Xerox logged a -0.7% change during today's afternoon session, and is now trading at a price of $15.1 per share.
Xerox returned losses of -17.2% last year, with its stock price reaching a high of $19.4 and a low of $11.8. Over the same period, the stock underperformed the S&P 500 index by -13.0%. As of April 2023, the company's 50-day average price was $15.26. Xerox Holdings Corporation, a workplace technology company, designs, develops, and sells document management systems and solutions in the Americas, Europe, the Middle East, Africa, India, and internationally. Based in Norwalk, CT, the mid-cap Technology company has 20,500 full time employees. Xerox has offered a 6.6% dividend yield over the last 12 months.
The Company's Revenues Are Declining:
| 2019-12-31 | 2020-12-31 | 2021-12-31 | 2022-12-31 | |
|---|---|---|---|---|
| Revenue (MM) | $9,066 | $7,022 | $7,038 | $7,107 |
| Gross Margins | 40.3% | 37.4% | 34.1% | 32.6% |
| Operating Margins | 12.6% | 5.8% | 4.6% | 3.0% |
| Net Margins | 14.92% | 2.73% | -6.46% | -4.53% |
| Net Income (MM) | $1,353 | $192 | -$455 | -$322 |
| Net Interest Income | -$89,000 | -$80,000 | -$92,000 | -$80,000 |
| Depreciation & Amort. | -$430,000 | -$368,000 | -$327,000 | -$270,000 |
| Earnings Per Share | $5.8 | $0.84 | -$2.56 | -$1.32 |
| EPS Growth | n/a | -85.52% | -404.76% | 48.44% |
| Diluted Shares (MM) | 222 | 209 | 183 | 157 |
| Free Cash Flow (MM) | $1,268 | $474 | $561 | $102 |
| Capital Expenditures (MM) | -$65 | -$74 | -$68 | -$57 |
| Net Current Assets (MM) | -$3,099 | -$3,148 | -$3,855 | -$4,073 |
| Current Ratio | 1.79 | 2.33 | 1.66 | 1.23 |
| Long Term Debt | $3,233,000 | $4,050,000 | $3,596,000 | $2,866,000 |
| Net Debt / EBITDA | 0.75 | 2.58 | -45.4 | 107.24 |
Xerox does not have a meaningful trailing P/E ratio since its earnings per share are currently in the red. Based on its EPS guidance of $1.71, the company has a forward P/E ratio of 8.9. In comparison, the average P/E ratio for the Technology sector is 27.16. On the other hand, the market is undervaluing Xerox in terms of its equity because its P/B ratio is 0.69. In comparison, the sector average is 6.23. In conclusion, Xerox's impressive cash flow trend, decent P/B ratio, and reasonable use of leverage demonstrate that the company may still be fairly valued — despite its elevated earnings multiple.
Analysts Give Xerox an Average Rating of Sell:
The 4 analysts following Xerox have set target prices ranging from $9.0 to $17.0 per share, for an average of $13.5 with a underperform rating. As of April 2023, the company is trading 13.0% away from its average target price, indicating that there is an analyst belief that shares are overpriced.
Xerox has an average amount of shares sold short because 6.8% of the company's shares are sold short. Institutions own 83.4% of the company's shares, and the insider ownership rate stands at 5.7%, suggesting a decent amount of insider shareholders. The largest shareholder is Icahn, Carl, C., whose 19% stake in the company is worth $517,104,254.
