Overall GXO gets a fundamental rating of 4 out of 10. We evaluated GXO against 23 industry peers in the Air Freight & Logistics industry. GXO has an excellent profitability rating, but there are concerns on its financial health. GXO has a decent growth rate and is not valued too expensively.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

In the past year GXO was profitable.
In the past year GXO had a positive cash flow from operations.
Of the past 5 years GXO 4 years were profitable.
In the past 5 years GXO always reported a positive cash flow from operatings.

1.2 Ratios

The Return On Assets of GXO (0.75%) is better than 60.87% of its industry peers.
With a decent Return On Equity value of 3.01%, GXO is doing good in the industry, outperforming 60.87% of the companies in the same industry.
The Return On Invested Capital of GXO (4.69%) is better than 60.87% of its industry peers.
GXO had an Average Return On Invested Capital over the past 3 years of 4.64%. This is significantly below the industry average of 12.29%.
The last Return On Invested Capital (4.69%) for GXO is above the 3 year average (4.64%), which is a sign of increasing profitability.

		Industry Rank	Sector Rank
ROA	0.75%
ROE	3.01%
ROIC	4.69%

ROA(3y)1.91%

ROA(5y)1.47%

ROE(3y)6.59%

ROE(5y)5.04%

ROIC(3y)4.64%

ROIC(5y)4.07%

1.3 Margins

GXO has a better Profit Margin (0.69%) than 60.87% of its industry peers.
In the last couple of years the Profit Margin of GXO has grown nicely.
GXO's Operating Margin of 3.18% is fine compared to the rest of the industry. GXO outperforms 69.57% of its industry peers.
In the last couple of years the Operating Margin of GXO has grown nicely.
Looking at the Gross Margin, with a value of 15.14%, GXO is in line with its industry, outperforming 56.52% of the companies in the same industry.
In the last couple of years the Gross Margin of GXO has remained more or less at the same level.

		Industry Rank	Sector Rank
OM	3.18%
PM (TTM)	0.69%
GM	15.14%

OM growth 3Y0.48%

OM growth 5Y3.56%

PM growth 3Y-15.94%

PM growth 5Y3.05%

GM growth 3Y-1.15%

GM growth 5Y-0.33%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

GXO has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
Compared to 1 year ago, GXO has more shares outstanding
GXO has more shares outstanding than it did 5 years ago.
The debt/assets ratio for GXO is higher compared to a year ago.

2.2 Solvency

GXO has an Altman-Z score of 1.60. This is a bad value and indicates that GXO is not financially healthy and even has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 1.60, GXO is in line with its industry, outperforming 47.83% of the companies in the same industry.
GXO has a debt to FCF ratio of 35.04. This is a negative value and a sign of low solvency as GXO would need 35.04 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 35.04, GXO is in the better half of the industry, outperforming 65.22% of the companies in the same industry.
GXO has a Debt/Equity ratio of 0.74. This is a neutral value indicating GXO is somewhat dependend on debt financing.
GXO's Debt to Equity ratio of 0.74 is on the low side compared to the rest of the industry. GXO is outperformed by 69.57% of its industry peers.

		Industry Rank	Sector Rank
Debt/Equity	0.74
Debt/FCF	35.04
Altman-Z	1.6

ROIC/WACC0.61

WACC7.71%

2.3 Liquidity

A Current Ratio of 0.71 indicates that GXO may have some problems paying its short term obligations.
GXO has a worse Current ratio (0.71) than 86.96% of its industry peers.
A Quick Ratio of 0.71 indicates that GXO may have some problems paying its short term obligations.
With a Quick ratio value of 0.71, GXO is not doing good in the industry: 86.96% of the companies in the same industry are doing better.

		Industry Rank	Sector Rank
Current Ratio	0.71
Quick Ratio	0.71

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

The Earnings Per Share has been growing slightly by 6.43% over the past year.
GXO shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 16.56% yearly.
Looking at the last year, GXO shows a quite strong growth in Revenue. The Revenue has grown by 16.94% in the last year.
Measured over the past years, GXO shows a quite strong growth in Revenue. The Revenue has been growing by 13.95% on average per year.

EPS 1Y (TTM)6.43%

EPS 3Y-5.37%

EPS 5Y16.56%

EPS Q2Q%0%

Revenue 1Y (TTM)16.94%

Revenue growth 3Y13.82%

Revenue growth 5Y13.95%

Sales Q2Q%7.54%

3.2 Future

Based on estimates for the next years, GXO will show a small growth in Earnings Per Share. The EPS will grow by 6.95% on average per year.
GXO is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 7.62% yearly.

EPS Next Y-10.48%

EPS Next 2Y5.03%

EPS Next 3Y6.95%

EPS Next 5YN/A

Revenue Next Year12.47%

Revenue Next 2Y9.24%

Revenue Next 3Y8.03%

Revenue Next 5Y7.62%

3.3 Evolution

The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.

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4. Valuation

4.1 Price/Earnings Ratio

With a Price/Earnings ratio of 21.49, GXO is valued on the expensive side.
Compared to the rest of the industry, the Price/Earnings ratio of GXO indicates a somewhat cheap valuation: GXO is cheaper than 73.91% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 28.32. GXO is valued slightly cheaper when compared to this.
Based on the Price/Forward Earnings ratio of 18.50, the valuation of GXO can be described as rather expensive.
Compared to the rest of the industry, the Price/Forward Earnings ratio of GXO indicates a rather cheap valuation: GXO is cheaper than 82.61% of the companies listed in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 25.57, GXO is valued a bit cheaper.

		Industry Rank	Sector Rank
PE	21.49
Fwd PE	18.5

4.2 Price Multiples

69.57% of the companies in the same industry are more expensive than GXO, based on the Enterprise Value to EBITDA ratio.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of GXO indicates a somewhat cheap valuation: GXO is cheaper than 60.87% of the companies listed in the same industry.