10 Best TaaS Stocks to Invest in According to Hedge Funds

5) GXO Logistics, Inc. (NYSE:GXO)

Number of Hedge Fund Holders: 33

GXO Logistics, Inc. (NYSE:GXO) is a global leader in contract logistics, specializing in order processing for online retailers, including inventory picking, packing, and shipping to meet fast delivery demands. By leveraging advanced technology and a vast network of carriers, the company provides logistics solutions without owning the transportation assets themselves. As a result, the clients can access scalable and flexible transportation services tailored to their specific needs, which reduces the need for significant capital investment in transportation infrastructure.

GXO Logistics, Inc. (NYSE:GXO) generates revenue via long-term contracts with its clients. It provides 2 contract types: open-book (cost-plus) and hybrid closed-book, which is a blend of cost-plus and fixed-price elements.

The open-book (cost-plus) is a type of pricing structure that ensures transparency between GXO Logistics, Inc. (NYSE:GXO) and its clients regarding the costs incurred. The hybrid closed-book model combines elements of both closed-book and open-book pricing approaches. This model provides flexibility in pricing while balancing cost transparency and operational efficiency. These pricing structures offer prospects for stable margins and revenue visibility.

Wall Street analysts believe that GXO Logistics, Inc. (NYSE:GXO) is well-placed to achieve growth in 2025 as it will benefit from the megatrends of e-commerce growth and the increasing complexity of supply chains. In Q3 2024, the company secured approximately $226 million in new business, bringing the YTD total to ~$750 million. Notably, over half of these new contracts were in e-fulfillment, underscoring the growing demand for e-commerce logistics solutions.

With healthy international exposure, GXO Logistics, Inc. (NYSE:GXO) is likely to also benefit from outsourcing trends. As outsourcing trends grow across industries, the company’s revenues will be fueled by its focus on automation, sustainability, scalability, and tailored solutions.

Mar Vista Investment Partners, LLC, an investment management company, released its Q3 2024 investor letter. Here is what the fund said:

“Although we believe in GXO Logistics, Inc.’s (NYSE:GXO) long-term growth outlook for logistics and warehouse automation, we decided to sell our investment to make room for investment opportunities with what we believe to be stronger, long-term expected returns.”