QXO Stock Risk & Deep Value Analysis
QXO Inc
Industrials • Industrial Distribution
DVR Score
out of 10
What You Need to Know About QXO Stock
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We ran QXO through our deep value framework — analyzing financial health, distress signals, competitive moat, and risk factors. Our risk assessment: Aggressive. Here's what we found.
QXO Risk Analysis & Red Flags
What Could Go Wrong
Failure to integrate TopBuild Corp. and realize the targeted $100-$150 million in annual cost synergies by 2028 could lead to sustained unprofitability and a heavy debt load from the $17.0 billion acquisition, severely impacting shareholder value and future growth prospects. The Q1 2026 net loss of $227.1 million already signals the challenge of turning around profitability in this integration-heavy strategy.
Risk Matrix
Overall
Aggressive
Financial
High
Market
Medium
Competitive
Low
Execution
High
Regulatory
Low
Red Flags
- ⚠
Q1 2026 GAAP net loss of $227.1 million and adjusted EBITDA of only $1.2 million, indicating significant current operational unprofitability.
- ⚠
EPS miss of ($0.03) in Q1 2026 (actual ($0.12) vs. estimate ($0.09)), showing weaker-than-expected financial performance.
- ⚠
Significant shareholder dilution in Q1 2026 from the issuance of 31.6 million common shares for capital raise and 13.2 million shares for the Kodiak acquisition.
- ⚠
Upcoming substantial increase in debt levels to finance the $17.0 billion TopBuild acquisition, significantly raising the company's financial leverage.
Upcoming Risk Events
- 📅
TopBuild Integration Failure (Q4 2026 - FY2027): Inability to realize the targeted $100-$150 million in annual cost synergies from the TopBuild acquisition by 2028, leading to prolonged unprofitability and a lower return on invested capital.
- 📅
Q2 2026 Earnings Miss (estimated August 13, 2026): Reported adjusted EPS below the lowest consensus estimate of ($0.13), indicating ongoing operational challenges and potential for further stock price decline.
When to Reconsider
- 🚪
Exit if quarterly adjusted EBITDA remains negative beyond Q1 2027, indicating persistent operational unprofitability and integration failure.
- 🚪
Sell if the announced combined entity's total debt-to-adjusted EBITDA ratio exceeds 6.0x for two consecutive quarters post-TopBuild integration.
- 🚪
Exit if management announces another significant share offering (e.g., >10% of outstanding shares) for purposes other than highly accretive M&A.
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What Does QXO Inc (QXO) Do?
Market Cap
$12.82B
Sector
Industrials
Industry
Industrial Distribution
Employees
211
QXO, Inc. distributes roofing, waterproofing, and other building products in the United States. It offers asphalt, metal roofing, wood roofing, tile roofing, slate roofing, roofing accessories, and roofing insulation products; vinyl siding, aluminum siding, steel siding, fiber cement siding, wood and composite siding, trim and accessories, and gutters and accessories; built-up roofing, modified roofing, EPDM roofing, PVC roofing, and low-slope metal roofing; as well as air and vapor barriers, fluid-applied products, repair and protection solutions, and membrane waterproofing products. The company also provides building materials and supplies, such as exterior materials, interior materials, and tools and equipment; and roof hatches and other tri-built building products. It serves contractors, distributors, and suppliers to streamline operations. QXO, Inc. was formerly known as SilverSun Technologies, Inc. and changed its name to QXO, Inc. in June 2024. The company is based in Greenwich, Connecticut.
Visit QXO Inc WebsiteInvestment Thesis
If QXO successfully integrates the TopBuild acquisition, achieving its $18 billion revenue target by late 2027 and realizing initial synergy targets of $100-150 million, then the market will re-rate QXO as a dominant, efficient-scale consolidator in a fragmented industry, potentially reaching a 1.5x P/S valuation on the new revenue base. This is bullish because the current market cap ($12.82B) and current price ($17.25) reflect significant integration risk and unprofitability, not the potential for future scale, improved margins, and further accretive M&A driven by Brad Jacobs' proven track record.
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QXO Price Targets & Strategy
12-Month Target
$30.00
Bull Case
$45.00
Bear Case
$12.00
Valuation Basis
1.25x P/S multiple applied to projected FY2027 revenue of $18 billion post-TopBuild integration.
Entry Strategy
Dollar-cost average on dips towards $15.00-$17.00, especially if the TopBuild acquisition progresses smoothly or if Q2 2026 earnings show signs of improved adjusted profitability.
Exit Strategy
Take initial profits at $30.00, reassess at $45.00 for further upside. Implement a stop-loss at $12.00 to manage downside risk if integration falters or profitability deteriorates further.
Portfolio Allocation
7-10% for aggressive risk tolerance due to high growth potential coupled with significant execution and financial risk.
Price Targets & Strategy
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Is QXO Financially Healthy?
Valuation
P/E Ratio
-33.45
Forward P/E
1.00
EV/EBITDA
-1.00
PEG Ratio
3.09
Price/Book
1.00
Price/Sales
7.00
Profitability
Gross Margin
23.09%
Operating Margin
-5.93%
Net Margin
-6.02%
Return on Equity
-5.20%
Revenue Growth
15198.68%
EPS
$-0.73
Balance Sheet
Current Ratio
3.58
Quick Ratio
2.56
Debt/Equity
0.33
Total Debt
$3.06B
Cash Flow
EBITDA
$1.20M
Other
Beta (Volatility)
2.17
Does QXO Have a Competitive Moat?
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🛡️ Narrow
Moat Trend
Expanding
Moat Sources
2 Identified
The moat is expanding and becoming more durable due to QXO's strategy of acquiring market-leading businesses to create an unrivaled scale and distribution network. This creates significant cost advantages through centralized purchasing, optimized logistics, and shared services, making it difficult for smaller competitors to match price or service efficiency.
Moat Erosion Risks
- •Failure to successfully integrate large acquisitions like TopBuild, leading to operational inefficiencies and erosion of cost advantages.
- •Intense regional competition from well-entrenched local distributors who maintain strong customer relationships.
QXO Competitive Moat Analysis
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QXO Market Intelligence
Sentiment & Insider Activity
Social Sentiment
Neutral. Retail sentiment is likely mixed, with strong belief in Brad Jacobs' strategy offset by concerns regarding current unprofitability and integration risks.
Institutional Sentiment
Positive. Analyst consensus is 'Moderate Buy' with 3 'Buy' ratings from QuiverQuant and a broader 'Moderate Buy' from MarketBeat (1 Strong Buy, 15 Buy, 1 Hold, 1 Sell). Institutional ownership activity indicates 340 institutions added shares vs. 206 decreased positions in the most recent quarter.
Insider Activity (Form 4)
No specific Form 4 filings with named insider transactions, titles, share counts, or dollar values were provided in the research for the last 90 days. Institutional activity shows more buying than selling.
Options Flow
Normal options activity; no specific unusual put/call ratio or large block trades were reported in the provided research.
Earnings Intelligence
Next Earnings
Estimated August 13, 2026
Surprise Probability
Medium
Historical Earnings Pattern
Likely volatile due to ongoing strategic transformations; the Q1 2026 earnings miss led to increased scrutiny over immediate profitability despite strong strategic moves.
Key Metrics to Watch
Competitive Position
Top Competitor
BLDR
Market Share Trend
Gaining. QXO is rapidly consolidating a fragmented market through large-scale acquisitions (Kodiak, TopBuild), significantly increasing its national footprint and market share.
Valuation vs Peers
Currently trading at a higher Price/Sales ratio (based on its pre-TopBuild revenue base) compared to more mature building products distributors like Builders FirstSource due to the anticipated growth from M&A; expected to normalize closer to peers (e.g., 0.8-1.2x P/S) post-TopBuild integration as scale and profitability stabilize.
Competitive Advantages
- •Aggressive and proven M&A strategy led by Brad Jacobs, enabling rapid scale expansion.
- •Emerging efficient scale and purchasing power post-TopBuild acquisition in building products distribution.
- •Extensive and expanding distribution network across North America.
Market Intelligence
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What Could Drive QXO Stock Higher?
Near-Term (0-6 months)
- •TopBuild Corp. acquisition closing (estimated Q3 2026): completion of the $17.0 billion deal to create an $18 billion revenue leader, triggering a market re-evaluation of QXO's scale and potential for synergies.
- •Q2 2026 Earnings Report (estimated August 13, 2026): Adjusted EBITDA significantly exceeding the Q1 2026 $1.2 million, signaling improving operational profitability post-Kodiak integration, critical for validating turnaround efforts.
Medium-Term (6-18 months)
- •Initial TopBuild Synergy Realization (Q4 2026 / Q1 2027): Management's announcement of specific, quantified cost savings (e.g., >$50M) or revenue synergies (e.g., cross-selling milestones) from the TopBuild integration, validating the acquisition's financial benefits.
- •Debt Refinancing & Capital Structure Optimization (H1 2027): Successful refinancing of acquisition-related debt at more favorable terms post-TopBuild close, reducing financial risk and improving interest coverage.
Long-Term (18+ months)
- •Further Accretive M&A (2028-2029): Brad Jacobs' proven ability to identify and integrate additional large-scale acquisitions, pushing annual revenue towards $25-$30 billion and solidifying market dominance, leading to a higher valuation multiple.
- •Sustainable Operating Margin Expansion (FY2028+): Achievement of 5%+ adjusted EBITDA margins across the combined entity through operational efficiencies, scale benefits, and disciplined pricing, significantly improving free cash flow and EPS.
Catalysts & Growth Drivers
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What's the Bull Case for QXO?
- ✓
Watch quarterly adjusted EBITDA margin – crossing 3% by Q4 2026 would signal successful integration and improved operational efficiency.
- ✓
Monitor confirmed progress on TopBuild synergy realization – reporting >$50 million in cost savings in Q1 2027 earnings would validate the acquisition thesis.
Bull Case Analysis
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Competing with QXO
See how QXO Inc compares to related companies
| Company | Market Cap | DVR Score | P/E | Revenue | Profit Margin | Rev Growth | |
|---|---|---|---|---|---|---|---|
QXO Inc QXO | $12.8B | 8.1 | -33.5 | $1.7B | -6.0% | 15198.7% | |
Builders FirstSource Inc BLDR | $9.2B | 4.0 | 21.2 | $15.2B | 2.9% | -7.4% | Compare → |
Caterpillar Inc CAT | $400.8B | 0.1 | 42.5 | $70.8B | 13.3% | 11.8% | Compare → |
Honeywell International Inc HON | $139.6B | 1.9 | 30.9 | — | 11.4% | 3.6% | Compare → |
United Parcel Service Inc UPS | $91.9B | 0.1 | 17.5 | $89.5B | 5.9% | -2.9% | Compare → |
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How QXO Inc Makes Money
QXO Inc. operates as a distributor of building products, specializing in roofing, waterproofing, and complementary materials supplied to professional contractors and builders across the U.S. and Canada. The company's core strategy involves aggressively acquiring and integrating smaller, regional distributors to achieve massive scale, significant operational efficiencies, and dominant market share within a highly fragmented industry, ultimately generating revenue through the direct sale of a comprehensive array of building materials and services to its professional customer base.
Read Full Business Model BreakdownFAQ
What is the DVR Score for QXO Inc (QXO)?
As of May 29, 2026, QXO Inc has a DVR Score of 8.1 out of 10, placing it in the "Hidden Gem" category. This score is generated by our AI-powered deep value analysis framework that evaluates growth potential, financial health, competitive moat, and risk factors.
What is the market capitalization of QXO Inc?
QXO Inc's market capitalization is approximately $12.8B. The company operates in the Industrials sector within the Industrial Distribution industry.
What ticker symbol does QXO Inc use?
QXO is the ticker symbol for QXO Inc. The company trades on the NYQ.
What is the risk level for QXO stock?
Our analysis rates QXO Inc's overall risk as Aggressive. This assessment considers execution risk, market risk, financial risk, competitive risk, and regulatory risk. For a full breakdown, see the risk analysis section above.
What is the P/E ratio of QXO?
QXO Inc currently has a price-to-earnings (P/E) ratio of -33.5. This is below the market average, which could indicate the stock is undervalued or facing headwinds.
Is QXO Inc's revenue growing?
QXO Inc has reported revenue growth of 15198.7%. The company is showing strong top-line momentum.
Is QXO stock profitable?
QXO Inc has a profit margin of -6.0%. The company is currently unprofitable.
How often is the QXO DVR analysis updated?
Our AI-powered analysis of QXO Inc is refreshed regularly to incorporate the latest financial data, market conditions, and news. The most recent update was on May 29, 2026.
Important Disclaimer – Not Financial Advice
Deep Value Reports is an independent research platform for educational and informational purposes only. We are not financial advisors, investment advisors, or licensed professionals. The analysis, scores, and information provided on this page for QXO (QXO Inc) should not be construed as personalized investment advice, a recommendation to buy or sell any security, or an offer to provide investment advisory services.
All investments involve risk, including the potential loss of principal. Past performance does not guarantee future results. Always conduct your own research, consider your financial situation, and consult with a qualified financial advisor before making any investment decisions.