RXO Should I Buy
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RXO Inc. is not a strong buy at the moment for a beginner investor with a long-term focus. While there are some positive catalysts like insider buying and efforts to optimize the capital structure, the weak financial performance, mixed analyst ratings, and bearish technical indicators suggest that waiting for a clearer recovery or better entry point is advisable.
The technical indicators show mixed signals. While the moving averages are bullish (SMA_5 > SMA_20 > SMA_200), the MACD histogram is negative and expanding downward, and the RSI is neutral at 22.822. The stock is trading near its support level of 12.421, but the overall trend does not indicate strong upward momentum.
Insider buying has increased significantly by 371.98% over the last month. The company has also taken steps to optimize its capital structure by issuing $400 million in senior notes to repurchase outstanding debt, which could improve financial stability in the long term.
Weak Q4 financial results with an 11.88% YoY revenue decline and negative EPS, despite some improvement in net income. Analysts have mixed views, with some raising price targets but others expressing concerns about weak guidance and elevated leverage. Additionally, the options data shows a bearish sentiment with a high put-call ratio.
In Q4 2025, RXO's revenue dropped by 11.88% YoY to $1.469 billion. Net income improved to -$46 million, up 84% YoY, and EPS increased to -0.27, up 80% YoY. However, gross margin decreased to 13%, down 4.55% YoY, indicating ongoing challenges in profitability.
Analyst ratings are mixed. Truist raised the price target to $20 and maintains a Buy rating, citing strong pipeline visibility and potential earnings recovery. However, JPMorgan lowered the price target to $14 with an Underweight rating, citing weak Q4 results and guidance. Other firms like UBS and BofA raised price targets but remain Neutral, while Stephens and Stifel maintain cautious views due to execution risks and market conditions.
