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Xerox Holdings Corporation (XRX) - free report >>
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Xerox Holdings Corporation (XRX) - free report >>
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Xerox (XRX) Hurt by Weak Revenues & Debt-Heavy Balance Sheet
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 , 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.
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