RXO (NYSE:RXO) Issues Earnings Results, Beats Estimates By $0.02 EPS

RXO (NYSE:RXO) released its quarterly earnings data on Thursday. The company reported $0.06 earnings per share for the quarter, topping analysts’ consensus estimates of $0.04 by $0.02, FiscalAI reports. The company had revenue of $1.77 billion for the quarter, compared to analyst estimates of $1.63 billion. RXO had a negative return on equity of 0.98% and a negative net margin of 1.72%.The firm’s revenue for the quarter was up 25.0% compared to the same quarter last year. During the same quarter in the previous year, the company posted $0.04 earnings per share.

Here are the key takeaways from RXO’s conference call:

• Brokerage momentum improved significantly: truckload volume grew 2% year over year, outperforming the market, while truckload gross profit per load increased 11% sequentially as spot mix rose 900 basis points to 42%.
• RXO raised confidence in near-term performance, citing continued July strength, a 50% truckload spot mix, and expectations for low- to mid-single-digit brokerage volume growth in the third quarter. The company expects third-quarter adjusted EBITDA of $35 million to $45 million and sees a path to the high end.
• Complementary businesses added support, with Last Mile stops up 3% and Managed Transportation winning approximately $100 million of freight under management in Q2 and another $100 million in July. Management also said managed expedite volume rose nearly 30% year over year.
• Agentic AI deployment is gaining traction, with five times more spot quotes processed through the email agent and a 25% sequential increase in digital carrier offers; management said the tools are improving volume, margins, productivity, and service while reducing headcount intensity.
• Last Mile is expected to weaken more than normal seasonality in Q3 because of softer customer demand and higher carrier costs, creating a sequential headwind of approximately $3 million to $5 million. Adjusted free cash flow was negative $42 million in Q2 due primarily to working-capital needs, while net leverage stood at 4.1 times.

RXO Trading Up 7.7%

Shares of NYSE RXO traded up $1.55 during mid-day trading on Friday, reaching $21.79. 2,133,694 shares of the company’s stock were exchanged, compared to its average volume of 2,203,756. The company’s 50-day moving average is $26.10 and its 200-day moving average is $20.09. The company has a debt-to-equity ratio of 0.30, a quick ratio of 1.27 and a current ratio of 1.27. The firm has a market capitalization of $3.59 billion, a price-to-earnings ratio of -35.72 and a beta of 2.10. RXO has a 52-week low of $10.43 and a 52-week high of $29.90.

Institutional Inflows and Outflows

Hedge funds have recently bought and sold shares of the stock. Thrivent Financial for Lutherans lifted its stake in shares of RXO by 1.0% during the 2nd quarter. Thrivent Financial for Lutherans now owns 104,861 shares of the company’s stock worth $1,648,000 after purchasing an additional 1,007 shares during the period. Geneos Wealth Management Inc. purchased a new stake in shares of RXO in the first quarter valued at $30,000. Bank of Montreal Can grew its position in shares of RXO by 14.9% in the fourth quarter. Bank of Montreal Can now owns 12,332 shares of the company’s stock valued at $156,000 after purchasing an additional 1,599 shares during the period. Larson Financial Group LLC increased its stake in RXO by 146.5% in the third quarter. Larson Financial Group LLC now owns 2,766 shares of the company’s stock valued at $43,000 after purchasing an additional 1,644 shares during the last quarter. Finally, Quarry LP acquired a new position in RXO in the third quarter valued at $33,000. Hedge funds and other institutional investors own 92.73% of the company’s stock.

Key Stories Impacting RXO

Here are the key news stories impacting RXO this week:

• Positive Sentiment: RXO highlighted market-share gains and profitable volume growth, including a 2% increase in truckload brokerage volume and a record sequential improvement in gross profit per load. Market Share Gains and Improved Profitability Drive Strong Second-Quarter Results for RXO
• Positive Sentiment: The earnings and revenue beats, along with stronger-than-expected operating metrics, helped drive investor enthusiasm and a positive premarket reaction. RXO Q2 Earnings and Revenues Surpass Estimates
• Positive Sentiment: Citizens JMP upgraded RXO from “market perform” to “outperform” and set a $30 price target, while Truist maintained a “buy” rating with a $28 target, both implying meaningful potential upside. Analyst Ratings
• Neutral Sentiment: Citi lowered its price target from $30 to $23 and shifted to a “neutral” rating, reflecting more cautious expectations despite the quarterly beat. Citi Analyst Action
• Negative Sentiment: Some analysis argues that RXO’s strong revenue growth was driven largely by higher freight rates and fuel prices, while gross profit declined and adjusted EBITDA remained flat. Rising working-capital requirements and leverage also raise concerns about the quality and durability of the recovery. RXO Still Unable To Capture Upcycle Economics

Analyst Upgrades and Downgrades

Several research firms have recently commented on RXO. The Goldman Sachs Group lifted their price target on RXO from $18.00 to $20.00 and gave the stock a “neutral” rating in a report on Thursday, July 16th. Susquehanna raised their price objective on shares of RXO from $18.00 to $20.00 and gave the stock a “negative” rating in a research report on Tuesday, July 14th. Benchmark restated a “hold” rating on shares of RXO in a research report on Tuesday, July 28th. Wells Fargo & Company boosted their target price on shares of RXO from $15.00 to $22.00 and gave the company an “equal weight” rating in a report on Friday, May 8th. Finally, BMO Capital Markets began coverage on shares of RXO in a research note on Monday, July 13th. They issued an “outperform” rating and a $35.00 price target for the company. Five analysts have rated the stock with a Buy rating, ten have given a Hold rating and four have assigned a Sell rating to the company’s stock. According to data from MarketBeat.com, the stock currently has a consensus rating of “Hold” and a consensus target price of $23.85.

About RXO

RXO Inc (NYSE: RXO) is a leading asset-light provider of digital freight brokerage and managed transportation solutions. The company leverages a proprietary technology platform to connect shippers with a network of third-party carriers, enabling optimized route planning, real-time shipment tracking, and dynamic pricing. RXO’s end-to-end service model spans full truckload, less-than-truckload (LTL), intermodal and cross-border freight movements, designed to improve efficiency and reduce transportation costs for its customers.

Operating primarily across North America, RXO serves a diverse base of shippers in industries ranging from retail and consumer goods to manufacturing and automotive.