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RXO, Inc. (RXO)
NYSE:RXO
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RXO, Inc.
(NYSE:RXO)
47Neutral
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. (RXO) vs. S&P 500 (SPY)
Market Cap
$2.26B
Dividend YieldN/A
Average Volume (3M)1.89M
Price to Earnings (P/E)―
Beta (1Y)1.28
Revenue Growth32.38%
EPS Growth-2221.75%
CountryUS
Employees7,540
SectorIndustrials
Sector Strength82
IndustryTrucking
Share Statistics
EPS (TTM)-0.03
Shares Outstanding163,910,690
10 Day Avg. Volume1,578,790
30 Day Avg. Volume1,891,794
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap2.02
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit6.54
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$16.57Price Target Upside14.83% Upside
Rating ConsensusHold
Number of Analyst Covering16
RXO, Inc. Business Overview & Revenue Model
Company DescriptionRXO 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 MoneyRXO, 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.60
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 |
| -285.00K | 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
Neutral
14.43
Price Trends
16.41
Negative
20.11
Negative
24.28
Negative
Market Momentum
-0.61
Negative
48.37
Neutral
54.51
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RXO, the sentiment is Neutral. The current price of 14.43 is above the 20-day moving average (MA) of 13.70, below the 50-day MA of 16.41, and below the 200-day MA of 24.28, indicating a neutral trend. The MACD of -0.61 indicates Negative momentum. The RSI at 48.37 is Neutral, neither overbought nor oversold. The STOCH value of 54.51 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for RXO.
RXO, Inc. Risk Analysis
RXO, Inc. disclosed 39 risk factors in its most recent earnings report. RXO, Inc. 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 0 New Risks
RXO, Inc. Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | $1.34B | 8.06 | 14.25% | 0.77% | -5.69% | 51.78% | |
64 Neutral | $4.30B | 11.84 | 5.23% | 249.82% | 4.06% | -10.21% | |
63 Neutral | $3.90B | 32.10 | 4.20% | 1.70% | -0.30% | -20.76% | |
57 Neutral | $1.07B | 50.25 | 2.83% | 1.82% | -13.47% | -62.49% | |
50 Neutral | $1.56B | 90.05 | 1.21% | 2.21% | -7.66% | ― | |
48 Neutral | $596.83M | ― | -3.44% | 0.96% | -13.10% | -121.50% | |
47 Neutral | $2.26B | ― | -27.75% | ― | 32.38% | -2221.75% |
* Industrials Sector Average
Performance Comparison
RXO
RXO, Inc.
14.47
-6.19
-29.96%
HTLD
Heartland Express
8.46
-2.94
-25.79%
MRTN
Marten Transport
13.12
-4.60
-25.96%
WERN
Werner Enterprises
26.22
-10.37
-28.34%
ARCB
ArcBest
61.72
-55.05
-47.14%
SNDR
Schneider National
22.99
0.90
4.07%
RXO, Inc. Earnings Call Summary
Earnings Call Date:May 07, 2025
(Q4-2024)
| % Change Since: 4.87%|
Next Earnings Date:Jul 30, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted significant achievements in integration and growth within complementary services, which are offset by challenges in the freight market and declines in brokerage volume. Despite a strong liquidity position and optimistic future outlook, the current market softness and costs associated with integration pose challenges.Q4-2024 Updates
Positive Updates
Coyote Logistics Integration Ahead of Schedule
The integration of Coyote Logistics is ahead of schedule, with expected annualized cost synergies increased to at least $50 million, double the initial estimate.
Strong Performance in Complementary Services
Managed transportation sales pipeline is nearly $2 billion, up almost 50% from last quarter, and last mile stops grew by 15% year over year.
Record Brokerage Volume Growth
Brokerage volume increased by 10% sequentially from the third quarter, despite a year-over-year decline, indicating strong quarter-over-quarter growth.
Improved Liquidity Position
The liquidity position is the strongest in the company's history, with a $600 million undrawn revolver and quarter-end gross leverage at 1.7 times trailing twelve months pro forma adjusted EBITDA.
Negative Updates
Soft Freight Market Conditions
The freight market remains soft with a muted peak season, impacting buy rates and gross profit per load.
Decline in Brokerage Volume
Combined brokerage volume declined by 6% year over year, with a specific 8% decline in full truckload volume.
Lower Managed Transportation Revenue
Managed transportation revenue declined by 8% year over year, primarily due to lower automotive volume in the managed expedite business.
High Transaction and Integration Costs
Transaction, integration, and restructuring expenses are expected between $40 million and $50 million for the year, impacting cash flows.
Company Guidance
During the RXO Fourth Quarter 2024 Earnings Conference Call, the company provided key guidance metrics, highlighting their successful integration of Coyote Logistics, which remains ahead of schedule and has led to an increased estimate for call synergies of at least $50 million. The company reported a fourth-quarter adjusted EBITDA of $42 million, falling within their guidance range, with brokerage volume declining 6% year-over-year but increasing 10% sequentially. RXO's managed transportation sales pipeline nearly reached $2 billion, growing 50% from the previous quarter, while last mile stops grew 15% year-over-year. For the first quarter of 2025, the company expects adjusted EBITDA between $20 million and $30 million, with tightening market conditions impacting buy rates. RXO anticipates brokerage volume to decline by mid to high single digits year-over-year but expects full-year growth. They also project capital expenditures between $75 million and $85 million for 2025, with significant structural improvements expected to enhance earnings power and free cash flow across market cycles.RXO, Inc. Corporate Events
Business Operations and StrategyFinancial Disclosures
RXO Reports Q1 2025 Financial Results Amid Integration
Neutral
May 7, 2025
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.
Spark’s Take on RXO Stock
According to Spark, TipRanks’ AI Analyst, RXO is a Neutral.
RXO’s overall stock score reflects significant financial and operational challenges. Declining revenues, increased leverage, and bearish technical indicators weigh heavily on the score. While successful integration and growth in complementary services offer some positives, market conditions and high costs pose ongoing risks.
To see Spark’s full report on RXO stock, click here.
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.