Do XPO’s (XPO) Rising Sales and Declining Profits Reveal a Strategic Trade-Off for Investors?

• XPO, Inc. reported third quarter 2025 results with sales rising to US$2,111 million but net income decreasing to US$82 million compared to the prior year, alongside completing a share buyback program totaling 471,038 shares for US$60 million.
• The combination of higher sales and ongoing capital returns through buybacks highlights both resilient top-line performance and the company’s commitment to shareholder value despite profit headwinds.
• We will explore how sales growth alongside declining earnings shapes the outlook for XPO’s investment narrative going forward.

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XPO Investment Narrative Recap

To be a shareholder in XPO today, you need conviction in the company's ability to drive long-term margin improvement through technology and service investments, despite its heavy reliance on cyclical U.S. freight markets. The latest quarterly results, with higher sales but declining profits, do little to change the main short-term catalyst, margin recovery from operational efficiency, and have no material impact on the most significant risk: vulnerability to a sustained freight downturn.

The recent completion of XPO’s US$60 million share buyback program speaks directly to the company's ongoing capital returns, reinforcing the investment thesis around shareholder value. While this supports confidence in management’s discipline, it remains secondary to trends in core profitability and freight volumes as the key driver for future share price movement.

Yet, investors should be aware that against this backdrop, XPO’s significant exposure to shifts in freight demand creates...

Read the full narrative on XPO (it's free!)

XPO's narrative projects $9.2 billion in revenue and $661.0 million in earnings by 2028. This requires 4.7% yearly revenue growth and a $316.0 million increase in earnings from $345.0 million today.

Uncover how XPO's forecasts yield a $141.52 fair value, a 4% upside to its current price.

Exploring Other Perspectives

Three fair value estimates from the Simply Wall St Community range from US$91.89 to US$141.52, illustrating broad opinion and debate. Technology-driven gains in efficiency remain top of mind, but freight market volatility could quickly reshape expectations for XPO’s performance.

Explore 3 other fair value estimates on XPO - why the stock might be worth 33% less than the current price!

Build Your Own XPO Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your XPO research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.
• Our free XPO research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate XPO's overall financial health at a glance.

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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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