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Here's Why Investors Should Bet on Xerox (XRX) Stock Now
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Xerox Holdings Corporation (XRX - Free Report) is currently banking on "Project Own It" and a post-sale-driven business model in its endeavor for a strong top and bottom-line performance.
"Project Own It" is an enterprise-wide transformation initiative aimed at increasing productivity and operational efficiency, reducing costs, as well as realigning the business to changing market conditions. It is contributing significantly toward freeing up capital for investment. Through this initiative, Xerox achieved gross savings of $2.2 billion from 2018 to 2022.
The company’s post-sale-driven business model provides significant recurring revenues and cash generation. Around 77% of the company’s total revenues in 2022 were associated with contracted services, equipment maintenance services, consumable supplies and financing. This business model supports strong cash flows that help it to make strategic investments and penetrate markets with high growth potential.
Why an Attractive Pick Right Now?
Solid Rank & VGM Score: Xerox currently sports a Zacks Rank #1 (Strong Buy) and a VGM Score of A. Our research shows that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 or #2 (Buy), offer the best investment opportunities for investors. Thus, the company appears to be a compelling investment proposition at the moment.
Northward Estimate Revisions: Three estimates for the current year moved north over the past 60 days versus no southward revisions, reflecting analysts’ confidence in the company. Over the same period, the Zacks Consensus Estimate for the current year has increased 30.5%.
Positive Earnings Surprise History: XRX has an impressive earnings surprise history. It outpaced the Zacks Consensus Estimate in three of the trailing four quartersand missed once, delivering an average earnings surprise of 57.7%.
Strong Growth Prospects: The Zacks Consensus Estimate for the company’s 2023 earnings of $1.54 indicates year-over-year growth of 37.5%. Moreover, earnings are expected to register a 14.7% improvement in fiscal 2024.
Other Stocks to Consider
Investors interested in the Zacks Business Services sector can also consider the following top-ranked stocks:
Rollins (ROL - Free Report) : For second-quarter 2023, the Zacks Consensus Estimate for Rollins’ revenues suggests growth of 12.6% year over year to $803.6 million and the same for earnings indicates a 15% increase to 23 cents per share. The company has an impressive earnings surprise history, beating the consensus mark in three of the four trailing quarters and missing once, the average surprise being 5.53%.
Omnicom Group (OMC - Free Report) : For second-quarter 2023, the Zacks Consensus Estimate for Omnicom’s revenues suggests an increase of 1.5% year over year to $3.62 billion and the same for earnings indicates a 7.1% increase to $1.8 per share. The company has an impressive earnings surprise history, beating the consensus mark in all the trailing four quarters, the average surprise being 9.1%.
OMC currently carries a Zacks Rank #2.
Maximus (MMS - Free Report) : For second-quarter 2023, the Zacks Consensus Estimate for Maximus’ revenues suggests an increase of 6.9% year over year to $1.2 billion and the same for earnings indicates a 46.2% rise to $1.14 per share. The company has an impressive earnings surprise history, beating the consensus mark in three instances and missing once, the average surprise being 9.6%.
MMS has a VGM Score of A and carries a Zacks Rank of 2.
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Here's Why Investors Should Bet on Xerox (XRX) Stock Now
Xerox Holdings Corporation (XRX - Free Report) is currently banking on "Project Own It" and a post-sale-driven business model in its endeavor for a strong top and bottom-line performance.
"Project Own It" is an enterprise-wide transformation initiative aimed at increasing productivity and operational efficiency, reducing costs, as well as realigning the business to changing market conditions. It is contributing significantly toward freeing up capital for investment. Through this initiative, Xerox achieved gross savings of $2.2 billion from 2018 to 2022.
Xerox Holdings Corporation Net Income (TTM)
Xerox Holdings Corporation net-income-ttm | Xerox Holdings Corporation Quote
The company’s post-sale-driven business model provides significant recurring revenues and cash generation. Around 77% of the company’s total revenues in 2022 were associated with contracted services, equipment maintenance services, consumable supplies and financing. This business model supports strong cash flows that help it to make strategic investments and penetrate markets with high growth potential.
Why an Attractive Pick Right Now?
Solid Rank & VGM Score: Xerox currently sports a Zacks Rank #1 (Strong Buy) and a VGM Score of A. Our research shows that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 or #2 (Buy), offer the best investment opportunities for investors. Thus, the company appears to be a compelling investment proposition at the moment.
Northward Estimate Revisions: Three estimates for the current year moved north over the past 60 days versus no southward revisions, reflecting analysts’ confidence in the company. Over the same period, the Zacks Consensus Estimate for the current year has increased 30.5%.
Positive Earnings Surprise History: XRX has an impressive earnings surprise history. It outpaced the Zacks Consensus Estimate in three of the trailing four quartersand missed once, delivering an average earnings surprise of 57.7%.
Strong Growth Prospects: The Zacks Consensus Estimate for the company’s 2023 earnings of $1.54 indicates year-over-year growth of 37.5%. Moreover, earnings are expected to register a 14.7% improvement in fiscal 2024.
Other Stocks to Consider
Investors interested in the Zacks Business Services sector can also consider the following top-ranked stocks:
Rollins (ROL - Free Report) : For second-quarter 2023, the Zacks Consensus Estimate for Rollins’ revenues suggests growth of 12.6% year over year to $803.6 million and the same for earnings indicates a 15% increase to 23 cents per share. The company has an impressive earnings surprise history, beating the consensus mark in three of the four trailing quarters and missing once, the average surprise being 5.53%.
ROL currently carries a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Omnicom Group (OMC - Free Report) : For second-quarter 2023, the Zacks Consensus Estimate for Omnicom’s revenues suggests an increase of 1.5% year over year to $3.62 billion and the same for earnings indicates a 7.1% increase to $1.8 per share. The company has an impressive earnings surprise history, beating the consensus mark in all the trailing four quarters, the average surprise being 9.1%.
OMC currently carries a Zacks Rank #2.
Maximus (MMS - Free Report) : For second-quarter 2023, the Zacks Consensus Estimate for Maximus’ revenues suggests an increase of 6.9% year over year to $1.2 billion and the same for earnings indicates a 46.2% rise to $1.14 per share. The company has an impressive earnings surprise history, beating the consensus mark in three instances and missing once, the average surprise being 9.6%.
MMS has a VGM Score of A and carries a Zacks Rank of 2.