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Investing.com -- Shares of GXO Logistics (NYSE: GXO) plummeted by 14% following the company's release of disappointing guidance for the upcoming year. Despite reporting a fourth-quarter earnings per share (EPS) of $1.00, which slightly exceeded analyst expectations of $0.97, and generating revenue of $3.25 billion against the predicted $3.23 billion, the logistics giant's stock suffered a significant drop.

The company's forecast for the fiscal year 2025 fell short of consensus estimates, projecting an EPS range of $2.40 to $2.60, notably below the anticipated $3.09. This guidance has raised concerns among investors and analysts, leading to a sharp decline in the stock's value.

GXO Logistics reported substantial year-over-year (YoY) growth for the fourth quarter of 2024, with revenue climbing to $3.3 billion, a 25% increase from the previous year's $2.6 billion. The company also saw organic revenue growth of 4% and an uptick in net income to $100 million, up from $73 million in the fourth quarter of 2023.

Despite these positive results, the company's outlook for 2025 has overshadowed its recent achievements. The guidance reflects expectations for organic revenue growth of 3% to 6% and adjusted EBITDA of $840 million to $860 million, coupled with an adjusted EBITDA to free cash flow conversion of 25% to 35%.

Analysts have weighed in on the company's projections, with a Barclays (LON: BARC ) analyst reducing the price target on GXO Logistics and maintaining an Equalweight rating. The analyst noted customer-related headwinds in the first quarter and a challenging path to meet the 2025 management guidance, which is below prior consensus EBITDA and EPS.

Jefferies analyst Stephanie Moore also commented on the stock's outlook. Moore highlighted that the lower-than-expected organic growth for the fourth quarter and 2025 is due to customer realignment and consolidation as customers rationalize excess capacity. Moore also pointed out that excluding this impact, the results and guidance are largely in-line and do not represent a structural issue, as new business wins are up 10% for the quarter and the pipeline has increased by 15%. Moore would be a buyer of any weakness.

Investors are now grappling with the mixed signals from GXO Logistics, as the company's record revenue and deal wins contrast with the cautious guidance for 2025.

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