Latest news with #Qxo
Yahoo
4 days ago
- Business
- Yahoo
Why QXO Stock Is Shooting Higher Today
A Wall Street analyst set a price target for QXO that is more than 150% above the stock's Thursday closing price. QXO has a lot of work to grow into its valuation, but the management team has a strong track record. 10 stocks we like better than Qxo › A Wall Street analyst has high hopes for building products distributor QXO (NYSE: QXO), and investors are taking note. Shares of QXO traded up 12% as of 10:30 a.m. ET after Wolfe Research set a target price for the stock that is more than 150% above where the shares closed Thursday. QXO was formed last year by serial entrepreneur Brad Jacobs with a goal of consolidating the building products distribution business. In April, the company closed an $11 billion acquisition of Beacon Roofing Supply and aims to grow revenue from about $10 billion today to $50 billion in the years to come. Now that the company has an operating business, Wall Street analysts are beginning to chime in. On Friday, Wolfe Research analyst Trevor Allinson initiated coverage on the stock with an "outperform" rating, assigning the stock a $44 price target. For context, QXO shares closed Thursday at $16.75. Allinson said QXO "offers investors a superior (earnings before interest, taxes, depreciation, and amortization) EBITDA growth story, both through organic EBITDA growth via operational improvements and accretive M&A, led a management team that has a proven value-creation track record across multiple industries." The analyst is forecasting QXO to grow EBITDA at a 35% compound annual rate over the next five years, which he notes would be significantly higher than the rest of the industry. To be sure, this note is just one analyst's opinion and is based on anticipation of what is to come and not current business fundamentals. That said, Jacobs' track record gives a lot of credibility to those expectations. The CEO has done more than 500 acquisitions in his career, building two of the top 10 Fortune 500 success stories over the last decade in United Rentals and XPO. Jacobs and his team have a history of using a combination of acquisitions and technology to drive efficiencies, a playbook that Allinson believes can be repeated here to generate both organic and inorganic growth. Last month, QXO completed a secondary offering to replenish its M&A firepower. Investors need to be aware that past performance is not a guarantee of future success, and that a range of factors including economic headwinds or a fickle M&A market could slow momentum from here. But for those looking for a growth stock in the industrials sector, QXO deserves at least a spot on the watch list. Before you buy stock in Qxo, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Qxo wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $674,395!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $858,011!* Now, it's worth noting Stock Advisor's total average return is 997% — a market-crushing outperformance compared to 172% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 2, 2025 Lou Whiteman has positions in QXO and XPO. The Motley Fool recommends XPO. The Motley Fool has a disclosure policy. Why QXO Stock Is Shooting Higher Today was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
21-05-2025
- Business
- Yahoo
Why QXO Stock Is Down Today
QXO announced a secondary offering to replenish its cash reserves. The company has stated its intentions to be a consolidator, and these deals are a way to raise cash to grow the business. 10 stocks we like better than Qxo › QXO (NYSE: QXO) is restocking its war chest, but that comes with a near-term hit to existing holders. Shares of QXO traded down 10% as of 11 a.m. ET after the building products distribution company launched a new stock and convertible offering. QXO is a new company formed by serial entrepreneur Brad Jacobs that aims to consolidate the building products distribution business. The company closed its first deal last month, an $11 billion purchase of Beacon Roofing Supply, and remains on the hunt for further targets. Late Monday, QXO took a step to replenish its cash coffers. The company said it was looking to raise $1 billion via a sale of common shares and a separate issue of convertible stock. QXO said it would use the net proceeds to repay indebtedness under its senior secured term loan facility, "which will strengthen the company's position with respect to future acquisition opportunities." Existing shares tend to come under pressure when a secondary offering is announced because it adds additional supply to the market, which can alter supply and demand dynamics. In QXO's case, the sale comes at a time when the stock was on an upswing, meaning that despite Wednesday's decline, the stock is still up more than 3% since late last week. Investors need to focus on the long-term here. Yes, in the near term, the stock sale will cause dilution. But those buying in should focus on what Jacobs is trying to build and understand that project will require capital. Jacobs is the architect of two of the top-performing Fortune 500 companies of the last decade, United Rentals and XPO. He's following the same playbook here, which involves both using tech to expand margins and grow organically, as well as consolidating fragmented markets. Jacobs has targeted $50 billion in annual sales for QXO in the years to come, compared to about $10 billion right now. As QXO grows, it should be able to use free cash flow to fund its dealmaking activities. But for now, the offerings represent the quickest, most efficient way to build capital. Before you buy stock in Qxo, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Qxo wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $642,582!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $829,879!* Now, it's worth noting Stock Advisor's total average return is 975% — a market-crushing outperformance compared to 172% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 19, 2025 Lou Whiteman has positions in QXO and XPO. The Motley Fool recommends XPO. The Motley Fool has a disclosure policy. Why QXO Stock Is Down Today was originally published by The Motley Fool
