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Here's Why You Should Hold Xerox (XRX) in Your Portfolio
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Xerox Holdings Corporation (XRX - Free Report) has an impressive Growth Score of A. This style score condenses all the essential metrics from the company’s financial statements to get a true sense of the quality and sustainability of its growth.
The company’s earnings are anticipated to register growth of 8% and 30.2% in 2023 and 2024, respectively.
The company’s shares have gained 10.1% in the past three months, significantly outperforming the 0.4% rise of the industry it belongs to.
The company’s bottom line is benefiting from "Project Own It", an enterprise-wide transformation initiative aimed at increasing productivity and operational efficiency, reducing costs, and realigning the business to changing market conditions. "Project Own It” is contributing significantly toward freeing up capital for investment. Through this initiative, the company exceeded gross savings of $375 million in 2021 and expected $300 million of gross cost savings for 2022.
The company's ongoing investments in Xerox Business Solutions, indirect market channels and European sales channels are helping it expand its small and mid-sized (SMB) market. The company is expanding its offerings through the inclusion of cyber security and robotic process automation solutions and expanding its IT Services business geographically to strengthen its foothold in the SMB market.
Xerox has a post-sale-driven business model that provides significant recurring revenues and cash generation. Nearly 80% of the company’s revenues are associated with contracted services, equipment maintenance services, consumable supplies and financing. This business model supports strong cash flows that help the company to make strategic investments and penetrate markets with high growth potential.
Some Risks
Xerox’s current ratio at the end of the December quarter was pegged at 1.23, lower than the current ratio of 1.66 reported at the end of the prior-year quarter. A decline in the current ratio is not desirable as it indicates that the company may have problems meeting its short-term debt obligations.
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Here's Why You Should Hold Xerox (XRX) in Your Portfolio
Xerox Holdings Corporation (XRX - Free Report) has an impressive Growth Score of A. This style score condenses all the essential metrics from the company’s financial statements to get a true sense of the quality and sustainability of its growth.
The company’s earnings are anticipated to register growth of 8% and 30.2% in 2023 and 2024, respectively.
The company’s shares have gained 10.1% in the past three months, significantly outperforming the 0.4% rise of the industry it belongs to.
Xerox Holdings Corporation Price
Xerox Holdings Corporation price | Xerox Holdings Corporation Quote
Factors That Bode Well
The company’s bottom line is benefiting from "Project Own It", an enterprise-wide transformation initiative aimed at increasing productivity and operational efficiency, reducing costs, and realigning the business to changing market conditions. "Project Own It” is contributing significantly toward freeing up capital for investment. Through this initiative, the company exceeded gross savings of $375 million in 2021 and expected $300 million of gross cost savings for 2022.
The company's ongoing investments in Xerox Business Solutions, indirect market channels and European sales channels are helping it expand its small and mid-sized (SMB) market. The company is expanding its offerings through the inclusion of cyber security and robotic process automation solutions and expanding its IT Services business geographically to strengthen its foothold in the SMB market.
Xerox has a post-sale-driven business model that provides significant recurring revenues and cash generation. Nearly 80% of the company’s revenues are associated with contracted services, equipment maintenance services, consumable supplies and financing. This business model supports strong cash flows that help the company to make strategic investments and penetrate markets with high growth potential.
Some Risks
Xerox’s current ratio at the end of the December quarter was pegged at 1.23, lower than the current ratio of 1.66 reported at the end of the prior-year quarter. A decline in the current ratio is not desirable as it indicates that the company may have problems meeting its short-term debt obligations.
Zacks Rank and Stocks to Consider
Xerox currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader Zacks Business Services sector is Paychex, Inc. (PAYX - Free Report) and The Interpublic Group of Companies, Inc. (IPG - Free Report) .
Paychex carries a Zacks Rank #2 (Buy) at present. PAYX has a long-term earnings growth expectation of 7.5%.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Paychex delivered a trailing four-quarter earnings surprise of 5.9%, on average.
Interpublic currently sports a Zacks Rank #1. IPG has a long-term earnings growth expectation of 4.61%.
IPG delivered a trailing four-quarter earnings surprise of 8.2%, on average.