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Xerox Holdings Corp XRX

Morningstar Rating
$17.88 +0.13 (0.73%)
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Company Report

Xerox Remains a Firm in Perpetual Decline as Printing Revenue Dries Up Amid Digitization

Xerox is the leader in print solutions, but we fear that this industry will remain in secular decline. As a company, Xerox specializes in enterprise print equipment, largely multifunction printers (printers that can print, copy, and scan) ranging from A3 to A4 paper sizes. We think the print industry is in a jam as the workplace becomes increasingly more digital. This trend was exacerbated by the COVID-19 pandemic, forcing many corporations to rethink their office and, by association, print needs. In our view, eroding switching costs for Xerox is reflected in its declining equipment market share as Canon and HP grew share. We think this secular decline as well as its competitive positioning is a key issue for Xerox because nearly all of Xerox’s offerings are dependent on one another. Only about low double digits of print supplies revenue are unbundled from other Xerox contracts, like equipment leases.

Price vs Fair Value

XRX is trading at a 17% premium.
Price
$17.50
Fair Value
$11.00
Uncertainty
High
1-Star Price
$59.91
5-Star Price
$2.00
Economic Moat
Hpv
Capital Allocation
Vsg

Bulls Say, Bears Say

Bulls

Xerox could gain a strong foothold in the digital packaging industry as the need for such solutions may grow sooner than expected.

Bears

Xerox’s bet on digital print packaging may prove futile as costs will be slow to come down, giving packaging plants little reason to offer the service.

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News

Trading Information

Previous Close Price
$17.75
Day Range
$17.7017.96
52-Week Range
$12.0619.48
Bid/Ask
$17.88 / $17.89
Market Cap
$2.22 Bil
Volume/Avg
1.6 Mil / 2.1 Mil

Key Statistics

Price/Earnings (Normalized)
9.76
Price/Sales
0.38
Dividend Yield (Trailing)
5.63%
Dividend Yield (Forward)
5.63%
Total Yield
30.31%

Company Profile

Xerox is an original equipment manufacturing and software company. Xerox operates in one segment--design, development, and sale of printing technology and related solutions--while deriving 60% of its revenue from the U.S. and 40% from international markets. The company is an OEM of multifunction printers, or MFPs (printers that can print, copy, and scan), focusing on large enterprise markets. Apart from equipment, the company provides post-sales services like managed print services--a service that helps to bring smart servicing and efficiencies to how employers use their print/copy equipment. Xerox is attempting to enter new markets like digital print packaging solutions and printed electronics.
Sector
Technology
Industry
Information Technology Services
Stock Style Box
Small Value
Total Number of Employees
20,100

Competitors

Valuation

Metric
XRX
HPQ
KYOCY
Price/Earnings (Normalized)
9.768.9422.10
Price/Book Value
0.860.85
Price/Sales
0.380.571.35
Price/Cash Flow
6.107.2511.63
Price/Earnings
XRX
HPQ
KYOCY

Financial Strength

Metric
XRX
HPQ
KYOCY
Quick Ratio
0.830.351.83
Current Ratio
1.140.713.24
Interest Coverage
0.357.1018.43
Quick Ratio
XRX
HPQ
KYOCY

Profitability

Metric
XRX
HPQ
KYOCY
Return on Assets (Normalized)
2.68%9.25%2.41%
Return on Equity (Normalized)
9.25%3.29%
Return on Invested Capital (Normalized)
4.90%41.54%1.81%
Return on Assets
XRX
HPQ
KYOCY
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