GXO Logistics, Inc. (GXO) | Investment Case

1. Company Snapshot

1.a. Company Description

GXO 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.

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1.b. Last Insights on GXO

GXO Logistics' recent performance has been driven by strong organic growth, strategic acquisitions, and improved financial management. The company's Q3 2025 earnings beat estimates, with record quarterly revenue of $3.4 billion, up 8% year-over-year. The Wincanton acquisition and increased adjusted EBITDA guidance have boosted investor confidence. Additionally, GXO's completion of its inaugural European bond offering, raising €500m, demonstrates its access to capital markets. Institutional investors, such as Boston Partners and Envestnet Asset Management, have also shown increased interest, with Boston Partners purchasing a $6.76 million stake and Envestnet boosting its holdings by 6.5%.

1.c. Company Highlights

Last Price	52.54
Change Percentage	0.75%
Open	52.09
Previous Close	52.15
Market Cap ( Millions)	6015
Volume	510111
Year High	57.99
Year Low	30.46
M A 50	52.37
M A 200	46.36

FCF Yield	5.75%
Dividend Yield	0.00%
ROE	3.03%
Debt / Equity	186.16%
Net Debt / EBIDTA	884.35%
Price To Book	2.04
Price Earnings Ratio	67.58
Price To FCF	17.4
Price To sales	0.47
EV / EBITDA	18.51

2. GXO's Strong Q3 Performance: A Promising Outlook

GXO reported a record revenue of $3.4 billion in Q3, with adjusted EBITDA growth of 13% to $251 million, and a significant increase in new contract wins, totaling $280 million, up 24% year-over-year. The company's EPS came in at $0.79, beating estimates of $0.78. The revenue growth was driven by a strong performance across various regions and verticals, with a notable increase in activity in strategic sectors such as life sciences, aerospace, and defense. The company's free cash flow in Q3 was $187 million, and it is on track to deliver its target adjusted EBITDA to free cash flow conversion for the full year.

Publication Date: Nov -10

                                    📋 Highlights
                                    Record Revenue::
                                                Q3 revenue reached $3.4 billion, establishing a new high for GXO.
Adjusted EBITDA Growth::
                                                Increased by 13% year-over-year to $251 million, with 100 bps sequential margin expansion.
Future Revenue Secured::
                                                $800 million for 2025 and nearly $700 million for 2026, bolstering full-year guidance confidence.
New Contract Wins::
                                                $280 million in Q3, up 24% YoY, with a $2.3 billion pipeline and 30%+ growth in life sciences/aerospace sectors.
Free Cash Flow::
                                                $187 million in Q3, on track for full-year EBITDA-to-cash flow conversion targets.

                                

Operational Highlights

The company is focusing on operational excellence, with a sharp commercial strategy on where to play and how to win. GXO is also investing in digital marketing and sales teams to drive organic growth, particularly in North America, where it sees a significant opportunity. The company has appointed Michael Jacobs as the new President of the Americas and Asia Pacific region, a seasoned supply chain veteran with a proven track record of managing complex supply chains. As Patrick Kelleher mentioned, "We're reallocating resources towards sales, solutions, and digital marketing to accelerate growth in North America."

Growth Prospects

GXO is well-positioned for growth, with a robust sales pipeline of $2.3 billion and a strong presence in high-growth verticals. The company expects to exceed $1 billion in new contract wins in 2025 and is confident in achieving its full-year EBITDA guidance of $865 million to $885 million. Analysts estimate next year's revenue growth at 6.1%, which suggests a moderate growth trajectory.

Valuation

GXO's current valuation metrics indicate a premium, with a P/E Ratio of 65.39 and an EV/EBITDA of 18.2. The company's P/S Ratio is 0.45, which is relatively reasonable given its growth prospects. The Free Cash Flow Yield is 5.94%, which is attractive. However, the Net Debt / EBITDA ratio is high at 8.84, which may be a concern. Overall, the valuation suggests that the market is pricing in a moderate growth trajectory, and the company's ability to deliver on its growth prospects will be crucial in justifying its current valuation.

3. NewsRoom

Stock Traders Purchase Large Volume of GXO Logistics Put Options (NYSE:GXO)

Dec -04

Source: defenseworld.net

Boston Partners Invests $6.76 Million in GXO Logistics, Inc. $GXO

Nov -29

Source: defenseworld.net

GXO Announces Completion of Inaugural European Bond Offering

Nov -24

Source: globenewswire.com

GXO's State-of-the-Art Distribution Center in Germany Earns Aerospace Certification

Nov -18

Source: globenewswire.com

Envestnet Asset Management Inc. Has $3.11 Million Stock Holdings in GXO Logistics, Inc. $GXO

Nov -16

Source: defenseworld.net

GXO Logistics, Inc. $GXO Shares Sold by Bank of Montreal Can

Nov -16

Source: defenseworld.net

What a New CEO Means for GXO Logistics

Nov -10

Source: fool.com

GXO Logistics, Inc. (GXO) Q3 2025 Earnings Call Transcript

Nov -05

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.20%)

6. Segments

Business Services

Expected Growth: 7.0%

The e-commerce industry is expected to continue growing, driving demand for logistics services. GXO Logistics, Inc.'s investments in technology and infrastructure will enable it to capture a larger share of this growing market, driving revenue growth in the Business Services segment. The growth rate is slightly higher than the global average due to the segment's strong positioning.

7. Detailed Products

Contract Logistics

Customized logistics solutions for businesses, including warehousing, inventory management, and order fulfillment

Transportation Management

End-to-end transportation services, including truckload, less-than-truckload, and intermodal transportation

Distribution and Fulfillment

Strategic distribution and fulfillment services, including e-commerce fulfillment, retail distribution, and reverse logistics

Warehouse Management

Comprehensive warehouse management services, including inventory management, order picking, and shipping

Value-Added Services

Customized value-added services, including packaging, labeling, and assembly

Supply Chain Optimization

Data-driven supply chain optimization services, including network optimization, transportation optimization, and inventory optimization

8. GXO Logistics, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for GXO Logistics, Inc. is medium due to the availability of alternative logistics providers and transportation modes.

Bargaining Power Of Customers

The bargaining power of customers is high due to the concentration of major retailers and manufacturers, giving them significant negotiating power over logistics providers like GXO Logistics, Inc.

Bargaining Power Of Suppliers

The bargaining power of suppliers is low due to the fragmented nature of the logistics industry, giving GXO Logistics, Inc. more negotiating power over its suppliers.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the logistics industry, including significant capital requirements and regulatory hurdles.

Intensity Of Rivalry

The intensity of rivalry is high due to the competitive nature of the logistics industry, with many established players competing for market share.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	42.52%
Debt Cost	3.95%
Equity Weight	57.48%
Equity Cost	12.61%
WACC	8.93%
Leverage	73.97%

11. Quality Control: GXO Logistics, Inc. passed 5 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Expeditors International of Washington

A-Score: 5.3/10

Value: 3.6

Growth: 5.0

Quality: 7.1

Yield: 2.0

Momentum: 5.0

Volatility: 9.0

1-Year Total Return ->

Aramark

A-Score: 4.6/10

Value: 4.3

Growth: 4.3

Quality: 3.4

Yield: 2.0

Momentum: 5.0

Volatility: 8.7

1-Year Total Return ->

Hub Group

A-Score: 4.2/10

Value: 6.0

Growth: 4.0

Quality: 6.1

Yield: 1.0

Momentum: 2.0

Volatility: 6.3

1-Year Total Return ->

J.B. Hunt Transport Services

A-Score: 3.9/10

Value: 3.7

Growth: 5.0

Quality: 5.4

Yield: 2.0

Momentum: 2.0

Volatility: 5.3

1-Year Total Return ->

XPO Logistics

A-Score: 3.5/10

Value: 2.0

Growth: 4.8

Quality: 3.9

Yield: 0.0

Momentum: 6.0

Volatility: 4.3

1-Year Total Return ->

GXO Logistics

A-Score: 3.4/10

Value: 3.1

Growth: 6.0

Quality: 2.2

Yield: 0.0

Momentum: 3.5

Volatility: 5.7

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

11.79%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

8.93%

GXO Logistics, Inc. - US36262G1013

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on GXO

1.c. Company Highlights

Average Growth

Average Quality

Stable Momentum

Revenues Miss

Earnings Miss

Lower Quality

Weak Momentum

Earnings Beats

Average Yield

Revenues Beats

Fairly Valued

2. GXO's Strong Q3 Performance: A Promising Outlook

Operational Highlights

Growth Prospects

Valuation

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.20%)

6. Segments

Business Services

Expected Growth: 7.0%

7. Detailed Products

Contract Logistics

Transportation Management

Distribution and Fulfillment

Warehouse Management

Value-Added Services

Supply Chain Optimization

8. GXO Logistics, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: GXO Logistics, Inc. passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

52.54$

Current Price

52.54$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA