Xerox Corporation (XRX)
NASDAQ:XRX
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Xerox
(NASDAQ:XRX)
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Rating:52Neutral
Price Target:
$2.50
▲(44.51% Upside)
Action:Reiterated
Date:05/02/26
The score is held back primarily by weak profitability and a highly leveraged balance sheet despite positive free cash flow. Technicals are supportive but overbought, and valuation is constrained by losses (negative P/E). The latest earnings call adds some upside via reaffirmed guidance, cost-savings targets, and liquidity actions, but organic demand softness and leverage keep risk elevated.
Positive Factors
Recurring post-sales revenue strength
Strong post-sales revenue growth reflects a large installed base and expanding consumables, service and contract revenue. These annuity streams are more predictable than equipment sales, supporting durable cash flow, margin resilience and customer lock-in over multiple years.
Negative Factors
Elevated leverage and thin equity cushion
Very high leverage and compressed equity reduce financial flexibility, raise refinancing and covenant risk, and amplify earnings volatility. Interest costs and limited balance sheet cushion constrain capital allocation, making multi-quarter deleveraging essential to reduce structural risk.
Read all positive and negative factors
Positive Factors
Negative Factors
Recurring post-sales revenue strength
Strong post-sales revenue growth reflects a large installed base and expanding consumables, service and contract revenue. These annuity streams are more predictable than equipment sales, supporting durable cash flow, margin resilience and customer lock-in over multiple years.
Read all positive factors
Xerox Key Performance Indicators (KPIs)
Any
Revenue by Segment
Breaks down revenue across different business segments, providing insight into which areas are leading growth and how diversified the company’s income streams are.
Breaks down revenue across different business segments, providing insight into which areas are leading growth and how diversified the company’s income streams are.
Data provided by:
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The FlyXerox (XRX) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$332.18M
Dividend Yield17.14%
Average Volume (3M)8.11M
Price to Earnings (P/E)―
Beta (1Y)2.38
Revenue Growth20.00%
EPS Growth21.06%
CountryUS
Employees17,600
SectorIndustrials
Sector Strength72
IndustryBusiness Equipment & Supplies
Share Statistics
EPS (TTM)-8.33
Shares Outstanding130,779,620
10 Day Avg. Volume6,607,242
30 Day Avg. Volume8,112,271
Financial Highlights & Ratios
PEG Ratio0.01
Price to Book (P/B)0.46
Price to Sales (P/S)0.04
P/FCF Ratio1.16
Enterprise Value/Market Cap12.52
Enterprise Value/Revenue0.56
Enterprise Value/Gross Profit2.18
Enterprise Value/Ebitda12.60
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)-0.02
Revenue Forecast (FY)$7.58B
Xerox Business Overview & Revenue Model
Company Description
Xerox Holdings Corporation, a workplace technology company, designs, develops, and sells document management systems and solutions in the United States, Europe, Canada, and internationally. It offers workplace solutions, including desktop monochro...
How the Company Makes Money
Xerox makes money primarily by selling printing and imaging equipment and by generating recurring revenue tied to the ongoing use and servicing of that installed base. Key revenue streams include: (1) Equipment sales: revenue from the sale of offi...
Xerox Earnings Call Summary
Earnings Call Date:Apr 30, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Jul 28, 2026
Earnings Call Sentiment Positive
The call contained meaningful positive operational and financial signs: strong reported revenue growth driven by the Lexmark acquisition, meaningful margin expansion (adjusted operating margin +240 bps), improved IT Solutions bookings/billings, stated integration and transformation savings, liquidity actions (IP JV) and reaffirmed 2026 guidance. However, material challenges remain in the underlying organic business (pro forma revenue declined 4%), elevated leverage (~7x pro forma), Q1 negative free cash flow, higher interest expense and component cost pressure (memory and oil). Management presented a credible multi‑quarter plan focused on stabilizing revenue, increasing profitability and reducing leverage and provided clear near‑term initiatives and targets to address the headwinds. Overall, the positives (margin inflection, bookings growth, cost savings plan, liquidity actions and reaffirmed guidance) modestly outweigh the negatives tied to leverage, cash flow and organic demand softness.Positive Updates
Reported Revenue Growth (Q1 2026)
Total revenue of $1.85 billion, up 27% year‑over‑year on a reported basis and up 24% in constant currency, reflecting Lexmark acquisition contribution; management notes Q1 would have exceeded consensus by approximately $80 million after adjusting for a ~1% pull‑forward benefit.
Negative Updates
Organic/Pro Forma Revenue Decline
On a pro forma basis (adjusting for Lexmark), Q1 revenue declined 4% year‑over‑year (though improved from a 9% organic decline in Q4), signaling the core legacy business has not yet returned to growth.
Read all updates
Q1-2026 Updates
Positive
Negative
Reported Revenue Growth (Q1 2026)
Total revenue of $1.85 billion, up 27% year‑over‑year on a reported basis and up 24% in constant currency, reflecting Lexmark acquisition contribution; management notes Q1 would have exceeded consensus by approximately $80 million after adjusting for a ~1% pull‑forward benefit.
Read all positive updates
Company Guidance
Xerox reaffirmed 2026 guidance calling for revenue greater than $7.5 billion and adjusted operating income of $450–$500 million (more than $200 million improvement versus 2025), supported by $250–$300 million of incremental savings in 2026 — including $150–$200 million of Lexmark integration synergies and $100 million of in‑year transformation savings — and free cash flow of approximately $250 million (implying >$400 million of free cash flow for the balance of 2026); management expects gross and net leverage to fall roughly 1.5x by year‑end to about 5.6x and 4.5x TTM EBITDA (pro forma gross leverage was ~7x TTM EBITDA), and noted Q1 results of $1.85 billion revenue, a 3.9% adjusted operating margin, $637 million cash, $4.4 billion total debt (≈$1.4 billion finance‑asset supported; $3.0 billion core), and liquidity raised via a ~$450 million TPG‑Angelo Gordon JV (net >$400 million) alongside opportunistic note repurchases (e.g., $101 million face value of 2028 notes bought for $45 million).Xerox Financial Statement Overview
Summary
Income Statement
24
Negative
Balance Sheet
18
Very Negative
Cash Flow
56
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 7.41B | 7.02B | 6.22B | 6.89B | 7.11B | 7.04B |
| Gross Profit | 1.91B | 1.90B | 1.96B | 2.31B | 2.32B | 2.40B |
| EBITDA | 330.00M | 91.00M | -822.00M | 291.00M | 36.00M | -49.00M |
| Net Income | -1.04B | -1.03B | -1.32B | 1.00M | -322.00M | -455.00M |
Balance Sheet | ||||||
| Total Assets | 9.90B | 9.82B | 8.37B | 10.01B | 11.54B | 13.22B |
| Cash, Cash Equivalents and Short-Term Investments | 615.00M | 512.00M | 576.00M | 519.00M | 1.04B | 1.84B |
| Total Debt | 4.45B | 4.25B | 3.59B | 3.46B | 3.96B | 4.54B |
| Total Liabilities | 9.37B | 9.15B | 7.06B | 7.24B | 7.97B | 8.77B |
| Stockholders Equity | 513.00M | 658.00M | 1.29B | 2.75B | 3.56B | 4.44B |
Cash Flow | ||||||
| Free Cash Flow | 246.00M | 259.00M | 467.00M | 649.00M | 102.00M | 561.00M |
| Operating Cash Flow | 338.00M | 350.00M | 511.00M | 686.00M | 159.00M | 629.00M |
| Investing Cash Flow | -771.00M | -698.00M | -198.00M | -5.00M | -78.00M | -85.00M |
| Financing Cash Flow | 679.00M | 278.00M | -271.00M | -1.20B | -822.00M | -1.31B |
Xerox Technical Analysis
Neutral
1.73
Price Trends
1.81
Positive
1.96
Positive
2.60
Negative
Market Momentum
0.22
Positive
57.78
Neutral
31.94
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For XRX, the sentiment is Neutral. The current price of 1.73 is below the 20-day moving average (MA) of 2.37, below the 50-day MA of 1.81, and below the 200-day MA of 2.60, indicating a neutral trend. The MACD of 0.22 indicates Positive momentum. The RSI at 57.78 is Neutral, neither overbought nor oversold. The STOCH value of 31.94 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for XRX.
Xerox Risk Analysis
Xerox disclosed 31 risk factors in its most recent earnings report. Xerox reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Xerox Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
66 Neutral | $21.47B | 14.82 | 15.03% | 2.78% | -0.55% | -3.97% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
52 Neutral | $332.18M | -0.40 | -135.32% | 17.14% | 20.00% | 21.06% | |
51 Neutral | $2.73B | 43.37 | 21.67% | ― | 0.23% | -20.13% | |
48 Neutral | $1.49B | 122.22 | 0.58% | ― | -1.76% | -96.67% | |
47 Neutral | $216.53M | -1.04 | 125.36% | ― | 0.15% | -359.97% | |
47 Neutral | $235.75M | -1.37 | -19.59% | ― | -5.40% | -172.56% |
* Industrials Sector Average
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.