Key Stats for QXO Stock
- Year-to-Date Performance: 25%
- 52-Week Range: $12 to $28
- Valuation Model Target Price: $202
- Implied Upside: 732.8%
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What Happened?
QXO stock is up about 25% year to date, recently trading near $24 per share as investors responded to a transformative acquisition that significantly expands the company’s revenue base. Shares surged as much as 12% in premarket trading this week following the announcement, reflecting strong investor approval of the deal’s earnings impact.
The rally was driven specifically by QXO’s agreement to acquire Kodiak Building Partners for about $2.25 billion in a cash and stock transaction, including $2.0 billion in cash and 13.2 million shares. Kodiak generated roughly $2.4 billion in 2025 revenue, dramatically increasing QXO’s distribution footprint and strengthening its position in building materials.
CEO Brad Jacobs said, “We expect the integration to accelerate margin expansion,” and the company stated the transaction is expected to be highly accretive to earnings in 2026, with closing anticipated early in the second quarter of 2026.
Institutional positioning has also strengthened alongside the advance. Vanguard increased its stake by 17.2% in the third quarter to 55.3 million shares valued at about $1.05 billion.
Envestnet Asset Management boosted its holdings by 41.5% to 582,448 shares worth about $11.1 million, while Advisors Capital Management, Zweig DiMenna Associates, and the New York State Common Retirement Fund also increased exposure. Institutional investors now own approximately 58.68% of the company.
The combination of a $2.25 billion scale expansion, expected 2026 earnings accretion, and rising institutional ownership has fueled momentum in 2026, positioning QXO as an aggressive consolidation story in building products distribution this year.
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Is QXO Undervalued?
Under valuation assumptions, the stock is modeled using:
- Revenue Growth (CAGR): 547.1%
- Operating Margins: 8.2%
- Exit P/E Multiple: 53.7x
Revenue is projected to expand from $57 million in 2024 to about $6.8 billion in 2025, $10.9 billion in 2026, and $15.4 billion in 2027 as acquisitions are consolidated and cross selling opportunities begin to scale across the platform.
The core variable is margin realization rather than revenue alone. An 8.2% operating margin assumes successful integration of Kodiak, procurement efficiencies from increased purchasing power, logistics optimization, and improved inventory management across a much larger distribution network.
Performance over the next 12 months will reflect integration execution, supplier renegotiation leverage, working capital discipline, and the company’s ability to convert rapid revenue expansion into free cash flow.
Distribution density and pricing power in fragmented local markets will directly influence operating leverage.
Based on these inputs, the valuation model implies a target price of $202, representing 732.8% total upside from the current $24 share price over about 1.8 years, indicating shares appear materially undervalued if operational execution aligns with projected scale.
At current levels, QXO appears undervalued, with future performance driven primarily by integration efficiency, purchasing scale advantages, and margin expansion rather than revenue growth alone.
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