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Xerox Holdings Corp XRX

Morningstar Rating
$13.86 +0.06 (0.43%)
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Company Report

Xerox Earnings: Sales Decline as Macro Uncertainty Continues to Pressure Spending on Printing

We are maintaining our $15 fair value estimate for no-moat Xerox after the firm kicked off fiscal 2024 with disappointing results on both the sales and profitability fronts. While management maintained its fiscal 2024 targets, implying a better-than-expected performance in the remaining three quarters of the year, we remain pessimistic about Xerox's long-term opportunity as its core business remains in secular decline. We reiterate our thesis that Xerox is an old dog trying to learn new tricks in an increasingly digitized landscape where printing is not as essential as it once was. The firm's shares sold off sharply after the earnings report, and we now view shares as fairly valued.

Price vs Fair Value

XRX is trading at a 343% premium.
Price
$13.86
Fair Value
$35.00
Uncertainty
High
1-Star Price
$65.91
5-Star Price
$8.00
Economic Moat
Bjdj
Capital Allocation
Jdgl

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
$13.80
Day Range
$13.7213.96
52-Week Range
$12.0619.48
Bid/Ask
$13.86 / $13.87
Market Cap
$1.72 Bil
Volume/Avg
911,811 / 2.4 Mil

Key Statistics

Price/Earnings (Normalized)
9.97
Price/Sales
0.29
Dividend Yield (Trailing)
7.25%
Dividend Yield (Forward)
7.25%
Total Yield
38.80%

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
18,700

Competitors

Valuation

Metric
XRX
KYOCY
HPQ
Price/Earnings (Normalized)
9.9719.209.72
Price/Book Value
0.720.78
Price/Sales
0.291.190.62
Price/Cash Flow
5.269.757.89
Price/Earnings
XRX
KYOCY
HPQ

Financial Strength

Metric
XRX
KYOCY
HPQ
Quick Ratio
0.981.830.35
Current Ratio
1.373.240.71
Interest Coverage
−2.4618.437.10
Quick Ratio
XRX
KYOCY
HPQ

Profitability

Metric
XRX
KYOCY
HPQ
Return on Assets (Normalized)
2.08%2.41%9.25%
Return on Equity (Normalized)
7.42%3.29%
Return on Invested Capital (Normalized)
4.10%1.81%41.54%
Return on Assets
XRX
KYOCY
HPQ
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