Why XPO Logistics Stock Is Trending Upward in 2018



What drove XPO Logistics’ stock price?

XPO Logistics (XPO) is the third-largest road carrier in the United States based on fleet size. XPO continues to innovate its services for its transportation and logistics businesses by harnessing technology. The company is also ramping up its sales team and cross-selling its services.

A major factor boosting XPO’s stock price has been the company’s strong financial performance. The company had revenue of $4.2 billion, a rise of 18.4% year-over-year, and an adjusted net income of $80.9 million in the first quarter. XPO declared adjusted EPS of $0.61 in the quarter.

These factors have resulted in XPO being on track to post an adjusted EBITDA of $1.6 billion and free cash flow of $625.0 million in 2018. We’ll discuss these factors in greater detail later in this series.

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XPO’s stock price movement

XPO Logistics stock closed at $107.13 on May 29. The Dow Jones Transportation Average Index, the transportation sector benchmark, was down 1.3% and closed at 10,755.33 on the same day. On May 29, XPO had a market cap of $12.9 billion.

The stock has seen a return of 102.8% in the past year and has a 52-week high of $111.09. In contrast, the SPDR S&P 500 ETF (SPY) has delivered a 13.4% return during the same period. Now let’s look at the stock returns of XPO’s peers over the last year:

  • C.H. Robinson Worldwide (CHRW): 33.8%
  • Expeditors International of Washington (EXPD): 39.1%
  • J.B. Hunt Transport Services (JBHT): 49.5%
  • Old Dominion Freight Lines (ODFL): 73.5%
  • YRC Worldwide (YRCW): 14.6%
  • Saia (SAIA): 77.3%

Series highlights

Citing Gartner earlier this month, XPO Logistics announced that it now occupied the leading position in Gartner’s 2018 Magic Quadrant for Third-Party Worldwide Logistics. XPO is the second-largest LTL (less-than-truckload) services provider in the United States. The company’s supply-chain solutions portfolio includes freight brokerage, LTL services, last-mile services, and other logistics services.

In this series, we’ll take a closer look at XPO’s businesses and their journey ahead in 2018. We’ll also consider analysts’ recommendations on the stock in our investment analysis on this major US trucker.


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