Last week, the company announced the acquisition of major European logistics provider Norbert Dentressangle for $3.53 billion. This is the company's first venture outside of the U.S.
Jacobs said XPO is a major factor in multiple areas. It ranks third in U.S. intermodal transportation and is a significant player in transporting goods to the U.S. from Mexico under the North American Free Trade Agreement (NAFTA). XPO does not own many of its trucks, but it still is a factor in about one-third of all appliance and furniture deliveries in the nation.
Cramer asked about further acquisitions, and Jacobs noted the transportation industry is quite fragmented at the moment with thousands of companies still on the board. He added, though, that not every acquisition would be large, as some could be small and strategically important.
Separately, TheStreet Ratings team rates XPO LOGISTICS INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate XPO LOGISTICS INC (XPO) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and impressive record of earnings per share growth. However, as a counter to these strengths, we find that the company's profit margins have been poor overall."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- XPO's very impressive revenue growth greatly exceeded the industry average of 0.8%. Since the same quarter one year prior, revenues leaped by 148.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Powered by its strong earnings growth of 71.42% and other important driving factors, this stock has surged by 81.18% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- Despite currently having a low debt-to-equity ratio of 0.58, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 3.86 is very high and demonstrates very strong liquidity.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Air Freight & Logistics industry and the overall market, XPO LOGISTICS INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for XPO LOGISTICS INC is rather low; currently it is at 17.88%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -2.09% trails that of the industry average.
- You can view the full analysis from the report here: XPO Ratings Report