US98421M1062 - Common Stock

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.

In the past year **XRX** was profitable.

The reported net income has been mixed in the past 5 years: **XRX** reported negative net income in multiple years.

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.

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 Rank | Sector 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%

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 Rank | Sector 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%

The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so **XRX** is destroying value.

The number of shares outstanding for **XRX** has been reduced compared to 5 years ago.

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.

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.

Industry Rank | Sector Rank | ||
---|---|---|---|

Debt/Equity | 0.98 | ||

Debt/FCF | 5.05 | ||

Altman-Z | 1.7 |

ROIC/WACC0.45

WACC8.49%

A Current Ratio of **1.14** indicates that **XRX** should not have too much problems paying its short term obligations.

A Quick Ratio of **0.91** indicates that **XRX** may have some problems paying its short term obligations.

Industry Rank | Sector Rank | ||
---|---|---|---|

Current Ratio | 1.14 | ||

Quick Ratio | 0.91 |

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.

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%

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.

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%

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.

With a **Price/Earnings** ratio of **7.94**, the valuation of **XRX** can be described as very cheap.

Compared to an average S&P500 **Price/Earnings** ratio of **25.20**, **XRX** is valued rather cheaply.

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 Rank | Sector Rank | ||
---|---|---|---|

PE | 7.94 | ||

Fwd PE | 6.76 |

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.

Industry Rank | Sector Rank | ||
---|---|---|---|

P/FCF | 2.76 | ||

EV/EBITDA | 7.69 |

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%

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.

Industry Rank | Sector Rank | ||
---|---|---|---|

Dividend Yield | 6.09% |

The dividend of **XRX** decreases each year by **-9.14%**.

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

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)

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Inst Owners

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Market Cap1.79B

Analysts

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Dividend

Industry Rank | Sector Rank | ||
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Dividend Yield | 6.09% |

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Valuation

Industry Rank | Sector Rank | ||
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PE | 7.94 | ||

Fwd PE | 6.76 | ||

P/S | |||

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PEG (NY)0.46

PEG (5Y)N/A

Profitability

Industry Rank | Sector Rank | ||
---|---|---|---|

ROA | -0.13% | ||

ROE | -0.47% | ||

ROCE | |||

ROIC | |||

ROICexc | |||

ROICexgc | |||

OM | 5.02% | ||

PM (TTM) | N/A | ||

GM | 33.6% | ||

FCFM |

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F-Score

Asset Turnover0.69

Health

Industry Rank | Sector 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

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Cap/Depr(3y)

Cap/Depr(5y)

Cap/Sales(3y)

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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

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