A Look at RXO’s Valuation Following Analyst Upgrade and Insider Buying

RXO (RXO) drew fresh investor attention as its stock climbed after Morgan Stanley upgraded its rating and director Thomas A. Szlosek made a substantial insider purchase. These moves piqued interest following a challenging earnings report.

See our latest analysis for RXO.

Despite fresh optimism from insider buying and a major upgrade, RXO's share price did not escape the broader sell-off after earnings. The stock is now down over 55% year-to-date, and its one-year total shareholder return is nearly -61%, reflecting fading momentum in a challenging freight market.

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With the stock now trading at a significant discount compared to analyst price targets and leadership buying more shares, is RXO a bargain waiting for a rebound? Or is the market already factoring in all future prospects?

Most Popular Narrative: 32.5% Undervalued

With a narrative fair value of $15.67, nearly 50% above RXO’s last close at $10.58, bullish and bearish forecasts are fueling debate about whether this trucking broker’s pain has overshot its prospects for recovery.

Completion of Coyote integration and unified tech platform enable RXO to leverage greater network density and procure transportation more efficiently, as seen in 30 to 50 basis point improvements in buy rates and material cost avoidance, directly lifting gross margin and future cash flows.

Read the complete narrative.

Curious how ambitious operational bets and big technology moves factor into RXO’s “undervalued” call? The most popular narrative ties its price disconnect to dramatic margin expansion and a business model transformation, built on surprisingly aggressive financial assumptions. Get the full story and the numbers that could flip this stock’s fortunes.

Result: Fair Value of $15.67 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent softness in the automotive sector and continued freight market weakness could disrupt RXO's path to a sustainable recovery.

Find out about the key risks to this RXO narrative.

Build Your Own RXO Narrative

If you see the story differently or want to test your own research, you can piece together your own outlook in just a few minutes with Do it your way.

A great starting point for your RXO research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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