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Reasons Why Investors Should Retain Xerox Holdings (XRX)
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Xerox Holdings Corporation’s (XRX - Free Report) growth is driven mainly by the company’s post-sale business model and strategic acquisitions. The company’s initiative to increase productivity and operational efficiency alongside cost-control efforts bode well. The compay has a Growth Score of A.
Factors in Favor
Xerox is being favored by the aggressive product development programs in high-growth markets. Recently, the company launched a new and upgraded solution to enhance productivity and security for hybrid workers. It is aimed at growing in small and mid-sized markets with its ongoing investment in Xerox Business Solutions, indirect market channels and European Sales channels. Xerox has been making strategic acquisitions and the recent buyouts of Advanced UK in 2022 and Document Systems in 2021 are indicators of the same.
The company has been rewarding its investors with consistent dividend payments. Xerox recently declared a quarterly dividend of 25 cents, at a constant rate as the previous year. It paid $174 million, $206 million and $230 million as dividends in 2022, 2021 and 2020 respectively.
Xerox has a solid post-sale driven model, which derives around 77% of its total revenues. Post-sales revenue includes equipment maintenance, contracted services, supplies and financing. The revenue stream strengthens the company’s cash flow position and provides stability to its revenues. Some main post-sale services include the installation of printers and multifunction devices and digital services. Acquisitions are playing a vital role in supporting the revenue stream.
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 year-ago quarter. It indicates that the company may have problems meeting its short-term debt obligations.
XRX’s shares have fallen 0.6% compared with the Office Supplies industry’s 2.2% decline.
Xerox operates in a highly-competitive market with well-known companies like Canon, Toshiba, Hewlett-Packard and Lexmark among others. These companies are increasing their services and growing their global presence.
Zacks Rank and Stocks to Consider
XRX currently carries a Zacks Rank #3 (Hold).
Investors interested in the broader Zacks Business Service sector may consider the following stocks:
Avis Budget Group (CAR - Free Report) , sporting a Zacks Rank of 1, delivered an earnings surprise of 52.7% in the last reported quarter. It came up with an average four-quarter earnings surprise of 78%. Revenues are expected to be $2.5 billion for the first quarter of 2023, which indicates a 3% year-over-year increase. The Zacks Consensus Estimate for the company’s earnings is pegged at $3.27 for the first quarter and $28.46 for the full year. You can see the complete list of today’s Zacks #1 Rank stocks here.
ICF International (ICFI - Free Report) , sporting a Zacks Rank of 1, delivered an earnings surprise of 4.7% in the last reported quarter. It came up with an average four-quarter earnings surprise of 9.2%. Revenues are expected to be $478.24 million for the first quarter of 2023 which indicates a 15.7% year-over-year increase. The Zacks Consensus Estimate for ICFI’s earnings is pegged at $1.41 for the first quarter and $6.3 for the full year, indicating growth of 7.6% and 9.2%, respectively.
Gartner, Inc. (IT - Free Report) , holding a Zacks Rank #2 (Buy), delivered an earnings surprise of 44% in the last reported quarter. It came up with an average surprise of 33%. Revenues are expected to be $1.39 billion for the first quarter of 2023, which indicates a 10.2% year-over-year increase. The Zacks Consensus Estimate for IT’s earnings is pegged at $2.04 for the first quarter and $9.49 for the full year.
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Reasons Why Investors Should Retain Xerox Holdings (XRX)
Xerox Holdings Corporation’s (XRX - Free Report) growth is driven mainly by the company’s post-sale business model and strategic acquisitions. The company’s initiative to increase productivity and operational efficiency alongside cost-control efforts bode well. The compay has a Growth Score of A.
Factors in Favor
Xerox is being favored by the aggressive product development programs in high-growth markets. Recently, the company launched a new and upgraded solution to enhance productivity and security for hybrid workers. It is aimed at growing in small and mid-sized markets with its ongoing investment in Xerox Business Solutions, indirect market channels and European Sales channels. Xerox has been making strategic acquisitions and the recent buyouts of Advanced UK in 2022 and Document Systems in 2021 are indicators of the same.
Xerox Holdings Corporation EPS Diluted (Quarterly)
Xerox Holdings Corporation eps-diluted | Xerox Holdings Corporation Quote
The company has been rewarding its investors with consistent dividend payments. Xerox recently declared a quarterly dividend of 25 cents, at a constant rate as the previous year. It paid $174 million, $206 million and $230 million as dividends in 2022, 2021 and 2020 respectively.
Xerox has a solid post-sale driven model, which derives around 77% of its total revenues. Post-sales revenue includes equipment maintenance, contracted services, supplies and financing. The revenue stream strengthens the company’s cash flow position and provides stability to its revenues. Some main post-sale services include the installation of printers and multifunction devices and digital services. Acquisitions are playing a vital role in supporting the revenue stream.
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 year-ago quarter. It indicates that the company may have problems meeting its short-term debt obligations.
XRX’s shares have fallen 0.6% compared with the Office Supplies industry’s 2.2% decline.
Xerox operates in a highly-competitive market with well-known companies like Canon, Toshiba, Hewlett-Packard and Lexmark among others. These companies are increasing their services and growing their global presence.
Zacks Rank and Stocks to Consider
XRX currently carries a Zacks Rank #3 (Hold).
Investors interested in the broader Zacks Business Service sector may consider the following stocks:
Avis Budget Group (CAR - Free Report) , sporting a Zacks Rank of 1, delivered an earnings surprise of 52.7% in the last reported quarter. It came up with an average four-quarter earnings surprise of 78%. Revenues are expected to be $2.5 billion for the first quarter of 2023, which indicates a 3% year-over-year increase. The Zacks Consensus Estimate for the company’s earnings is pegged at $3.27 for the first quarter and $28.46 for the full year. You can see the complete list of today’s Zacks #1 Rank stocks here.
ICF International (ICFI - Free Report) , sporting a Zacks Rank of 1, delivered an earnings surprise of 4.7% in the last reported quarter. It came up with an average four-quarter earnings surprise of 9.2%. Revenues are expected to be $478.24 million for the first quarter of 2023 which indicates a 15.7% year-over-year increase. The Zacks Consensus Estimate for ICFI’s earnings is pegged at $1.41 for the first quarter and $6.3 for the full year, indicating growth of 7.6% and 9.2%, respectively.
Gartner, Inc. (IT - Free Report) , holding a Zacks Rank #2 (Buy), delivered an earnings surprise of 44% in the last reported quarter. It came up with an average surprise of 33%. Revenues are expected to be $1.39 billion for the first quarter of 2023, which indicates a 10.2% year-over-year increase. The Zacks Consensus Estimate for IT’s earnings is pegged at $2.04 for the first quarter and $9.49 for the full year.