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XPO (XPO)
NYSE:XPO
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XPO
(NYSE:XPO)66Neutral
Positive Factors
Customer Base Growth
XPO has added 10,000 new local customers and plans to grow that channel in the next several years which will benefit yield and the OR.
Operating Performance
XPO's yield improvement efforts are resulting in solid operating margins despite a weak industrial economy.
Negative Factors
European Performance
Europe adjusted EBITDA was $27m down 25.0% YoY and below our $32m target.
XPO (XPO) vs. S&P 500 (SPY)
Market Cap
$13.69B
Dividend YieldN/A
Average Volume (3M)1.55M
Price to Earnings (P/E)36.1
Beta (1Y)1.82
Revenue Growth4.22%
EPS Growth105.29%
CountryUS
Employees38,000
SectorIndustrials
Sector Strength66
IndustryTransportation
Share Statistics
EPS (TTM)3.23
Shares Outstanding117,242,600
10 Day Avg. Volume1,855,400
30 Day Avg. Volume1,545,349
Financial Highlights & Ratios
PEG Ratio0.34
Price to Book (P/B)N/A
Price to Sales (P/S)1.74
Price to Cash Flow (P/CF)18.60
P/FCF Ratio18.60
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$158.61Price Target Upside35.80% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering18
XPO Business Overview & Revenue Model
Company DescriptionXPO (XPO) is a leading provider of innovative transportation solutions, primarily operating within the logistics and supply chain sector. The company specializes in less-than-truckload (LTL) transportation services, where it consolidates freight shipments from multiple customers into a single truckload to optimize efficiency and cost-effectiveness. XPO serves a wide range of industries, including retail, manufacturing, and e-commerce, offering them comprehensive freight management and logistics solutions.
How the Company Makes MoneyXPO makes money primarily through its less-than-truckload (LTL) transportation services, which account for the majority of its revenue. The company charges customers based on the size, weight, and distance of freight shipments. In addition, XPO leverages its extensive network of transportation assets and logistics technology to optimize routes and reduce operational costs, increasing its profitability. Strategic partnerships with key industry players and investments in technology also contribute to XPO's revenue by enhancing service efficiency and expanding its customer base.
XPO Financial Statement Overview
Summary
XPO shows strong financial performance with a notable recovery in revenue and increased profitability. The income statement and cash flow are positive, but the balance sheet indicates high leverage, which could be a risk if not managed properly.Income Statement
XPO's income statement shows a strong recovery in revenue, with a growth rate of 4.23% from 2023 to 2024 and improved profitability. The gross profit margin is solid at 100% due to the same value for revenue and gross profit, indicating effective cost management. The net profit margin increased to 4.79% in 2024 from 2.44% in 2023, reflecting enhanced operational efficiency. However, the EBIT and EBITDA margins, while improved, suggest room for further profitability enhancement.75
Positive
Balance Sheet
The balance sheet presents a mixed picture. The debt-to-equity ratio is high, at 2.57 in 2024, indicating significant leverage which could pose financial risk. However, the return on equity has improved to 24.17%, demonstrating that the company is generating solid returns on equity. The equity ratio of 25.80% in 2024 suggests that a moderate portion of the assets is financed by shareholders' equity, which is stable but could be improved.68
Positive
Cash Flow
XPO's cash flow statement reveals a positive trend, with free cash flow turning positive in 2024. The operating cash flow to net income ratio of approximately 2.09 indicates strong cash generation relative to net income. However, the free cash flow growth rate shows a significant swing from negative to positive, reflecting improved capital expenditure management, yet past volatility should be monitored.72
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 8.07B | 7.74B | 7.72B | 12.81B | 16.25B | Gross Profit |
| 915.00M | 770.00M | 1.23B | 1.99B | 2.56B | EBIT |
| 660.00M | 438.00M | 604.00M | 616.00M | 391.00M | EBITDA |
| 1.19B | 860.00M | 941.00M | 741.00M | 727.00M | Net Income Common Stockholders |
| 387.00M | 189.00M | 184.00M | 336.00M | 110.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 246.00M | 412.00M | 460.00M | 260.00M | 2.05B | Total Assets |
| 7.71B | 7.49B | 6.27B | 8.71B | 16.17B | Total Debt |
| 4.12B | 4.11B | 3.25B | 4.49B | 8.98B | Net Debt |
| 3.87B | 3.70B | 2.79B | 4.23B | 6.93B | Total Liabilities |
| 6.11B | 6.23B | 5.26B | 7.57B | 13.32B | Stockholders Equity |
| 1.60B | 1.27B | 1.01B | 1.14B | 2.71B |
| Cash Flow | Free Cash Flow | |||
| 19.00M | -851.00M | 311.00M | 408.00M | 359.00M | Operating Cash Flow |
| 808.00M | 682.00M | 832.00M | 721.00M | 885.00M | Investing Cash Flow |
| -702.00M | -1.50B | 245.00M | -277.00M | -357.00M | Financing Cash Flow |
| -226.00M | 761.00M | -862.00M | -2.23B | 1.14B |
XPO Technical Analysis
Negative
116.80
Price Trends
135.45
Negative
136.66
Negative
123.32
Negative
Market Momentum
-5.47
Positive
29.56
Positive
14.98
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For XPO, the sentiment is Negative. The current price of 116.8 is below the 20-day moving average (MA) of 133.91, below the 50-day MA of 135.45, and below the 200-day MA of 123.32, indicating a bearish trend. The MACD of -5.47 indicates Positive momentum. The RSI at 29.56 is Positive, neither overbought nor oversold. The STOCH value of 14.98 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $16.31B | 20.67 | 36.44% | 1.23% | 13.98% | 14.29% | |
68 Neutral | $37.19B | 31.94 | 27.94% | 0.60% | -0.88% | -2.79% | |
67 Neutral | $5.46B | 28.02 | 20.15% | 0.91% | -9.13% | -25.11% | |
66 Neutral | $13.69B | 36.12 | 24.17% | ― | 4.22% | 105.29% | |
65 Neutral | $15.76B | 28.37 | 14.22% | 1.10% | -5.79% | -20.32% | |
63 Neutral | $11.67B | 25.49 | 27.04% | 2.45% | 0.73% | 41.65% | |
62 Neutral | $8.11B | 13.34 | 1.17% | 3.02% | 4.16% | -15.14% |
* Industrials Sector Average
Performance Comparison
XPO
XPO
116.80
-8.51
-6.79%
CHRW
CH Robinson
98.35
27.74
39.29%
EXPD
Expeditors International
118.13
-1.43
-1.20%
JBHT
JB Hunt
157.62
-40.21
-20.33%
LSTR
Landstar System
154.52
-25.15
-14.00%
ODFL
Old Dominion Freight
175.00
-41.85
-19.30%
XPO Earnings Call Summary
Earnings Call Date: Feb 6, 2025 | % Change Since: -14.31% | Next Earnings Date: May 2, 2025
Earnings Call Sentiment Positive
XPO delivered strong financial performance with record revenue growth and significant EBITDA increase. The company achieved notable operational efficiencies and margin expansions in a challenging freight environment. However, the decline in LTL segment revenue due to lower fuel surcharges and a soft freight environment were negative factors.Highlights
Record Revenue Growth
For the full year, XPO grew revenue by 4% to a record $8.1 billion company-wide.
Significant EBITDA Increase
Generated $1.3 billion of adjusted EBITDA, a 27% increase from the prior year.
LTL Margin Expansion
Achieved a 260 basis point improvement in adjusted operating ratio, outperforming industry targets.
Operational Efficiency
Reduced purchase transportation cost by 32% and improved maintenance cost per mile by 10% year-over-year.
Strong Yield Growth
For the full year, XPO grew yield, excluding fuel, by 7.8% year-over-year.
Fleet Age Reduction
Ended 2024 with an average fleet age of 4.1 years, one of the youngest in the industry.
European Market Growth
Increased full year segment revenue by 3% in a soft macro environment, outperforming the industry.
Lowlights
Decline in LTL Segment Revenue
LTL segment revenue was down 3% year-over-year, largely due to a 23% decline in fuel surcharge revenue tied to diesel prices.
Soft Freight Environment
Despite strong performance, the company operated in a historically soft freight environment, impacting potential growth.
Tonnage Decline
Fourth quarter showed a 5.7% decline in tonnage per day year-over-year.
Higher Depreciation Expense
Depreciation expense increased by 16% or $11 million, reflecting ongoing investments.
Company Guidance
During the XPO Q4 2024 earnings call, the company provided detailed guidance and metrics showcasing significant financial growth and operational improvements. XPO reported a 4% year-over-year revenue increase, reaching a record $8.1 billion, and a 27% rise in adjusted EBITDA to $1.3 billion. The adjusted diluted EPS also surged by 31% to $3.83. In the Less-Than-Truckload (LTL) segment, XPO achieved a 260 basis point improvement in the adjusted operating ratio, driven by a 7.8% yield growth excluding fuel and a 32% reduction in purchase transportation costs. The company also enhanced its service capabilities by integrating 25 new service centers and reducing outsourced linehaul miles to 10.7% of total miles. XPO's strategic investments resulted in a 30% excess door capacity and a young fleet with an average age of 4.1 years. Looking forward, XPO expects to achieve a 150 basis point improvement in its operating ratio in 2025, driven by sustained yield growth and cost efficiencies.XPO Corporate Events
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.
Private Placements and FinancingBusiness Operations and Strategy
XPO Announces New Refinancing and Credit Agreements
Positive
Feb 26, 2025
On February 26, 2025, XPO, Inc. announced a refinancing amendment to its Senior Secured Term Loan Credit Agreement, originally dated October 30, 2015. This amendment includes a new term loan B facility totaling $1.1 billion, split into two parts: $700 million and $400 million, with maturities in 2028 and 2031, respectively. The proceeds will refinance existing loans, and the facilities are secured by the company’s assets. Additionally, XPO entered a new Revolving Credit Agreement with a $600 million facility, replacing its former ABL credit facility. This agreement allows for borrowing in U.S. and Canadian dollars, with the funds intended for working capital and general corporate purposes. The new agreements aim to strengthen XPO’s financial flexibility and operational capacity.
Business Operations and StrategyFinancial Disclosures
XPO Reports Strong Q4 2024 Financial Performance
Positive
Feb 6, 2025
In its fourth-quarter 2024 report, XPO, Inc. posted notable financial gains, including a 24% year-over-year increase in operating income, reaching $148 million, and a 15% rise in adjusted EBITDA to $303 million. The company’s performance highlights its successful implementation of strategies to enhance margin and earnings in its North American LTL segment, with improved operating ratios and reduced transportation expenses. The positive outcomes are attributed to strategic acquisitions, cost-efficiency measures, and an ongoing focus on providing best-in-class service, positioning XPO for continued growth and enhanced profitability.
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.