XEROX HOLDINGS CORP (XRX)

US98421M1062 - Common Stock

14.445  -0.31 (-2.13%)

Fundamental Rating

4

We assign a fundamental rating of 4 out of 10 to XRX. XRX was compared to 32 industry peers in the Technology Hardware, Storage & Peripherals industry. While XRX is still in line with the averages on profitability rating, there are concerns on its financial health. XRX has a bad growth rate and is valued cheaply.



4

1. Profitability

1.1 Basic Checks

In the past year XRX was profitable.
XRX had a positive operating cash flow in the past year.
The reported net income has been mixed in the past 5 years: XRX reported negative net income in multiple years.
XRX had a positive operating cash flow in each of the past 5 years.

1.2 Ratios

XRX has a Return On Assets of -0.13%. This is comparable to the rest of the industry: XRX outperforms 53.13% of its industry peers.
Looking at the Return On Equity, with a value of -0.47%, XRX is in the better half of the industry, outperforming 62.50% of the companies in the same industry.
With a decent Return On Invested Capital value of 3.78%, XRX is doing good in the industry, outperforming 62.50% of the companies in the same industry.
XRX had an Average Return On Invested Capital over the past 3 years of 2.84%. This is significantly below the industry average of 14.47%.
The last Return On Invested Capital (3.78%) for XRX is above the 3 year average (2.84%), which is a sign of increasing profitability.
Industry RankSector Rank
ROA -0.13%
ROE -0.47%
ROIC 3.78%
ROA(3y)-2.2%
ROA(5y)0.7%
ROE(3y)-6.67%
ROE(5y)1.23%
ROIC(3y)2.84%
ROIC(5y)3.94%

1.3 Margins

XRX has a Operating Margin of 5.02%. This is in the better half of the industry: XRX outperforms 62.50% of its industry peers.
XRX's Operating Margin has declined in the last couple of years.
Looking at the Gross Margin, with a value of 33.60%, XRX is in line with its industry, outperforming 53.13% of the companies in the same industry.
In the last couple of years the Gross Margin of XRX has declined.
Industry RankSector Rank
OM 5.02%
PM (TTM) N/A
GM 33.6%
OM growth 3Y-12.35%
OM growth 5Y-14.21%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-3.5%
GM growth 5Y-3.45%

3

2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so XRX is destroying value.
XRX has less shares outstanding than it did 1 year ago.
The number of shares outstanding for XRX has been reduced compared to 5 years ago.
XRX has a worse debt/assets ratio than last year.

2.2 Solvency

Based on the Altman-Z score of 1.70, we must say that XRX is in the distress zone and has some risk of bankruptcy.
XRX's Altman-Z score of 1.70 is in line compared to the rest of the industry. XRX outperforms 50.00% of its industry peers.
The Debt to FCF ratio of XRX is 5.05, which is a neutral value as it means it would take XRX, 5.05 years of fcf income to pay off all of its debts.
XRX's Debt to FCF ratio of 5.05 is in line compared to the rest of the industry. XRX outperforms 59.38% of its industry peers.
XRX has a Debt/Equity ratio of 0.98. This is a neutral value indicating XRX is somewhat dependend on debt financing.
XRX's Debt to Equity ratio of 0.98 is on the low side compared to the rest of the industry. XRX is outperformed by 65.63% of its industry peers.
Industry RankSector Rank
Debt/Equity 0.98
Debt/FCF 5.05
Altman-Z 1.7
ROIC/WACC0.45
WACC8.49%

2.3 Liquidity

A Current Ratio of 1.14 indicates that XRX should not have too much problems paying its short term obligations.
XRX's Current ratio of 1.14 is on the low side compared to the rest of the industry. XRX is outperformed by 78.13% of its industry peers.
A Quick Ratio of 0.91 indicates that XRX may have some problems paying its short term obligations.
XRX has a worse Quick ratio (0.91) than 78.13% of its industry peers.
Industry RankSector Rank
Current Ratio 1.14
Quick Ratio 0.91

3

3. Growth

3.1 Past

XRX shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 66.97%, which is quite impressive.
Measured over the past years, XRX shows a very negative growth in Earnings Per Share. The EPS has been decreasing by -12.11% on average per year.
XRX shows a decrease in Revenue. In the last year, the revenue decreased by -3.11%.
Measured over the past years, XRX shows a decrease in Revenue. The Revenue has been decreasing by -6.55% on average per year.
EPS 1Y (TTM)66.97%
EPS 3Y8.62%
EPS 5Y-12.11%
EPS growth Q2Q-51.69%
Revenue 1Y (TTM)-3.11%
Revenue growth 3Y-0.65%
Revenue growth 5Y-6.55%
Revenue growth Q2Q-9.07%

3.2 Future

Based on estimates for the next years, XRX will show a quite strong growth in Earnings Per Share. The EPS will grow by 13.78% on average per year.
XRX is expected to show a decrease in Revenue. In the coming years, the Revenue will decrease by -1.72% yearly.
EPS Next Y17.37%
EPS Next 2Y15.09%
EPS Next 3Y14.29%
EPS Next 5Y13.78%
Revenue Next Year-5.02%
Revenue Next 2Y-3.18%
Revenue Next 3Y-2.81%
Revenue Next 5Y-1.72%

3.3 Evolution

When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.

8

4. Valuation

4.1 Price/Earnings Ratio

With a Price/Earnings ratio of 7.94, the valuation of XRX can be described as very cheap.
XRX's Price/Earnings ratio is rather cheap when compared to the industry. XRX is cheaper than 87.50% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 25.20, XRX is valued rather cheaply.
XRX is valuated cheaply with a Price/Forward Earnings ratio of 6.76.
Compared to the rest of the industry, the Price/Forward Earnings ratio of XRX indicates a rather cheap valuation: XRX is cheaper than 96.88% of the companies listed in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 21.60. XRX is valued rather cheaply when compared to this.
Industry RankSector Rank
PE 7.94
Fwd PE 6.76

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, XRX is valued a bit cheaper than the industry average as 71.88% of the companies are valued more expensively.
XRX's Price/Free Cash Flow ratio is rather cheap when compared to the industry. XRX is cheaper than 96.88% of the companies in the same industry.
Industry RankSector Rank
P/FCF 2.76
EV/EBITDA 7.69

4.3 Compensation for Growth

The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
A more expensive valuation may be justified as XRX's earnings are expected to grow with 14.29% in the coming years.
PEG (NY)0.46
PEG (5Y)N/A
EPS Next 2Y15.09%
EPS Next 3Y14.29%

6

5. Dividend

5.1 Amount

With a Yearly Dividend Yield of 6.09%, XRX is a good candidate for dividend investing.
The stock price of XRX dropped by -22.52% in the last 3 months. With lower prices the dividend yield is higher, but it may be a sign investors do not trust the long term dividend.
XRX's Dividend Yield is rather good when compared to the industry average which is at 2.69. XRX pays more dividend than 100.00% of the companies in the same industry.
XRX's Dividend Yield is rather good when compared to the S&P500 average which is at 2.45.
Industry RankSector Rank
Dividend Yield 6.09%

5.2 History

The dividend of XRX decreases each year by -9.14%.
XRX has been paying a dividend for at least 10 years, so it has a reliable track record.
As XRX did not decrease their dividend in the past 5 years, we can say the dividend looks stable.
Dividend Growth(5Y)-9.14%
Div Incr Years0
Div Non Decr Years6

5.3 Sustainability

XRX has negative earnings and hence a negative payout ratio. The dividend may be in danger.
DP-1269.23%
EPS Next 2Y15.09%
EPS Next 3Y14.29%

XEROX HOLDINGS CORP

NASDAQ:XRX (4/24/2024, 9:03:09 AM)

14.445

-0.31 (-2.13%)

Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryTechnology Hardware, Storage & Peripherals
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap1.79B
Analysts
Price Target
Dividend
Industry RankSector Rank
Dividend Yield 6.09%
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
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EPS beat(4)
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Revenue beat(2)
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PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
Industry RankSector Rank
PE 7.94
Fwd PE 6.76
P/S
P/FCF
P/OCF
P/B
P/tB
EV/EBITDA
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)0.46
PEG (5Y)N/A
Profitability
Industry RankSector Rank
ROA -0.13%
ROE -0.47%
ROCE
ROIC
ROICexc
ROICexgc
OM 5.02%
PM (TTM) N/A
GM 33.6%
FCFM
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.69
Health
Industry RankSector Rank
Debt/Equity 0.98
Debt/FCF
Debt/EBITDA
Cap/Depr
Cap/Sales
Interest Coverage
Cash Conversion
Profit Quality
Current Ratio 1.14
Quick Ratio 0.91
Altman-Z
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)66.97%
EPS 3Y8.62%
EPS 5Y
EPS growth Q2Q
EPS Next Y17.37%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)-3.11%
Revenue growth 3Y-0.65%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y