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XPO Logistics (NYSE:XPO) Q3 2020 Earnings Prep

in EARNINGS/INVESTING IDEAS by

XPO Logistics, Inc. (NYSE:XPO) is scheduled to report Q3 earnings results after markets close for trading on November 5, 2020.

The company is expected to report earnings of $0.40/share on revenue of $3.846 billion. The consensus earnings per share (EPS) of $0.40/share is based on a poll of 17 analysts and represents a decline in eps of −66.0% over the same quarter last year, when the company reported earnings of $1.18/share.

The revenue forecast of $3.846 billion based on a poll of 13 analysts implies a year-over-year (YoY) decline in revenue of −7.4%. Last year the company reported $4.154 billion in revenue for the quarter.

Expected to report EPS contraction of −66.0% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $3,845.90 $4,154.00 −7.4%
EPS $0.40 $1.18 −66.0%

Earnings Call Trends

Historically, management has exceeded analyst expectations 6 out of the last 8 tracked quarters, and missed expectations 2 quarters.

What are your expectations from XPO Logistics, Inc. for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 -$0.79 -$0.63 20.6% Beat
Q1, 2020 $0.43 $0.47 9.8% Beat
Q4, 2019 $1.01 $1.12 10.6% Beat
Q3, 2019 $1.02 $1.18 15.3% Beat
Q2, 2019 $1.04 $1.28 22.6% Beat
Q1, 2019 $0.41 $0.51 25.1% Beat
Q4, 2018 $0.82 $0.72 −12.4% Missed
Q3, 2018 $0.99 $0.89 −9.7% Missed

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by falling −10.8%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
July 30, 2020 $84.08 $75.02 −10.8% Decline
May 4, 2020 $64.33 $68.91 7.1% Increase
February 10, 2020 $93.21 $92.28 −1.0% Decline
October 28, 2019 $79.72 $81.37 2.1% Increase

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −3.02, the model suggests that the company is not likely to be an earnings manipulator. A value of −3.02 implies a 0.1% chance of earnings manipulation.

Fundamentals And Technical Analysis

XPO Logistics, Inc. is currently trading at $88.59/share, down −5.7% for the day. The company is trading at approximately 87.6% of its 52-week high of $101.85/share. The company’s stock price is up 18.1% since the last earnings report and down −7.2% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 52.18 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NYSE:XPO Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 78.53 and a forward P/E multiple of 93.97.

XPO Logistics, Inc.’s current share price also implies a price-to-book (P/B) multiple of 3.34. The following table summarizes some other key fundamental ratios:

Data as of October 28, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $88.59
P/E Ratio 78.5x
P/E Ratio (Fwd) 94.0x
PEG Ratio −1.3
Total Debt / Total Capital 51.7%
Levered Free Cash Flow $401 million
EV / EBITDA 12.2x

Finbox

XPO Logistics, Inc. is a mid-cap stock with a market capitalization of $8.583 billion and a total enterprise value of $15.868 billion. The company operates in the Industrials sector and the Air Freight & Logistics industry.

XPO Logistics, Inc. provides supply chain solutions in North America, France, the United Kingdom, Spain, Poland, Romania, Italy, Portugal, Slovakia, and internationally. The company operates in two segments, Transportation and Logistics. The Transportation segment offers freight brokerage services comprising truck brokerage, intermodal, drayage, and expedite services; last mile services, primarily asset-light; density and day-definite regional, inter-regional, and transcontinental less-than-truckload freight services; full truckload services for transactional transportation of packaged goods, high cube products, and bulk goods; logistics services for domestic, cross-border, and international shipments; and managed transportation services. The Logistics segment provides a range of contract logistics services, including value-added warehousing, distribution and inventory management, omnichannel and e-commerce fulfillment, order personalization, cold chain solutions, reverse logistics, packaging and labeling, and factory and aftermarket support. This segment also offers engineered and customized solutions, and supply chain optimization services, including automation and predictive volume flow management solutions. It provides its services to customers in various industries, such as retail, e-commerce, food and beverage, technology, aerospace, wireless, manufacturing and other industrial, chemical, agribusiness, life sciences, healthcare, and consumer packaged goods. XPO Logistics, Inc. was founded in 2000 and is based in Greenwich, Connecticut.

Expertise: financial technology, analyzing market trends. Brian is a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to research stock fundamentals. Brian’s background is in physics & computer science and previously worked as a software engineer at GE Healthcare. He enjoys applying his expertise in technology to help find market trends that impact investors. Brian can be reached at brian@finbox.io or at +1 (516) 778-6257.

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