Earnings and buyback: what changed for XPO (XPO)

XPO (XPO) has drawn fresh attention after reporting first quarter 2026 results alongside an update on its ongoing share repurchase program, giving investors new information on both profitability and capital allocation.

For the quarter ended March 31, 2026, XPO reported sales of US$2,096 million compared with US$1,954 million a year earlier. Net income was US$101 million, compared with US$69 million in the prior year period.

Basic earnings per share from continuing operations came in at US$0.87, versus US$0.59 a year ago. Diluted earnings per share from continuing operations were US$0.85, compared with US$0.58 in the same quarter last year.

Alongside earnings, XPO updated investors on its buyback activity. From January 1, 2026 to April 30, 2026, the company repurchased 160,388 shares, representing 0.14% of its shares, for US$30.01 million.

These transactions complete the repurchase of 1,114,779 shares, representing 0.95% of the company, for a total of US$155 million under the buyback first announced on March 27, 2025.

Despite a 2.2% one day share price decline and a 6.0% 7 day share price pullback to US$206.88, XPO still carries a 49.1% year to date share price return and an 84.6% one year total shareholder return. This suggests strong momentum over a multi year horizon.

If XPO's recent move has you thinking about where else capital could work hard in freight and logistics, this is a good moment to scan 36 power grid technology and infrastructure stocks

With earnings, buybacks and a strong recent share price run already on the table, the real question now is whether XPO at about US$206.88 still offers value or if the stock already reflects future growth.

Most Popular Narrative: 5.8% Undervalued

Against XPO's last close at $206.88, the most followed narrative pegs fair value at $219.61, using an 8.29% discount rate to frame the upside.

XPO's ongoing investments in AI-powered optimization and proprietary technology are driving measurable productivity gains, even in a weak freight market, by reducing linehaul miles, improving labor efficiency, and cutting maintenance costs. As industry shipping volumes recover and these technology benefits compound, this should drive sustained margin expansion and higher net income.

Want to see what sits behind that confidence in margins and earnings? The narrative leans heavily on compounding revenue growth, improving profit margins and a higher future earnings multiple.

Result: Fair Value of $219.61 (UNDERVALUED)

However, the narrative can break quickly if US LTL demand weakens for longer than analysts expect, or if rising wages and driver shortages squeeze margins more than modeled.

Another angle on valuation: earnings multiple looks stretched

Analyst narratives point to a fair value of $219.61, but the current P/E of 69.8x tells a different story. It is much higher than both the US Transportation industry at 40.6x and XPO's own fair ratio of 23.9x. This points to meaningful valuation risk if sentiment cools.

For you that gap means even small disappointments in earnings or freight volumes could hit the share price harder than for peers that trade closer to their fair ratio. It is worth asking whether you are comfortable paying such a premium for this growth profile.

Next Steps

With such mixed signals around valuation and future outcomes, it makes sense to review the facts yourself and decide quickly where you stand. To help frame that decision, take a close look at the 1 key reward and 1 important warning sign.

Looking for more investment ideas?

If XPO has sharpened your focus on where capital works hardest, do not stop here, other opportunities could slip past you while you wait.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.