Stifel left its opinion on RXO, Inc. unchanged on Monday, reasserting a Hold rating and maintaining a $15 price target in the wake of the company’s fourth-quarter 2025 financial report. The stock is trading at $16.90 and has gained 33.7% year-to-date despite the recent earnings shortfall.
For the fourth quarter of 2025, RXO recorded an adjusted loss per share of $0.07 and reported adjusted EBITDA of $17 million. Both figures fell short of Stifel’s internal projections of a $0.05 adjusted loss per share and $18.1 million in adjusted EBITDA, and they also missed the consensus expectations on the Street, which had forecast a $0.04 adjusted loss and $18.5 million of adjusted EBITDA.
Over the last twelve months RXO has not been profitable on a diluted EPS basis, with a diluted EPS of -$0.59. Analysts remain broadly cautious but collectively expect the company to reach profitability in FY2026, with a consensus EPS forecast of $0.02 for that year.
Stifel’s review singled out gross margin compression in RXO’s core brokerage operations as a principal driver of the weaker results. The firm noted that this margin pressure appears likely to persist during what it described as the supply-driven recovery phase. In addition, Stifel observed that RXO’s volume and yield trends appear to lag those of the broader market and specific competitors such as C.H. Robinson.
Looking ahead, RXO provided guidance for the first quarter of 2026 that calls for adjusted EBITDA of roughly $8.5 million at the midpoint. That outlook is materially lower than the pre-announcement consensus of $12.5 million and also trails Stifel’s own estimate of $11.2 million, indicating larger near-term headwinds than previously anticipated.
Market data included in the company’s analyst review shows that three analysts have recently lowered their Q1 earnings estimates for RXO. The firm is trading at an elevated EV/EBITDA multiple of 31.44. According to InvestingPro’s Fair Value assessment referenced in the analyst note, RXO appears slightly overvalued at current market levels.
RXO has highlighted potential gains from AI-driven transformation initiatives across its operations, but Stifel characterized that narrative as a "show me" story, indicating that successful execution will be necessary to materially close the valuation gap with peers.
Additional results from the fourth-quarter filing underline a mixed picture. The company posted the adjusted loss per share of $0.07, missing analysts’ forecast of a $0.04 loss, a variance identified as a 75% negative surprise. Offsetting that shortfall, RXO reported revenue of $1.5 billion for the quarter, a modest positive variance of 0.67% relative to expectations.
Separately, Raymond James reiterated a Market Perform rating on RXO, noting that historical advantages in volume and gross margin have deteriorated following RXO’s acquisition of Coyote Logistics in 2024. According to that assessment, those key metrics now lag both peers and the broader market.
The combination of a near-term earnings shortfall, soft guidance for Q1 2026, elevated valuation multiples, and lingering execution questions around margin recovery and volume trends frame the central issues investors and analysts are weighing as the company moves into 2026.
What this means
- Stifel retained a Hold rating with a $15 target after RXO’s Q4 2025 results missed estimates.
- RXO’s adjusted Q4 EPS was -$0.07 and adjusted EBITDA was $17 million, both below Stifel and Street expectations.
- Guidance for Q1 2026 shows adjusted EBITDA of about $8.5 million at the midpoint, below prior consensus and Stifel’s estimate.
Bottom line
The company faces margin and volume headwinds in brokerage operations, and while management points to technology-driven transformation as a path to improvement, analysts have signaled the need for tangible results before adjusting valuations or ratings. RXO’s recent revenue beat provides a modest positive data point, but the broader earnings and guidance shortfalls are central to current market skepticism.