Buy or Sell QXO Stock?

QXO (QXO) stock has fallen 8.3% during the past day, and is currently trading at $19.29. We believe there are only a couple of things to fear in QXO stock given its overall Moderate operating performance and financial condition. This is aligned with the stock’s Moderate valuation because of which we think it is Fairly Priced.

Below is our assessment:

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Let’s get into details of each of the assessed factors but before that, for quick background: With $14 Bil in market cap, QXO provides business application, technology, and consulting services across North America, headquartered in Greenwich, Connecticut.

[1] Valuation Looks Moderate

This table highlights how QXO is valued vs broader market. For more details see: QXO Valuation Ratios

[2] Growth Is Very Strong

• QXO has seen its top line grow at an average rate of 2715.8% over the last 3 years
• Its revenues have grown 8117% from $57 Mil to $4.7 Bil in the last 12 months
• Also, its quarterly revenues grew 20726.7% to $2.7 Bil in the most recent quarter from $13 Mil a year ago.

This table highlights how QXO is growing vs broader market. For more details see: QXO Revenue Comparison

[3] Profitability Appears Very Weak

• QXO last 12 month operating income was $-209 Mil representing operating margin of -4.5%
• With cash flow margin of 2.8%, it generated nearly $129 Mil in operating cash flow over this period
• For the same period, QXO generated nearly $-178 Mil in net income, suggesting net margin of about -3.8%

This table highlights how QXO profitability vs broader market. For more details see: QXO Operating Income Comparison

[4] Financial Stability Looks Strong

• QXO Debt was $4.0 Bil at the end of the most recent quarter, while its current Market Cap is $14 Bil. This implies Debt-to-Equity Ratio of 28.6%
• QXO Cash (including cash equivalents) makes up $2.3 Bil of $17 Bil in total Assets. This yields a Cash-to-Assets Ratio of 13.9%

[5] Downturn Resilience Is Weak

QXO has fared worse than the S&P 500 index during various economic downturns. We assess this based on both (a) how much the stock fell and, (b) how quickly it recovered.

2022 Inflation Shock

• QXO stock fell 83.8% from a high of $112.72 on 6 July 2021 to $18.27 on 11 May 2022 vs. a peak-to-trough decline of 25.4% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 28 December 2023
• Since then, the stock increased to a high of $235.61 on 10 June 2024 , and currently trades at $19.29

 
2020 Covid Pandemic

• QXO stock fell 60.6% from a high of $30.31 on 6 January 2020 to $11.95 on 3 April 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 4 August 2020

 
2008 Global Financial Crisis

• QXO stock fell 97.3% from a high of $0.02 on 23 February 2007 to $0.00 on 13 November 2007 vs. a peak-to-trough decline of 56.8% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 18 July 2011

But the risk is not limited to major market crashes. Stocks fall even when markets are good – think events like earnings, business updates, outlook changes. Read QXO Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.

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