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Should Value Investors Buy Xerox (XRX) Stock?

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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

Xerox (XRX - Free Report) is a stock many investors are watching right now. XRX is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 7.55. This compares to its industry's average Forward P/E of 16.47. XRX's Forward P/E has been as high as 11.93 and as low as 6.69, with a median of 9.01, all within the past year.

Finally, investors will want to recognize that XRX has a P/CF ratio of 8.55. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 19.69. Within the past 12 months, XRX's P/CF has been as high as 9.58 and as low as 4.38, with a median of 5.84.

These are just a handful of the figures considered in Xerox's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that XRX is an impressive value stock right now.


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