Investor ConfidencePost-pandemic, it remains difficult for investors to have confidence in Xerox’s combination of continued restructuring and cost cutting while simultaneously refocusing the company on a fragmented, competitive, and OpEx-intensive Services market while concurrently improving margins to double digits.
RestructuringThe company is undergoing major restructuring in the face of flat-to-declining revenues, which is further compounded with the company’s pivot to the specialized Digital/IT services markets which will require significant time/investments and a potential headwind to their operating income improvement goal.
ValuationXerox shares are valued on a 5-6x EV/EBITDA multiple, which is an approx. 15-20% discount to its median peer comp of ~6.5-7x on extensive restructuring in a mature global Imaging Hardware market.