FedEx (FDX, Financial) shares have plunged by 14.87%, experiencing significant market movement due to the company's disappointing quarterly results and a lowered profit outlook for the fiscal year.
In its fiscal 2025 first quarter, which ended Aug. 31, FedEx reported earnings of $3.60 per share on revenue of $21.6 billion. These results fell short of Wall Street's expectations of $4.76 per share on sales of $21.9 billion. The revenue decline year-over-year was primarily attributed to decreased demand for higher-margin priority services.
FedEx (FDX, Financial) also revised its fiscal 2025 earnings per share guidance to a range of $20 to $21, down from the previous $20 to $22 range. The revenue growth outlook was also adjusted to a low-single-digit percentage, a downgrade from the earlier low- to mid-single-digit percentage range.
Despite these headwinds, the company's cost-cutting program aims to improve network efficiency and reduce expenses, although these measures are expected to take time to show full effectiveness.
As of the most recent market data, FedEx (FDX, Financial) is trading at a price of $255.72 per share. The current market capitalization stands at $62.48 billion, with a P/E ratio of 14.84 and a price-to-book ratio of 2.27. The GF Value for FedEx indicates that the stock is currently fairly valued at $247.09.
Despite the recent earnings miss, FedEx's Piotroski F-Score of 7 indicates a very healthy financial situation. Additionally, FedEx's operating margin has been expanding, which is a positive sign. However, there are some cautionary elements, such as the Altman Z-score of 2.67, which places the company in the grey area, implying some level of financial stress.
Other warning signs include a revenue growth slowdown and a dividend yield that is close to a two-year low. FedEx’s insider transactions have also been largely on the selling side, with 8 insider selling transactions reported over the past three months.
Despite these challenges, FedEx (FDX, Financial) remains the world's largest express package provider with a diversified revenue stream, including express, ground, freight, and other services. The company’s global presence and ongoing initiatives to cut costs and improve efficiencies may offer long-term value to investors.
