GXO Logistics, Inc. (GXO): A Bull Case Theory

We came across a bullish thesis on GXO Logistics, Inc. on Make Money, Make Time’s Substack by Oliver | MMMT Wealth. In this article, we will summarize the bulls’ thesis on GXO. GXO Logistics, Inc.'s share was trading at $50.74 as of November 28th. GXO’s trailing and forward P/E were 67.65 and 16.92 respectively according to Yahoo Finance.

GXO is a pure-play contract logistics company that partners with major global enterprises like Amazon, Apple, Nike, Adidas, and H&M to design, operate, and optimize their supply chains and warehouse operations. It provides end-to-end logistics solutions including distribution center design, inventory management, reverse logistics, cold chain handling, and resale operations. Central to GXO’s value proposition is automation, leveraging robotics, autonomous mobile robots, automated storage systems, and AI-driven workforce planning.

This automation drives higher throughput, lower error rates, reduced labor costs, and greater scalability for clients, while enhancing contract stickiness, process standardization, and margin expansion for GXO. Contracts typically span 3-7 years, often extending as clients recognize the value-add, creating high switching costs and long-standing partnerships, with top clients averaging 15 years and annual revenue renewal rates above 95%.

GXO’s revenue reached $12.7B over the last twelve months, growing 16% through a mix of organic growth, acquisitions, and FX impact. Despite thin operating margins of 2–4% due to pass-through costs, the business generates stable, recurring revenue, with profitability poised to improve as automation and standardization scale.

Net debt stands at ~$2.5B, reflecting warehouse funding tied to client contracts rather than leverage overhang. The company operates in a $2.2T global logistics market projected to grow 9% annually, with expansion opportunities in healthcare, aerospace, and reverse logistics. Strategic acquisitions, like the Wincanton deal, further expand scale, automation, and margin potential.

Trading at 0.46x NTM sales with $13.2B projected revenue in FY25, GXO offers attractive exposure to automation and high-value logistics niches at a discount to peers. With potential revenue of $17.9B and $1.61B EBITDA by FY29, a combination of organic growth, margin expansion, and multiple rerating could drive EV gains of 100–130% over four years, making GXO a compelling investment with upside and resilience across economic cycles.

Previously we covered a bullish thesis on GXO Logistics, Inc. (GXO) by Busy Investor Stock Reports, highlighting strong revenue growth, successful acquisitions, expanding customer relationships, and AI-driven efficiency gains. GXO’s stock has appreciated 29.27% as the thesis played out despite brief headwinds. It still stands as GXO deepens its automation and contract strength, with Oliver | MMMT Wealth noting high switching costs and sector expansion opportunities.

GXO Logistics, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 49 hedge fund portfolios held GXO at the end of the second quarter which was 42 in the previous quarter. While we acknowledge the potential of GXO as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.