GICS Sector : Industrials
RXO 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. Show Full description
RXO's financial performance in the fourth quarter was marked by a 4% decline in brokerage volume and a 12% decline in truckload volume. The company's gross margin was 14.8%, and its adjusted EBITDA was $17 million. The actual EPS came out at -0.07, relative to estimates at -0.04. The revenue was impacted by the soft freight market and capacity reductions, but the company's managed transportation business continued to win, with over $200 million in new freight under management.
Publication Date: Feb -16
The company's operational performance was mixed, with LTL volume increasing by 31% and truckload volume declining by 12%. The contract business increased by 100 basis points sequentially, while spot represented 28% of the truckload volume in the quarter. The company's AI efforts are driving improvements across four key pillars: volume, margin, productivity, and service. As Drew Wilkerson noted, "Our AI capabilities have resulted in a 24% increase in digital bids per carrier with a new AI-based load recommendation in RXO Connect."
For 2026, RXO expects to generate between $5 million and $12 million of adjusted EBITDA in the first quarter. The company also expects to make several strategic investments, including a new asset-based lending facility and a $450 million facility that replaces its previous $600 million revolver. The guidance suggests a challenging first quarter, with total brokerage volume expected to decline 5-10% year-over-year.
Looking at the valuation metrics, RXO's P/E Ratio is -22.79, indicating that the company is currently unprofitable. The P/S Ratio is 0.39, which is relatively low compared to the industry average. The EV/EBITDA ratio is 85.53, suggesting that the company's enterprise value is significantly higher than its EBITDA. These metrics suggest that the market is pricing in significant growth potential, but also reflects the company's current challenges.
Despite the current challenges, RXO is taking aggressive actions to improve results, including reducing buy rate volatility, growing its SMB business, and growing stable sources of EBITDA. The company's focus on best-in-class service and continued investment in transformational AI capabilities is expected to drive significant long-term earnings and free cash flow growth. Analysts estimate next year's revenue growth at 6.8%, indicating a positive outlook for the company's future performance.
RXO (NYSE:RXO) Stock Price Down 8.6% – What’s Next?
Mar -08
Rxo Inc (NYSE:RXO) Given Average Rating of “Hold” by Brokerages
Mar -06
Haoxin (NASDAQ:HXHX) vs. RXO (NYSE:RXO) Head-To-Head Survey
Mar -03
Cary Street Partners Financial LLC Buys New Stake in Rxo Inc $RXO
Mar -01
RXO Announces Participation at Upcoming Investor Conferences
Feb -24
ZTO vs. RXO: Which Stock Is the Better Value Option?
Feb -23
RXO Releases the Latest Curve Freight Market Forecast
Feb -23
RXO CEO on fears of AI disruption: This business is about scale, relationships, and service
Feb -19
RXO's truck brokerage growth is driven by increasing demand for flexible logistics solutions, strategic carrier partnerships, and investments in digital brokerage technology. Additionally, the company's focus on providing real-time visibility, data-driven insights, and exceptional customer service has enabled it to capitalize on market opportunities and drive growth.
RXO's Last Mile segment growth is driven by increasing e-commerce demand, rising consumer expectations for fast and flexible delivery, and strategic partnerships with retailers and manufacturers. Additionally, investments in technology and operational efficiency have enabled RXO to scale and expand its last-mile capabilities, contributing to its 7% growth.
RXO's Managed Transportation growth is driven by increasing demand for supply chain visibility, rising adoption of digital brokerage platforms, and growing need for cost savings and efficiency in logistics. Additionally, RXO's expertise in freight management, strategic partnerships, and investments in technology and data analytics are key contributors to its 5% growth.
RXO's freight forwarding growth is driven by increasing e-commerce demand, strategic carrier partnerships, and investments in digital brokerage platforms. Additionally, the company's focus on operational efficiency, cost savings, and customized logistics solutions for shippers also contribute to its growth. Furthermore, RXO's expansion into new markets and its ability to adapt to changing market conditions have also fueled its growth.
RXO's 3% growth is driven by increasing demand for logistics services, expansion into new markets, and strategic acquisitions. Additionally, the company's focus on digital transformation, cost savings initiatives, and strong operational execution have contributed to its growth momentum.
RXO's truck brokerage service connects shippers with a network of qualified carriers, providing flexible and reliable transportation solutions.
RXO's managed transportation service provides customized logistics solutions, including freight audit and payment, to help shippers optimize their transportation networks.
RXO's dedicated capacity service provides shippers with a dedicated fleet of trucks and drivers, ensuring consistent and reliable transportation solutions.
RXO's warehousing and distribution service provides shippers with secure and efficient storage and distribution solutions.
RXO's last mile delivery service provides shippers with fast and flexible delivery solutions, ensuring timely and efficient delivery to customers.
RXO, Inc. operates in a highly competitive industry, but the threat of substitutes is mitigated by the company's strong brand recognition and customer loyalty.
RXO, Inc. has a large customer base, but the bargaining power of customers is high due to the availability of alternative service providers.
RXO, Inc. has a diverse supplier base, which reduces the bargaining power of suppliers. The company's strong relationships with suppliers also mitigate this risk.
While there are barriers to entry in the industry, RXO, Inc. faces a moderate threat from new entrants due to the potential for disruption from new technologies and business models.
RXO, Inc. operates in a highly competitive industry, and the intensity of rivalry is high due to the presence of several established players and the potential for new entrants.
| Value | |
|---|---|
| Debt Weight | 48.44% |
| Debt Cost | 3.95% |
| Equity Weight | 51.56% |
| Equity Cost | 9.53% |
| WACC | 6.82% |
| Leverage | 93.94% |
Value: 1.2
Growth: 5.7
Quality: 8.2
Yield: 3.0
Momentum: 1.5
Volatility: 8.3
1-Year Total Return ->
Value: 5.9
Growth: 3.4
Quality: 5.1
Yield: 3.0
Momentum: 1.5
Volatility: 7.0
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Value: 6.4
Growth: 3.7
Quality: 4.4
Yield: 3.0
Momentum: 1.0
Volatility: 6.3
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Value: 3.1
Growth: 5.6
Quality: 4.0
Yield: 0.0
Momentum: 3.0
Volatility: 8.0
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Value: 4.8
Growth: 7.4
Quality: 6.0
Yield: 0.0
Momentum: 1.5
Volatility: 3.3
1-Year Total Return ->
Value: 5.8
Growth: 1.2
Quality: 4.4
Yield: 0.0
Momentum: 0.5
Volatility: 2.3
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