Back to top

Image: Bigstock

Xerox (XRX) Hurt by Weak Revenues & Debt-Heavy Balance Sheet

Read MoreHide Full Article

We recently issued an updated report on Xerox Holdings Corporation (XRX - Free Report) .

In the past year, shares of Xerox have lost 35.7% against 2.2% rise of the industry it belongs to.

The company’s revenues continue to face pandemic-led weakness and bear the brunt of lower demand for paper-related systems and products.

Xerox has a debt-laden balance sheet. Its cash and cash equivalent balance of $2.63 billion at the end of the fourth-quarter 2020 was below the long-term debt level of $4.05 billion. This indicates that the company doesn’t have enough cash to meet this debt burden. Nevertheless, the cash level can meet the short-term debt of $394 million.

Another major threat involves the availability of a large number of substitutes because of strong peer presence, although there are lesser chances of new entry. Companies like Canon, Hewlett-Packard, Lexmark and Toshiba are capable of giving tough competition to Xerox.

Meanwhile, Xerox’s businesses are benefiting from "Project Own It," an enterprise-wide transformation initiative aimed at increasing productivity and operational efficiency, reducing costs as well as realigning business to changing market conditions.

Zacks Rank and Stocks to Consider

Xerox currently carries a Zacks Rank #4 (Sell).

Some better-ranked service stocks are SailPoint Technologies (SAIL - Free Report) , NV5 Global (NVEE - Free Report) and TeleTech Holdings (TTEC - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The long-term expected earnings per share (three to five years) growth rate for SailPoint, NV5 Global and TeleTech is pegged at 15%, 18% and 19.4%, respectively.

More Stock News: This Is Bigger than the iPhone!

It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 77 billion devices by 2025, creating a $1.3 trillion market.

Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 4 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2022.

Click here for the 4 trades >>