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RXO, Inc. (RXO)
NYSE:RXO
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RXO, Inc.
(NYSE:RXO)
46Neutral
Positive Factors
Business Strategy
Management emphasized idiosyncratic levers to drive earnings higher from here regardless of the cycle.
Mergers and Acquisitions
RXO improved synergy gains highlight its ability to purchase assets at impressive levels at a cycle trough, setting it up well for the cycle turn.
Negative Factors
Financial Guidance
Q1 guidance calls for brokerage volume declines of mid-to-high-single digits despite more than doubling brokerage biz with Coyote acquisition.
Market Concerns
The stock pullback stems from concerns on the speed and magnitude of decline in Legacy RXO/Coyote earnings, Coyote’s legacy contract to UPS (and its Amazon business), and prolonged freight market weakness.
RXO, Inc. (RXO) vs. S&P 500 (SPY)
Market Cap
$3.08B
Dividend YieldN/A
Average Volume (3M)1.33M
Price to Earnings (P/E)―
Beta (1Y)1.17
Revenue Growth15.86%
EPS Growth-6302.63%
CountryUS
Employees7,540
SectorIndustrials
Sector Strength65
IndustryTrucking
Share Statistics
EPS (TTM)-2.12
Shares Outstanding163,327,710
10 Day Avg. Volume1,228,000
30 Day Avg. Volume1,332,320
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.67
Price to Cash Flow (P/CF)-108.40
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$22.86Price Target Upside21.21% Upside
Rating ConsensusHold
Number of Analyst Covering15
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.'s financial performance in 2024 was challenging, characterized by declining revenues, profitability, increased leverage, and weaker cash flows. Despite a strong equity position, high debt levels 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.45
Neutral
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
Neutral
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.40
Negative
| 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
18.86
Price Trends
21.26
Negative
24.18
Negative
25.88
Negative
Market Momentum
-0.55
Negative
44.29
Neutral
64.36
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 18.86 is below the 20-day moving average (MA) of 19.04, below the 50-day MA of 21.26, and below the 200-day MA of 25.88, indicating a neutral trend. The MACD of -0.55 indicates Negative momentum. The RSI at 44.29 is Neutral, neither overbought nor oversold. The STOCH value of 64.36 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 (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $16.49B | 20.95 | 35.12% | 1.22% | 13.98% | 14.29% | |
68 Neutral | $11.96B | 26.21 | 29.65% | 2.43% | 0.73% | 41.65% | |
67 Neutral | $5.20B | 26.73 | 20.03% | 0.96% | -9.13% | -25.11% | |
66 Neutral | $12.56B | 33.12 | 27.07% | ― | 4.22% | 105.29% | |
65 Neutral | $14.61B | 26.30 | 14.06% | 1.18% | -5.79% | -20.32% | |
62 Neutral | $8.05B | 13.60 | 4.04% | 3.11% | 3.70% | -14.19% | |
46 Neutral | $3.08B | ― | -25.84% | ― | 15.86% | -6302.63% |
* Industrials Sector Average
Performance Comparison
RXO
RXO, Inc.
19.10
-2.52
-11.66%
CHRW
CH Robinson
102.40
30.89
43.20%
EXPD
Expeditors International
120.25
2.61
2.22%
XPO
XPO
107.58
-14.27
-11.71%
JBHT
JB Hunt
147.95
-46.57
-23.94%
LSTR
Landstar System
150.20
-35.90
-19.29%
RXO, Inc. Earnings Call Summary
Earnings Call Date: Feb 5, 2025 | % Change Since: -25.34% | Next Earnings Date: May 1, 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.Highlights
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.
Lowlights
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
M&A TransactionsBusiness Operations and StrategyFinancial Disclosures
RXO, Inc. Reports Q4 2024 Financial Results
Neutral
Feb 5, 2025
On February 5, 2025, RXO reported its financial results for the fourth quarter of 2024, highlighting a successful integration of Coyote Logistics and increased synergies. Despite a GAAP net loss of $20 million, the company achieved a 10% sequential growth in brokerage volume and a 15% year-over-year growth in last mile stops, with revenue reaching $1.7 billion. The company remains optimistic about its strategic investments and increased scale, positioning itself well for future growth despite a soft freight market.
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.