34.16
-7.76
-18.51%
JBHT
JB Hunt
137.95
-24.43
-15.04%
LSTR
Landstar System
122.63
-56.48
-31.53%
XPO Corporate Events
Business Operations and StrategyFinancial Disclosures
XPO Reports August 2025 LTL Tonnage Decline
Negative
Sep 3, 2025
On September 3, 2025, XPO, Inc. released preliminary operating metrics for its North American Less-Than-Truckload segment for August 2025, showing a 4.7% decrease in LTL tonnage per day compared to August 2024. The final metrics for July 2025 indicated an 8.7% decrease in weight per day from July 2024, influenced by a reduction in shipments per day and weight per shipment, highlighting ongoing challenges in the freight transportation sector.
Business Operations and StrategyFinancial Disclosures
XPO Releases Q2 2025 Performance Presentation
Positive
Jul 31, 2025
On July 31, 2025, XPO, Inc. released a slide presentation for future investor engagements, detailing its second quarter 2025 performance. The company reported a revenue of $2.08 billion and an operating income of $198 million, with significant improvements in its North American LTL segment, including a 1% year-over-year increase in LTL adjusted EBITDA and a reduction in purchased transportation expenses. XPO’s strategic focus on enhancing service quality and operational efficiency has led to improved margins and a strong industry position, with ongoing investments in network capacity and technology to drive future growth.
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.