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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. "Project Own 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 make strategic investments and penetrate markets with high growth potential.

Why an Attractive Pick Right Now?

Solid Rank & VGM Score: Xerox currently carries a Zacks Rank #2 (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 (Strong Buy) or 2, 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 30 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 10.5%.

Positive Earnings Surprise History: XRX has an impressive earnings surprise history. It outpaced the Zacks Consensus Estimate in all the trailing four quarters, delivering an average earnings surprise of 84.9%.

Strong Growth Prospects: The Zacks Consensus Estimate for the company’s 2023 earnings of $1.9 indicates year-over-year growth of 69.6%.

Other Stocks to Consider

Investors can also consider the following top-ranked stocks:

Rollins (ROL - Free Report) currently carries a Zacks Rank #2. For the fourth quarter of 2023, the Zacks Consensus Estimate for earnings is pegged at 20 cents, indicating year-over-year growth of 17.7%. You can see the complete list of today’s Zacks #1 Rank stocks here.

ROL has an impressive earnings surprise history, beating the consensus mark in three of the four trailing quarters and matching once, the average surprise being 7.2%.

Maximus (MMS - Free Report) has an impressive earnings surprise history, beating the consensus mark in three instances and missing once, the average surprise being 6.8%.

MMS also carries a Zacks Rank of 2.

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