RXO (NYSE:RXO) Posts Earnings Results, Misses Expectations By $0.03 EPS

RXO (NYSE:RXO) announced its earnings results on Friday. The company reported ($0.07) earnings per share (EPS) for the quarter, missing the consensus estimate of ($0.04) by ($0.03), FiscalAI reports. RXO had a negative net margin of 1.25% and a positive return on equity of 0.88%. The business had revenue of $1.47 billion for the quarter, compared to analysts’ expectations of $1.50 billion. During the same quarter in the prior year, the company posted $0.06 earnings per share. The firm’s quarterly revenue was down 11.9% compared to the same quarter last year.

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

• RXO reported an 11.9% brokerage gross margin and Q4 adjusted EBITDA of $17M, blaming a pronounced margin squeeze from industry capacity exits and regulatory-driven buy-rate spikes that increased purchased transportation costs faster than contractual rates.
• Management says its late-stage brokerage sales pipeline grew more than 50% year‑over‑year (driven by full truckload) and the company won >$200M of freight under management in Q4, which it expects to convert and drive truckload outperformance as early as mid‑2026.
• RXO replaced its $600M revolver with a tailored $450M asset‑based lending facility that lowers unused commitment costs, offers ~35 bps better current pricing, a $200M accordion, and a more flexible covenant structure.
• The firm has completed major tech integration (CRM, RXO Connect, Freight Optimizer) and is scaling AI initiatives that delivered ~19% productivity improvement and new tools (AI spot quote agent, agentic capacity sourcing) intended to structurally lift margin and throughput.
• RXO ended the quarter with $17M cash, 2025 adjusted free cash flow conversion of 43% and ~3x net leverage; management expects positive free cash flow in 2026 but Q1 may use modest cash depending on market recovery.

RXO Price Performance

RXO opened at $16.92 on Friday. The business has a fifty day moving average of $14.42 and a 200 day moving average of $15.19. The stock has a market cap of $2.78 billion, a P/E ratio of -39.35, a PEG ratio of 8.10 and a beta of 1.74. The company has a quick ratio of 1.32, a current ratio of 1.32 and a debt-to-equity ratio of 0.24. RXO has a 52-week low of $10.43 and a 52-week high of $22.17.

Insider Buying and Selling at RXO

In other RXO news, Director Troy A. Cooper bought 8,317 shares of the firm’s stock in a transaction dated Thursday, November 20th. The stock was acquired at an average cost of $10.61 per share, for a total transaction of $88,243.37. Following the completion of the transaction, the director owned 275,416 shares in the company, valued at $2,922,163.76. This trade represents a 3.11% increase in their ownership of the stock. The acquisition was disclosed in a filing with the Securities & Exchange Commission, which is available at the SEC website. Also, CEO Andrew M. Wilkerson purchased 7,775 shares of the business’s stock in a transaction dated Monday, November 10th. The stock was bought at an average price of $12.88 per share, for a total transaction of $100,142.00. Following the completion of the acquisition, the chief executive officer owned 7,775 shares of the company’s stock, valued at approximately $100,142. The trade was a ∞ increase in their position. Additional details regarding this purchase are available in the official SEC disclosure. Over the last quarter, insiders have bought 19,942 shares of company stock valued at $237,665. Corporate insiders own 2.80% of the company’s stock.

Hedge Funds Weigh In On RXO

A number of hedge funds have recently added to or reduced their stakes in RXO. CIBC Bancorp USA Inc. bought a new stake in shares of RXO during the third quarter valued at approximately $267,000. PharVision Advisers LLC purchased a new position in RXO during the 3rd quarter worth $203,000. Voloridge Investment Management LLC bought a new stake in RXO during the 3rd quarter valued at $7,372,000. Quarry LP bought a new stake in RXO during the 3rd quarter valued at $33,000. Finally, Mariner LLC purchased a new stake in shares of RXO in the 3rd quarter worth $494,000. 92.73% of the stock is currently owned by institutional investors.

Key Stories Impacting RXO

Here are the key news stories impacting RXO this week:

• Positive Sentiment: Management highlighted strong commercial momentum — the Brokerage late‑stage new business pipeline grew more than 50% year‑over‑year, which suggests revenue recovery potential as market conditions normalize. RXO Announces Fourth-Quarter Results
• Neutral Sentiment: The full Q4 earnings call transcript and slide deck are available for investors who want granular color on capacity, buy‑rates and client wins — useful for modeling timing of any margin recovery. RXO Q4 2025 Earnings Call Transcript
• Neutral Sentiment: Analyst pieces and metric deep dives are starting to appear; they compare FY metrics vs. Street estimates and peers, which may drive further updates to models and price targets. Here’s What Key Metrics Tell Us About RXO (RXO) Q4 Earnings
• Negative Sentiment: Q4 results missed: EPS of ($0.07) vs. consensus ($0.04) miss and revenue $1.47B vs. $1.50B expected; revenue declined ~12% YoY and net margin was negative — immediate downside to near‑term profitability and analyst estimates. RXO Reports Q4 Loss, Misses Revenue Estimates
• Negative Sentiment: Management said a tightening freight market (reduced truckload capacity) compressed Brokerage buy rates and gross margins — this structural pressure is the main driver of the earnings miss and margin weakness. First look: Tough market for brokers evident in RXO 4Q earnings
• Negative Sentiment: Market reaction: several outlets report shares initially plunged (~double‑digit drop) on the margin and guidance implications, increasing near‑term volatility and potential downward pressure on sentiment/estimates. RXO shares tumble nearly 11% as market squeeze hits brokerage margins

Wall Street Analysts Forecast Growth

Several brokerages have weighed in on RXO. Benchmark reissued a “hold” rating on shares of RXO in a research note on Thursday, January 15th. Weiss Ratings reissued a “sell (d-)” rating on shares of RXO in a research report on Monday, December 22nd. TD Cowen restated a “hold” rating on shares of RXO in a report on Friday, January 9th. Wolfe Research upgraded RXO from an “underperform” rating to a “peer perform” rating in a research report on Friday, November 14th. Finally, UBS Group cut their price objective on shares of RXO from $17.00 to $15.00 and set a “neutral” rating on the stock in a research report on Friday, November 7th. Four analysts have rated the stock with a Buy rating, eleven have issued a Hold rating and four have given a Sell rating to the company. According to MarketBeat.com, RXO presently has an average rating of “Hold” and an average target price of $16.07.

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.