XPO Logistics Return On Asset vs. Operating Margin

XPO Stock  USD 132.92  2.33  1.72%   
Based on XPO Logistics' profitability indicators, XPO Logistics is performing exceptionally good at this time. It has a great probability to showcase excellent profitability results in January. Profitability indicators assess XPO Logistics' ability to earn profits and add value for shareholders. At this time, XPO Logistics' Price To Sales Ratio is very stable compared to the past year. As of the 23rd of December 2024, Days Sales Outstanding is likely to grow to 67.20, while Sales General And Administrative To Revenue is likely to drop 0.02. At this time, XPO Logistics' Change To Netincome is very stable compared to the past year. As of the 23rd of December 2024, Net Income Per Share is likely to grow to 1.71, though Accumulated Other Comprehensive Income is likely to grow to (206.2 M).
Current ValueLast YearChange From Last Year 10 Year Trend
Gross Profit Margin0.190.0994
Way Up
Slightly volatile
For XPO Logistics profitability analysis, we use financial ratios and fundamental drivers that measure the ability of XPO Logistics to generate income relative to revenue, assets, operating costs, and current equity. These fundamental indicators attest to how well XPO Logistics utilizes its assets to generate profit and value for its shareholders. The profitability module also shows relationships between XPO Logistics's most relevant fundamental drivers. It provides multiple suggestions of what could affect the performance of XPO Logistics over time as well as its relative position and ranking within its peers.
  
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To learn how to invest in XPO Stock, please use our How to Invest in XPO Logistics guide.
Is Air Freight & Logistics space expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of XPO Logistics. If investors know XPO will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about XPO Logistics listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth
0.123
Earnings Share
3.08
Revenue Per Share
69.741
Quarterly Revenue Growth
0.037
Return On Assets
0.0632
The market value of XPO Logistics is measured differently than its book value, which is the value of XPO that is recorded on the company's balance sheet. Investors also form their own opinion of XPO Logistics' value that differs from its market value or its book value, called intrinsic value, which is XPO Logistics' true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because XPO Logistics' market value can be influenced by many factors that don't directly affect XPO Logistics' underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between XPO Logistics' value and its price as these two are different measures arrived at by different means. Investors typically determine if XPO Logistics is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, XPO Logistics' price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.

XPO Logistics Operating Margin vs. Return On Asset Fundamental Analysis

Comparative valuation techniques use various fundamental indicators to help in determining XPO Logistics's current stock value. Our valuation model uses many indicators to compare XPO Logistics value to that of its competitors to determine the firm's financial worth.
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XPO Logistics is rated fifth in return on asset category among its peers. It is rated fourth in operating margin category among its peers reporting about  1.48  of Operating Margin per Return On Asset. At this time, XPO Logistics' Operating Profit Margin is very stable compared to the past year. The reason why the comparable model can be used in almost all circumstances is due to the vast number of multiples that can be utilized, such as the price-to-earnings (P/E), price-to-book (P/B), price-to-sales (P/S), price-to-cash flow (P/CF), and many others. The P/E ratio is the most commonly used of these ratios because it focuses on the XPO Logistics' earnings, one of the primary drivers of an investment's value.

XPO Logistics' Earnings Breakdown by Geography

XPO Operating Margin vs. Return On Asset

Return on Asset or ROA shows how effective is the management of the company in generating income from utilizing all of the assets at their disposal. It is a useful ratio to evaluate the performance of different departments of a company as well as to understand management performance over time.

XPO Logistics

Return On Asset

 = 

Net Income

Total Assets

 = 
0.0632
Return on Asset measures overall efficiency of a company in generating profits from its total assets. It is expressed as the percentage of profits earned per dollar of Asset. A low ROA typically means that a company is asset-intensive and therefore will needs more money to continue generating revenue in the future.
Operating Margin shows how much operating income a company makes on each dollar of sales. It is one of the profitability indicators which helps analysts to understand whether the firm is successful or not making money from everyday operations.

XPO Logistics

Operating Margin

 = 

Operating Income

Revenue

X

100

 = 
0.09 %
A good Operating Margin is required for a company to be able to pay for its fixed costs or payout its debt, which implies that the higher the margin, the better. This ratio is most effective in evaluating the earning potential of a company over time when comparing it against a firm's competitors.

XPO Operating Margin Comparison

0.09350.27330.14860.1138100%
XPO Logistics is currently under evaluation in operating margin category among its peers.

XPO Logistics Profitability Projections

The most important aspect of a successful company is its ability to generate a profit. For investors in XPO Logistics, profitability is also one of the essential criteria for including it into their portfolios because, without profit, XPO Logistics will eventually generate negative long term returns. The profitability progress is the general direction of XPO Logistics' change in net profit over the period of time. It can combine multiple indicators of XPO Logistics, where stable trends show no significant progress. An accelerating trend is seen as positive, while a decreasing one is unfavorable. A rising trend means that profits are rising, and operational efficiency may be rising as well. A decreasing trend is a sign of poor performance and may indicate upcoming losses.
Last ReportedProjected for Next Year
Accumulated Other Comprehensive Income-217 M-206.2 M
Operating Income438 M459.9 M
Income Before Tax260 M273 M
Total Other Income Expense Net-178 M-169.1 M
Net Income192 M110.5 M
Net Income Applicable To Common Shares765.9 M804.2 M
Income Tax Expense68 M71.4 M
Net Income From Continuing Ops98 M146.2 M
Non Operating Income Net Other18.4 M9.4 M
Interest Income121.5 M210.1 M
Net Interest Income-158 M-165.9 M
Change To Netincome274.9 M288.6 M
Net Income Per Share 1.63  1.71 
Income Quality 3.55  3.73 
Net Income Per E B T 0.73  0.85 

XPO Profitability Driver Comparison

Profitability drivers are factors that can directly affect your investment outlook on XPO Logistics. Investors often realize that things won't turn out the way they predict. There are maybe way too many unforeseen events and contingencies during the holding period of XPO Logistics position where the market behavior may be hard to predict, tax policy changes, gold or oil price hikes, calamities change, and many others. The question is, are you prepared for these unexpected events? Although some of these situations are obviously beyond your control, you can still follow the important profit indicators to know where you should focus on when things like this occur. Below are some of the XPO Logistics' important profitability drivers and their relationship over time.

Use XPO Logistics in pair-trading

One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if XPO Logistics position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in XPO Logistics will appreciate offsetting losses from the drop in the long position's value.

XPO Logistics Pair Trading

XPO Logistics Pair Trading Analysis

The ability to find closely correlated positions to XPO Logistics could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace XPO Logistics when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back XPO Logistics - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling XPO Logistics to buy it.
The correlation of XPO Logistics is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as XPO Logistics moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if XPO Logistics moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for XPO Logistics can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.
Pair CorrelationCorrelation Matching

Use Investing Themes to Complement your XPO Logistics position

In addition to having XPO Logistics in your portfolios, you can quickly add positions using our predefined set of ideas and optimize them against your very unique investing style. A single investing idea is a collection of funds, stocks, ETFs, or cryptocurrencies that are programmatically selected from a pull of investment themes. After you determine your investment opportunity, you can then find an optimal portfolio that will maximize potential returns on the chosen idea or minimize its exposure to market volatility.

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Rubber and Plastic Products
Rubber and Plastic Products Theme
Fama and French investing themes focus on testing asset pricing under different economic assumptions. The Rubber and Plastic Products theme has 27 constituents at this time.
You can either use a buy-and-hold strategy to lock in the entire theme or actively trade it to take advantage of the short-term price volatility of individual constituents. Macroaxis can help you discover thousands of investment opportunities in different asset classes. In addition, you can partner with us for reliable portfolio optimization as you plan to utilize Rubber and Plastic Products Theme or any other thematic opportunities.
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When determining whether XPO Logistics offers a strong return on investment in its stock, a comprehensive analysis is essential. The process typically begins with a thorough review of XPO Logistics' financial statements, including income statements, balance sheets, and cash flow statements, to assess its financial health. Key financial ratios are used to gauge profitability, efficiency, and growth potential of Xpo Logistics Stock. Outlined below are crucial reports that will aid in making a well-informed decision on Xpo Logistics Stock:
Check out Your Current Watchlist.
To learn how to invest in XPO Stock, please use our How to Invest in XPO Logistics guide.
You can also try the Global Correlations module to find global opportunities by holding instruments from different markets.
To fully project XPO Logistics' future profitability, investors should examine all historical financial statements. These statements provide investors with a comprehensive snapshot of the financial position of XPO Logistics at a specified time, usually calculated after every quarter, six months, or one year. Three primary documents fall into the category of financial statements. These documents include XPO Logistics' income statement, its balance sheet, and the statement of cash flows.
Potential XPO Logistics investors and stakeholders can use historical trends found within financial statements to determine how well the company is positioned for the future. Although XPO Logistics investors may work on each financial statement separately, they are all related. The changes in XPO Logistics's assets and liabilities, for example, are also reflected in the revenues and expenses that we see on XPO Logistics's income statement, which results in the company's gains or losses. Cash flows can provide more information regarding cash listed on a balance sheet but not equivalent to net income shown on the income statement. Please read more on our technical analysis and fundamental analysis pages.