January 4, 2024
Top 10 Stock XPO Logistics Sell Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: XPO Logistics – Top 10 Stock in Employee Satisfaction Leaders in the United States
XPO Logistics is listed as a top 10 stock on January 04, 2024 in the market index Employee Focus US because of its high performance in at least one of the Obermatt investment strategies. Only one consolidated Obermatt Rank is above-average. The company is growing above average, but all other facts speak against a stock purchase, especially the low market sentiment by professional investors. Based on the Obermatt 360° View of 15 (15% performer), Obermatt issues an overall sell recommendation for XPO Logistics on January 04, 2024.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Trucking |
| Index | Low Emissions, Employee Focus US, Low Waste, Recycling, S&P MIDCAP |
| Size class | XX-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View XPO Logistics Sell
| 360 METRICS | January 4, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 10 |
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| GROWTH | ||||||||
| GROWTH | 95 |
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| SAFETY | ||||||||
| SAFETY | 20 |
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| SENTIMENT | ||||||||
| SENTIMENT | 16 |
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| 360° VIEW | ||||||||
| 360° VIEW | 15 |
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ANALYSIS: With an Obermatt 360° View of 15 (better than 15% compared with alternatives), overall professional sentiment and financial characteristics for the stock XPO Logistics are critical, mostly below average. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators below average for XPO Logistics. The consolidated Growth Rank has a good rank of 95, which means that the company experiences above-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth, as well as stock returns. It ranks higher than 95% of competitors in the same industry. The other indicators are below average, namely the Value, Safety, and Sentiment Ranks.The Value Rank at 10 means that the share price of XPO Logistics is on the high side compared with its peers regarding revenues, profits, and invested capital. The stock price is higher than for 90% of alternative stocks in the same industry. The consolidated Safety Rank has a riskier rank of 20, which means that the company has a riskier financing structure than 80% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. The consolidated Sentiment Rank also has a low rank of 16, indicating professional investors are more pessimistic about the stock than for 84% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated 360° View of 15, XPO Logistics is worse than 85% of all alternative stock investment opportunities based on the Obermatt Method. This means that XPO Logistics shares are on the riskier side for investors. As only one of the consolidated Obermatt Ranks exhibits excellent performance, namely the above-average growth (Growth Rank of 95), it is a riskier stock investment proposition. Aside from the critical professional market sentiment (Sentiment Rank of 16), the company is rather risky when it comes to financing (Safety Rank of 20). The negative market view on XPO Logistics may be due to the high stock price (low value). A growth company like this may get too expensive at one point in time. If too many investors are desperate to join the party, they may drive stock prices above reasonable levels. While it is typical for growth companies to have low value, because investors are willing to pay more for companies that are expected to have high growth, the crucial question is: how much more do you pay for the stock of XPO Logistics compared with alternatives? You can use the following rule of thumb: The value rank shouldn’t be lower than one minus the growth rank. For example, if the growth rank is at 75, and the value rank is at 5, you should tread carefully. If the value rank is at 40, it still might be a good value (even though it is lower than 50). As market sentiment is critical, you should be careful with paying more than market-average for this stock and conduct further research into the company's future growth potential. ...read more
Sentiment Strategy: Professional Market Sentiment for XPO Logistics negative
ANALYSIS: With an Obermatt Sentiment Rank of 16 (better than 16% compared with alternatives), overall professional sentiment and engagement for the stock XPO Logistics is critical, mostly below average. The Sentiment Rank is based on consolidating four sentiment indicators, with three out of four metrics below average for XPO Logistics. Analyst Opinions are at a rank of 67 (better than 67% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. This is a good sign, were it not for Analyst Opinions Change with a low rank of 15, which means that currently, stock research experts are changing their opinions for the worse. In other words, they are getting more critical of a stock investment in XPO Logistics. The Professional Investors rank is also low at 43, meaning that professional investors hold less stock in this company than in 57% of alternative investment opportunities. Pros tend to invest in other companies. Even worse, Market Pulse has a low rank of 9, which means that the current professional news and professional social networks are critical of this company (more negative news than for 91% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 16 (less encouraging than 84% compared with investment alternatives), XPO Logistics has a reputation among professional investors that is far below that of its competitors. There are several negative sentiment signals, with only the Analyst Opinions Rank above average. This could be a stock with a long reputation for being positive but where things are worsening. Most analysts may not see it yet, but some have, and the professionals are already quite pessimistic. Proceed with caution when investing in this stock. ...read more
Value Strategy: XPO Logistics Stock Price Value low
ANALYSIS: With an Obermatt Value Rank of 10 (worse than 90% compared with alternatives), XPO Logistics shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with all four indicators below average for XPO Logistics. Price-to-Sales is 42 which means that the stock price compared with what market professionals expect for future profits is higher than 58% of comparable companies, indicating a low value concerning XPO Logistics's sales levels. Price-to-Book Capital (also referred to as market-to-book ratio) also has a low Price-to-Book Rank of 13, which means that both reliable company size indicators, sales, and invested capital cannot explain the high stock price of XPO Logistics. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 24 and Dividend Yield, which is lower than 99% of comparable companies, also make the stock more expensive compared with investment alternatives. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 10, is a sell recommendation based on XPO Logistics's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for XPO Logistics? One reason may be that the company is simply too popular. If enough people want a particular stock, its price can exceed reasonable levels. This is often the case for companies offering new and exciting products and everybody wants a piece of the action. Should you pay a lot for a hot stock such as XPO Logistics? It's risky, and even if the stock price continues to grow because of popular demand, it may return to more typical lower levels later. And that return can be sudden and quick, making it impossible for retail investors to exit on time. Sometimes, high prices are deserved. This is the case when it is justified to believe that the company will dominate a market with high profit margins. It has happened in the past for many technology companies and indeed for commercially successful pharmaceutical discoveries. Sometimes they last, sometimes, they get eaten alive. XPO Logistics may be such a type of stock. That would mean, retail investors should be careful, only considering investing a small part of their wealth in this exciting category and always being ready to lose more than half, if not all of the investment. ...read more
Growth Strategy: XPO Logistics Growth Momentum high
ANALYSIS: With an Obermatt Growth Rank of 95 (better than 95% compared with alternatives) for 2023, XPO Logistics shows one of the highest growth dynamics in its industry. Investors also speak of high momentum. The Growth Rank is based on consolidating four value indicators, with all four indicators above average for XPO Logistics. Sales Growth has a value of 62, which means that, currently, professionals expect the company to grow more than 62% of its competitors. The same is valid for Profit Growth with a value of 55 and for Capital Growth with 85. In addition, Stock Returns had an above-average rank value of 100, which means they have been higher than 100% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 95, is a buy recommendation for growth and momentum investors. Since all Growth Ranks are positive, XPO Logistics exhibits above-average growth momentum. This could be due to a uniquely strong market position, proprietary technology, or an extensive corporate acquisition strategy. Growth investors will find this an attractive investment opportunity, unless they expect that the current phase is transitory and will deteriorate in the future. The current performance could also be a temporary recovery from a very low point, such as a turn-around situation. In the case of a turn-around, the current performance may or may not be followed by a continuing positive development. ...read more
Safety Strategy: XPO Logistics Debt Financing Safety risky
| SAFETY METRICS | January 4, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 14 |
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| REFINANCING | ||||||||
| REFINANCING | 40 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 33 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 20 |
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ANALYSIS: With an Obermatt Safety Rank of 20 (better than 20% compared with alternatives), the company XPO Logistics has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of XPO Logistics is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with all three metrics below average for XPO Logistics. Liquidity is at 33, meaning that the company generates less profit to service its debt than 67% of its competitors. This indicates that the company is on the riskier side when it comes to debt service. Even worse, Leverage is at a rank of 14, meaning the company has an above-average debt-to-equity ratio. It has more debt than 86% of its competitors. Finally, Refinancing is at a rank of 40 which means that the portion of the debt about to be refinanced is above average. It has more debt in the refinancing stage than 60% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 20 (worse than 80% compared with alternatives), XPO Logistics has a financing structure that is significantly riskier than that of its competitors. This combination is rather dangerous in most situations. Only very promising companies with bright future outlooks and stellar reputations can operate with such risky financing.
Combined financial peformance: XPO Logistics Lowest Financial Performance
| COMBINED PERFORMANCE | January 4, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 10 |
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| GROWTH | ||||||||
| GROWTH | 95 |
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| SAFETY | ||||||||
| SAFETY | 33 |
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| COMBINED | ||||||||
| COMBINED | 23 |
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ANALYSIS: With an Obermatt Combined Rank of 23 (worse than 77% compared with investment alternatives), XPO Logistics (Trucking, USA) shares have lower financial characteristics compared with similar stocks. Shares of XPO Logistics are low in value (priced high) with a consolidated Value Rank of 10 (worse than 90% of alternatives), and are riskily financed (Safety Rank of 20, which means above-average debt burdens) but show above-average growth (Growth Rank of 95). ...read more
RECOMMENDATION: A Combined Rank of 23, is a sell recommendation based on XPO Logistics's financial characteristics. As the company XPO Logistics shows low value with an Obermatt Value Rank of 10 (90% of comparable investments are less expensive), investors should look at the other ranks. In this case, growth is expected to be above-average, better than 95% of comparable companies (Obermatt Growth Rank is 95). This is a typical case. Companies with above average growth tend to cost more than stocks with slower growth expectations. If this is a high-growth company, the low Obermatt Safety Rank of 20 is a good sign. The more debt a well-performing company has, the higher the returns to shareholders. However, if growth turns negative or interest rates increase, high debt may become a burden. If you believe the future is bright for XPO Logistics, even a low-value company (in terms of its key financial indicators) can be a good investment. ...read more
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