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
The company's third-quarter financial performance was marked by a slight miss on expectations, with revenues coming in at $1.4 billion, slightly below outlook. Gross margin was 16.5%, and adjusted EBITDA was $32 million, impacted by increased cost of transportation, demand weakness, and continued headwinds in the automotive sector. Earnings per share (EPS) was $0.01, compared to analyst estimates of $0.03. The company's brokerage gross margin was at the low end of its outlook, with gross profit per load moderating due to softer demand and tighter capacity.
Publication Date: Nov -11
Despite the challenges, RXO's overall brokerage volume grew 1% year-over-year, driven by a 43% increase in less-than-truckload volume. Truckload volume declined 11% year-over-year but increased 1% sequentially. Last mile stops grew 12% year-over-year, marking the fifth consecutive quarter of double-digit growth. The company's technology offerings continue to drive improvements across key pillars, including volume, margin, productivity, and service.
RXO expects fourth-quarter adjusted EBITDA to be between $20 million and $30 million, with the biggest driver being volume weakness in its last mile business, counter to typical seasonality. The company anticipates a muted peak season and weak demand trends across all its lines of business in the fourth quarter. For 2026, RXO continues to expect CapEx to be between $45 million and $55 million, down materially year-over-year.
With a P/S Ratio of 0.42 and an EV/EBITDA of 49.74, RXO's valuation metrics suggest that the market is pricing in a significant recovery in the company's financial performance. Analysts estimate next year's revenue growth at 4.4%. The company's ROE is -5.43%, and ROIC is -2940.91%, indicating significant challenges in generating returns on equity and invested capital.
Drew Wilkerson, RXO's management, noted that the recent supply exits are likely to be sustainable and will result in a major structural change to the industry, driven by enforcement of non-domiciled CDL restrictions and English language proficiency. This, he believes, will create a much sharper inflection as the market recovers, ultimately benefiting the company. As Jamie Harris stated, the company has a strong balance sheet and is well-positioned to adapt to changing market conditions.
RXO, Inc. (RXO) Presents at Goldman Sachs Industrials and Materials Conference 2025 Transcript
Dec -03
356,918 Shares in Rxo Inc $RXO Bought by Edgestream Partners L.P.
Dec -03
RXO, Inc. (RXO) Presents at UBS Global Industrials and Transportation Conference Transcript
Dec -03
Comparing RXO (NYSE:RXO) and Grupo Aeroportuario del Sureste (NYSE:ASR)
Dec -02
AXQ Capital LP Purchases New Holdings in Rxo Inc $RXO
Nov -25
RXO Announces Participation at Upcoming Investor Conferences
Nov -17
RXO, Inc. (RXO) Q3 2025 Earnings Call Transcript
Nov -09
Johnson Fistel Continues Investigation on Behalf of RXO, Inc. (RXO) Shareholders Who Have Incurred Losses
Nov -06
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: 6.4
Growth: 3.4
Quality: 5.2
Yield: 5.0
Momentum: 2.0
Volatility: 7.0
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Value: 1.0
Growth: 5.7
Quality: 8.2
Yield: 3.0
Momentum: 1.0
Volatility: 8.3
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Value: 7.0
Growth: 3.7
Quality: 4.5
Yield: 3.0
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Volatility: 6.7
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Value: 1.8
Growth: 5.7
Quality: 5.2
Yield: 0.0
Momentum: 3.0
Volatility: 8.3
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Value: 5.0
Growth: 7.4
Quality: 6.0
Yield: 0.0
Momentum: 1.5
Volatility: 3.3
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Value: 6.6
Growth: 1.2
Quality: 3.0
Yield: 0.0
Momentum: 0.5
Volatility: 3.3
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