A day after plunging 15% due to a weak 2025 outlook, shares of GXO Logistics (GXO 7.57%) are rallying. The stock is up 8% as of 2:30 p.m. ET, and was up as much as 11% earlier in the day, on investor speculation the post-earnings sell-off was overdone.

A stock overreaction?

GXO is a logistics company specializing in managing warehouses, supply chains, and deliveries for large corporate customers. The company topped Wall Street estimates in the fourth quarter but warned that soft demand would eat into 2025 performance.

Specifically, GXO warned that "capacity realignment" at three major customers would cause a shortfall. At the midpoint of guidance, GXO is expecting $850 million in earnings before interest, taxes, depreciation, and amortization (EBITDA) in 2025, compared to a consensus estimate for $900 million.

The stock understandably sold off following the report, but how much of a sell-off was appropriate? At least six investment banks lowered their price target on GXO post-earnings, with the new targets between $44 and $66. On Thursday, GXO stock closed significantly below those levels at $36.85.

Is GXO stock a buy?

GXO can still be a long-term winner. In an omnichannel world, logistics is an increasingly important part of doing business, and a range of retailers and industrial customers will need help getting their supply chains and deliveries right.

GXO said its pipeline of potential business increased by 15% in the quarter, and management mentioned a big, to-be-announced deal that should come online in the quarters to come.

For long-term-focused investors, there is reason for hope. But for now, the headwinds that impacted guidance will remain. GXO is also in the middle of a CEO search, which adds to uncertainty.

This is a good company, but there is little reason for investors to rush in right now. Holders might need to wait until 2026 before seeing any upside.