As of May 24, 2025, XPO Logistics Inc's estimated intrinsic value ranges from $61.40 to $186.96 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $186.96 | +59.8% |
| Discounted Cash Flow (5Y) | $154.85 | +32.3% |
| Dividend Discount Model (Multi-Stage) | $98.50 | -15.8% |
| Dividend Discount Model (Stable) | $61.40 | -47.5% |
| Earnings Power Value | $64.42 | -44.9% |
Is XPO Logistics Inc (XPO) undervalued or overvalued?
With the current market price at $117.00, the stock appears to be moderately undervalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate XPO Logistics Inc's intrinsic value, including:
The cost of capital is a critical factor in valuation models, representing the required return for investors.
| WACC Component | Low | High |
|---|---|---|
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.83 | 0.95 |
| Cost of equity | 7.7% | 10.2% |
| Cost of debt | 5.4% | 6.1% |
| Tax rate | 23.0% | 27.2% |
| Debt/Equity ratio | 0.22 | 0.22 |
| After-tax WACC | 7.1% | 9.1% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $155 | $21,421M | 81.5% |
| 10-Year Growth | $187 | $25,204M | 67.2% |
| 5-Year EBITDA | $118 | $17,134M | 76.9% |
| 10-Year EBITDA | $144 | $20,145M | 59.0% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $858M |
| Discount Rate (WACC) | 9.1% - 7.1% |
| Enterprise Value | $9,391M - $12,152M |
| Net Debt | $3,185M |
| Equity Value | $6,206M - $8,967M |
| Outstanding Shares | 118M |
| Fair Value | $53 - $76 |
| Selected Fair Value | $64.42 |
| Metric | Value |
|---|---|
| Market Capitalization | $13779M |
| Enterprise Value | $16964M |
| Trailing P/E | 35.42 |
| Forward P/E | 30.23 |
| Trailing EV/EBITDA | 8.10 |
| Current Dividend Yield | 2.23% |
| Dividend Growth Rate (5Y) | -26.99% |
| Debt-to-Equity Ratio | 0.22 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $56.09 |
| Discounted Cash Flow (5Y) | 25% | $38.71 |
| Dividend Discount Model (Multi-Stage) | 20% | $19.70 |
| Dividend Discount Model (Stable) | 15% | $9.21 |
| Earnings Power Value | 10% | $6.44 |
| Weighted Average | 100% | $130.15 |
Based on our comprehensive valuation analysis, XPO Logistics Inc's weighted average intrinsic value is $130.15, which is approximately 11.2% above the current market price of $117.00.
Key investment considerations:
Given these factors, we believe XPO Logistics Inc is currently moderately undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.