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Bear of the Day: Xerox Holdings Corporation (XRX)

By Zacks Investment ResearchStock MarketsDec 24, 2021 05:00AM ET
www.investing.com/analysis/bear-of-the-day-xerox-holdings-corporation-xrx-200612635
Bear of the Day: Xerox Holdings Corporation (XRX)
By Zacks Investment Research   |  Dec 24, 2021 05:00AM ET
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Xerox (NASDAQ:XRX) Holdings Corporation XRX products have been a core component of countless offices, schools, and beyond for years. But the enterprise printer and copier company has struggled as the world turns more digital.

The Quick Story

Xerox Holdings sells, printers, digital scanners, copiers, and more with a focus on larger enterprise-level offerings. The company sells supplies to go along with its equipment. Xerox is also expanding its services unit amid the changing digital landscape.

Xerox revenue has fallen for the better part of a decade and the remote world has taken a huge toll on its operations. The company’s FY20 revenue fell 23% after it slipped 6% in 2019. In fact, last year marked its seventh straight year of declining YoY sales.

Xerox’s Q3 FY21 revenue dipped just 0.5%. Still, XRX executives lowered its sales guidance amid ongoing challenges that include a deteriorating global supply chain and a much slower-than-projected return to offices.

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Bottom Line

Xerox’s fourth quarter consensus earnings estimate is down 50% since its Q3 report, with its FY21 figure 16% lower, and FY22 down 9%. Zacks estimates do call for XRX to post 1% top-line expansion this year and 2% higher next year. Plus, its adjusted earnings are projected to climb 6.4% and 37%, respectively.

That said, Xerox lands a Zacks Rank #5 (Strong Sell) right now, based on its huge downward earnings revisions. Plus, its Office Supplies space is in the bottom 3% of over 250 Zacks industries.

Xerox’s dividend yield and share price might be attractive to some. But the stock is down 40% in the last five years vs. its industry’s 60% climb. This rough stretch includes a 40% drop in the past two years. Xerox stock has popped recently, yet it appears to be more of a trader’s stock since the digital world was already chipping away at its business long before covid.


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Bear of the Day: Xerox Holdings Corporation (XRX)
 

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Bear of the Day: Xerox Holdings Corporation (XRX)

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