FedEx (FDX) has wrapped up FY 2026 with fourth quarter revenue of US$25.0 billion, basic EPS of US$6.63 and quarterly net income of US$1,598 million, setting the tone for how investors will read the latest numbers against the broader story. Over the last two reported fourth quarters, revenue has gone from US$22.2 billion to US$25.0 billion, while basic EPS has shifted from US$6.92 to US$6.63, giving you a clear view of how the top and bottom lines are tracking into the current year. With one year earnings growth of 8.5% and net margins in the mid single digits, the update keeps the focus on how FedEx converts a large revenue base into steady profitability.

See our full analysis for FedEx.

With the headline figures on the table, the next step is to see how these results line up with the most common narratives around FedEx's growth, profitability and risk profile, and where the latest numbers start to challenge those stories.

FedEx earnings growth shifts gears with 8.5% lift over 12 months

• Over the last 12 months, FedEx earned US$4.4b in net income on US$94.7b of revenue, which works out to 8.5% earnings growth and a 4.7% net margin compared with 4.6% a year earlier.
• Consensus narrative suggests cost programs like DRIVE and Network 2.0 should support better margins, and the current 4.7% net margin ties into that story. However, the modest move from 4.6% highlights that efficiency gains are still incremental rather than transformative so far.
  • Supporters point to trailing twelve month EPS of US$18.55 versus a five year record that averaged a 1.9% earnings decline per year, which lines up with the idea that FedEx is finally converting its scale into more stable profit.
  • At the same time, the improvement in margin is small, so anyone leaning on a strong margin expansion story needs to watch how quickly those cost savings actually show up in future net income.

Slower 1.8% revenue outlook tests the bullish FedEx thesis

• Forecasts point to revenue growth of about 1.8% per year alongside earnings growth of about 9.9% per year, meaning the gap between top line and bottom line expectations is wide and puts a lot of weight on margin improvement.
• Bulls argue that operational projects like DRIVE and Network 2.0, plus higher value verticals such as healthcare logistics, can support those higher earnings growth expectations even on slower revenue, but the current 4.7% margin and US$4.4b of trailing net income show that FedEx is still relatively low margin and needs those projects to keep working hard.
  • The bullish narrative leans on profit margins moving up from about 4.9% today to 6.4% in a few years, while recent data shows only a small step from 4.6% to 4.7%, which is a much gentler slope than the bullish path assumes.
  • With trailing revenue at US$94.7b and earnings at US$4.4b, any push toward the higher earnings levels bulls talk about would require either stronger revenue than the 1.8% forecast or a faster margin lift than FedEx has shown so far.

For a closer look at why some investors think FedEx can still beat these modest revenue forecasts, even with only small margin moves so far, check out the 🐂 FedEx Bull Case.

Valuation gap and 17.1x P/E give fuel to the bears

• FedEx trades at US$316.83 per share, about 24.5% below an indicated DCF fair value of roughly US$419.46, while its 17.1x P/E sits above the Global Logistics industry average of 14.6x and below the peer average of 22.4x.
• Bears focus on the weaker five year earnings record and slower revenue outlook, and point out that an 8.5% one year earnings lift and 4.7% margin might not fully justify paying a P/E that is higher than the broader industry even with a DCF discount on paper.
  • The longer term record shows earnings declining 1.9% per year on average over five years, which sits uneasily next to a P/E premium to the wider Global Logistics group and leaves room for the cautious view that the market is already paying up for the recent 8.5% rebound.
  • With revenue growth expected at about 1.8% per year and net income at US$4.4b on US$94.7b of sales, the combination of a modest margin and an industry premium P/E is exactly the type of setup skeptics point to when they argue that the market may be pricing FedEx ahead of its slower top line story.

If you want to see how those cautious arguments stack up against the current P/E and revenue outlook for FedEx, take a look at the 🐻 FedEx Bear Case.

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for FedEx on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

Seeing both the cautious and optimistic angles on FedEx in these numbers, it makes sense to review the details yourself and move quickly to shape your own view, starting with the 4 key rewards and 1 important warning sign.

See What Else Is Out There Beyond FedEx

FedEx is working with a modest 4.7% net margin, a 17.1x P/E above the wider industry and only incremental improvements in profitability so far.

If you are concerned that paying an industry premium for FedEx with relatively low margins leaves limited room for error, consider using the 44 high quality undervalued stocks to quickly spot companies where current pricing and fundamentals look more aligned.

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.