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Here's Why You Should Retain Xerox (XRX) in Your Portfolio
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Xerox Holdings Corporation’s (XRX - Free Report) bottom line is benefiting from "Project Own It", an enterprise-wide transformation initiative aimed at increasing productivity and operational efficiency, reducing costs, as well as realigning the business to changing market conditions.
The company’s shares have gained 16.5% in the past month, outperforming the 12.8% rise in the industry it belongs to.
"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 expects $300 million of gross cost savings in 2022.
Xerox’s ongoing investments in Xerox Business Solutions, indirect market channels and European sales channels are helping it to 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. Around 78% of the company’s total revenues in 2021 were 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 June quarter was pegged at 1.20, lower than the current ratio of 1.21 reported at the end of the March quarter. Decreasing 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 Retain Xerox (XRX) in Your Portfolio
Xerox Holdings Corporation’s (XRX - Free Report) bottom line is benefiting from "Project Own It", an enterprise-wide transformation initiative aimed at increasing productivity and operational efficiency, reducing costs, as well as realigning the business to changing market conditions.
The company’s shares have gained 16.5% in the past month, outperforming the 12.8% rise in the industry it belongs to.
Xerox Holdings Corporation Price
Xerox Holdings Corporation price | Xerox Holdings Corporation Quote
Factors That Augur Well
"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 expects $300 million of gross cost savings in 2022.
Xerox’s ongoing investments in Xerox Business Solutions, indirect market channels and European sales channels are helping it to 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. Around 78% of the company’s total revenues in 2021 were 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 June quarter was pegged at 1.20, lower than the current ratio of 1.21 reported at the end of the March quarter. Decreasing 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).
Investors interestedin the broader Zacks Business Services sector can consider stocks like Avis Budget Group, Inc. (CAR - Free Report) , Genpact Limited (G - Free Report) and CRA International, Inc. (CRAI - Free Report) .
Avis Budget sports a Zacks Rank #1 (Strong Buy), at present. CAR has an earnings growth rate of 108.4% for the year 2022. You can see the complete list of today’s Zacks #1 Rank stocks here.
Avis Budget delivered a trailing four-quarter earnings surprise of 69.5%, on average.
Genpact carries a Zacks Rank of 2 (Buy) at present. G has a long-term earnings growth expectation of 12.1%.
Genpact delivered a trailing four-quarter earnings surprise of 10.1%, on average.
CRA International currently sports a Zacks Rank #1. CRAI has a long-term earnings growth expectation of 14.3%.
CRAI delivered a trailing four-quarter earnings surprise of 26%, on average