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GXO Logistics (GXO)
NYSE:GXO
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GXO Logistics
(NYSE:GXO)
71Outperform
Positive Factors
Business Growth
GXO continues to add high-quality, blue-chip customers despite a challenging demand environment, with a pipeline that grew 15%.
Market Position
GXO is considered to have a unique and attractive business model capable of delivering 'defensive growth,' making the stock's risk-reward profile attractive enough to be overweight.
Valuation
Valuation is seen as completely reset and well below any comparable asset in the marketplace, with GXO's EV/EBITDA nearly 50% below peers.
Negative Factors
Financial Performance
The EBITDA guide for 2025 was significantly below forecasts, causing shares to sell off.
Leadership Transition
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.
Regulatory Challenges
The Competition and Markets Authority released a report indicating that GXO's purchase of Wincanton is likely to reduce competition in the supply of dedicated warehousing services to grocery customers in the UK.
GXO Logistics (GXO) vs. S&P 500 (SPY)
Market Cap
$4.81B
Dividend YieldN/A
Average Volume (3M)2.05M
Price to Earnings (P/E)35.8
Beta (1Y)1.16
Revenue Growth19.75%
EPS Growth-41.77%
CountryUS
Employees105,000
SectorIndustrials
Sector Strength70
IndustryIntegrated Freight & Logistics
Share Statistics
EPS (TTM)1.11
Shares Outstanding119,518,036
10 Day Avg. Volume1,737,268
30 Day Avg. Volume2,050,134
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.41
Price to Cash Flow (P/CF)6.50
P/FCF Ratio13.60
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$51.64Price Target Upside28.87% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering14
GXO Logistics Business Overview & Revenue Model
Company DescriptionGXO Logistics, Inc., together with its subsidiaries, provides logistics services worldwide. The company provides warehousing and distribution, order fulfilment, e-commerce, and other supply chain services, as well as reverse logistics or returns management services. As of December 31, 2021, it operated in approximately 906 facilities. The company serves various customers in the e-commerce, omnichannel retail, consumer technology, food and beverage, industrial and manufacturing, and consumer packaged goods industries. GXO Logistics, Inc. was incorporated in 2021 and is headquartered in Greenwich, Connecticut.
How the Company Makes MoneyGXO Logistics generates revenue through a variety of logistics and supply chain services. The company's primary revenue streams include warehousing and distribution services, which involve managing storage and inventory for clients in strategically located facilities. Additionally, GXO provides transportation management services, coordinating the movement of goods across different modes of transport to optimize delivery times and costs. The company also earns from value-added services such as order fulfillment, returns management, and supply chain consulting. Significant partnerships with major corporations and retailers enhance GXO's service offerings and expand its customer base, contributing to its earnings. By utilizing technology to streamline operations and improve efficiency, GXO is able to offer competitive pricing and attract a diverse clientele, further bolstering its revenue.
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
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.87
Very Positive
Balance Sheet
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.75
Positive
Cash Flow
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.80
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| 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
Negative
40.07
Price Trends
41.52
Negative
46.79
Negative
49.40
Negative
Market Momentum
-0.19
Negative
48.75
Neutral
40.27
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GXO, the sentiment is Negative. The current price of 40.07 is above the 20-day moving average (MA) of 39.32, below the 50-day MA of 41.52, and below the 200-day MA of 49.40, indicating a neutral trend. The MACD of -0.19 indicates Negative momentum. The RSI at 48.75 is Neutral, neither overbought nor oversold. The STOCH value of 40.27 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 0 New Risks
GXO Logistics Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $16.57B | 20.85 | 35.12% | 1.23% | 13.98% | 14.29% | |
74 Outperform | $58.44B | 15.30 | 14.74% | 2.21% | 0.34% | -8.45% | |
72 Outperform | $94.82B | 16.42 | 33.99% | 5.88% | 0.16% | -13.41% | |
71 Outperform | $4.81B | 35.76 | 4.53% | ― | 19.75% | -41.77% | |
68 Neutral | $12.02B | 26.40 | 29.65% | 2.42% | 0.73% | 41.65% | |
65 Neutral | $15.08B | 27.25 | 14.06% | 1.15% | -5.79% | -20.32% | |
62 Neutral | $8.05B | 13.61 | 3.91% | 3.08% | 3.83% | -13.91% |
* Industrials Sector Average
Performance Comparison
GXO
GXO Logistics
39.32
-13.31
-25.29%
CHRW
CH Robinson
101.13
29.62
41.42%
EXPD
Expeditors International
119.73
2.09
1.78%
FDX
FedEx
241.71
-32.67
-11.91%
JBHT
JB Hunt
146.12
-48.40
-24.88%
UPS
United Parcel
109.66
-30.74
-21.89%
GXO Logistics Earnings Call Summary
Earnings Call Date: Feb 12, 2025 | % Change Since: -6.29% | Next Earnings Date: May 13, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong revenue and EBITDA growth, significant new business wins, and strategic advancements in technology and M&A, indicating a positive trajectory for GXO. However, the company faces challenges with customer capacity realignments impacting early 2025 and a softer U.K. market. Overall, the sentiment is positive due to the outweighing achievements and strategic positioning for future growth.Highlights
Record Revenue and EBITDA Growth
GXO achieved record revenue of $11.7 billion for the full-year 2024, with a 20% year-over-year increase, including 3% organic growth. Adjusted EBITDA grew by 10% to $815 million for the full year and by 30% year-over-year in the fourth quarter.
Significant New Business Wins
The company closed over $1 billion in new business wins for the second consecutive year, including a landmark $2.5 billion deal in the healthcare sector.
Expansion in Germany
Germany was identified as GXO's fastest-growing market, with a 60% year-over-year revenue increase, following the acquisition of Clipper Logistics.
Strategic M&A and Technology Advancements
The acquisition of Wincanton and advancements in AI-enabled warehousing have positioned GXO for future growth, with AI applications already delivering significant productivity improvements.
Lowlights
Customer Capacity Realignment Impact
GXO faced a $15 million EBITDA hit in Q1 2025 due to capacity realignment with a few large customers. This includes a mature site exit, site reallocation due to lower volumes, and FX and pension headwinds.
Slower Growth in U.K. Market
The retail environment in the U.K. softened due to recent government budget impacts, leading to cautious consumer spending.
Company Guidance
During the GXO Fourth Quarter and Full-Year 2024 Earnings Conference Call, the company provided guidance for 2025, expecting to achieve organic revenue growth of 3% to 6% and adjusted EBITDA between $840 million and $860 million. This guidance reflects strong core business growth, netted against capacity realignment with a few long-term customers. The company noted that the current foreign exchange environment and integration timing of the Wincanton acquisition also impacted this outlook. GXO's leadership anticipates an interim update on the CMA’s regulatory review soon. For 2024, GXO reported full-year revenue of $11.7 billion, with adjusted EBITDA of $815 million. The company highlighted key achievements, including a landmark $2.5 billion health sector deal and significant growth in the German market.GXO Logistics Corporate Events
M&A TransactionsRegulatory Filings and Compliance
GXO Logistics Faces CMA Scrutiny Over Wincanton Deal
Neutral
Feb 19, 2025
On February 19, 2025, the United Kingdom Competition and Markets Authority released an Interim Report on GXO Logistics’ acquisition of Wincanton plc. The report found no competition concerns for most of Wincanton’s business but noted potential competition issues regarding a small segment of sophisticated customers, representing less than 10% of Wincanton’s revenue. GXO Logistics disagrees with these provisional findings and plans to work with the CMA to achieve full clearance by the end of April.
Business Operations and StrategyFinancial Disclosures
GXO Logistics Releases 2024 Financial Measures Presentation
Neutral
Feb 12, 2025
On February 12, 2025, GXO Logistics announced the release of a slide presentation for future investor events, detailing their non-GAAP financial measures for 2024. These measures, which include adjusted EBITDA and free cash flow conversion, aim to provide insights into GXO’s operating performance and financial health, excluding non-core activities. This transparency is expected to assist investors in evaluating trends and comparing results across periods, underlining GXO’s continuous effort to optimize its business operations and strengthen its market position.
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.