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Xerox (XRX)
NASDAQ:XRX

Xerox (XRX) AI Stock Analysis

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Xerox

(NASDAQ:XRX)

Rating:50Neutral
Price Target:
$6.00
▲(16.28%Upside)
Xerox's overall score reflects significant financial challenges, including declining revenues and high leverage, which are partially offset by short-term bullish technical indicators and strategic progress reported in the earnings call. The high dividend yield adds some investor appeal, but the negative P/E ratio and financial instability weigh heavily on the overall score.
Positive Factors
Acquisition Impact
The acquisition of ITsavvy broadens Xerox’s IT infrastructure capabilities and is expected to improve purchasing power and support margin expansion.
Cost Management
Project Reinvention is a multi-year strategy aimed at streamlining operations and driving long-term growth, with significant cost savings achieved and expected.
Profitability and Leverage
Leverage reduction will be fueled by higher profitability of Lexmark and a better balance sheet.
Negative Factors
Core Print Revenue
There is an expectation of a mid-single digit decline in core Print revenue, driven by secular headwinds such as the disintermediation of physical print by digital alternatives.
Earnings
Recent announcements from Xerox include an underwhelming earnings print and a cut to its dividend.
Strategic Complexity
The acquisition will raise many questions when put in context of the recent challenges and strategic actions taken by Xerox recently, including adding the complexity of a large acquisition to enact a transformation that was largely focused on reduction of complexity and costs.

Xerox (XRX) vs. SPDR S&P 500 ETF (SPY)

Xerox Business Overview & Revenue Model

Company DescriptionXerox Holdings Corporation is a global leader in print and digital document solutions. The company operates primarily in the technology and managed services sectors, focusing on the design, development, and sale of document management systems and services. Xerox offers a wide range of products, including multifunction printers, production printers, and digital printing presses, along with software solutions and managed print services that enhance business productivity and document workflows.
How the Company Makes MoneyXerox generates revenue through several key streams. The primary source of income is the sale of hardware, including printers and copiers, to businesses and consumers worldwide. In addition to hardware sales, Xerox earns significant revenue from its managed print services, which involve managing and optimizing a company's print infrastructure to improve efficiency and reduce costs. The company also provides software solutions that help organizations digitize and automate their document workflows. Furthermore, Xerox benefits from long-term service contracts and post-sale services, such as maintenance, supplies, and equipment leasing. Strategic partnerships and collaborations with technology companies enhance Xerox's offerings, contributing to its overall revenue.

Xerox Earnings Call Summary

Earnings Call Date:May 01, 2025
(Q1-2025)
|
% Change Since: 17.01%|
Next Earnings Date:Jul 29, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted positive developments in equipment installations, ITsavvy integration, and sales productivity. However, these were offset by revenue declines, reduced operating margins, and significant trade uncertainties impacting costs. While there are positive strategic moves such as the Lexmark acquisition, the current financial challenges create a balanced outlook.
Q1-2025 Updates
Positive Updates
Growth in Equipment Installations and A4 Segment
Equipment installation grew 24% for the third consecutive quarter of double-digit growth. Entry installations grew about 33%, reflecting efforts to gain share in the A4 category.
Progress on ITsavvy Integration
The integration of ITsavvy is running ahead of plan. IT Solutions order volumes and cross-sale opportunities between print and IT Solutions businesses are already ahead of plan.
Sales Force Productivity and Operational Simplification
Sales force productivity advanced 13% year-over-year, driven by simplification and optimization initiatives. Operational simplification efforts included an enterprise-wide contract lifecycle management platform.
Lexmark Acquisition Progress
Regulatory approvals for the Lexmark acquisition are progressing, with several key approvals received. The acquisition is expected to be accretive and support revenue and profit growth.
Negative Updates
Revenue Decline
Revenue of around $1.5 billion decreased 3% in actual currency and 1.1% in constant currency. Organic core revenue declined a little more than 2% in constant currency.
Decline in Adjusted Operating Income Margin
Adjusted operating income margin of 1.5% was lower year-over-year by 70 basis points, reflecting higher product costs and macroeconomic disruptions.
Negative Free Cash Flow
Free cash flow was a use of $109 million compared to a use of $89 million in the prior year, reflecting lower adjusted net income and slightly higher capital expenditures.
Impact of Tariffs and Trade Uncertainty
Tariff and trade-related uncertainty impacted product costs. The expected reduction in operating income net of mitigation measures is around $50 million in 2025.
Company Guidance
During the Q1 2025 earnings call, Xerox Holdings Corporation provided several key metrics regarding their financial performance and strategic initiatives. Revenue for the quarter was approximately $1.5 billion, reflecting a 3% decline in actual currency and a 1.1% decline in constant currency, with adjusted operating income margin decreasing by 70 basis points to 1.5%. Free cash flow was a use of $109 million, compared to a use of $89 million in the prior year, and adjusted loss per share was $0.06, $0.12 lower year-over-year. Equipment revenue adjusted for currency backlog fluctuation and reinvention effects declined approximately 1%, marking a 500 basis point improvement from 2024. The company achieved 24% growth in equipment installations, with services renewal rates at a multi-year high. The integration of ITsavvy has progressed ahead of schedule, with order volumes and cross-sale opportunities between print and IT Solutions outperforming expectations. Xerox also reported a 13% year-over-year increase in sales force productivity, contributing to the improved equipment revenue trajectory. Additionally, the company made significant progress on its reinvention initiatives and geographic simplification programs, which are expected to yield more than $100 million in cost savings in 2025.

Xerox Financial Statement Overview

Summary
Xerox is experiencing financial difficulties with declining revenues, negative net income, and high leverage, indicating substantial financial challenges. Positive cash flow is present but declining, reflecting liquidity constraints.
Income Statement
30
Negative
Xerox's income statement shows a concerning trend with declining revenues and negative net income. The TTM (Trailing-Twelve-Months) data indicates a significant negative EBIT and EBITDA margin, highlighting operational challenges. Despite a slight gross profit margin, the overall profitability and revenue growth are negative, reflecting financial stress.
Balance Sheet
40
Negative
The balance sheet reveals a high debt-to-equity ratio, indicating substantial leverage, which poses financial risk. The equity ratio has also diminished over time, signaling reduced financial stability. While the company maintains some assets, the declining stockholders' equity suggests weakened financial health.
Cash Flow
50
Neutral
Xerox's cash flow demonstrates moderate performance with positive free cash flow, albeit with declining growth. The operating cash flow to net income ratio is favorable, indicating effective cash generation relative to profits. However, the overall cash flow trend is declining, reflecting potential liquidity constraints.
Breakdown
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
6.18B6.22B6.89B7.11B7.04B7.02B
Gross Profit
1.94B1.96B2.31B2.32B2.40B2.63B
EBIT
-1.01B159.00M353.00M212.00M320.00M330.00M
EBITDA
-731.00M-822.00M307.00M47.00M695.00M718.00M
Net Income Common Stockholders
-1.30B-1.32B1.00M-322.00M-455.00M192.00M
Balance SheetCash, Cash Equivalents and Short-Term Investments
336.00M576.00M519.00M1.04B1.84B2.63B
Total Assets
8.21B8.37B10.01B11.54B13.22B14.74B
Total Debt
3.30B3.59B3.46B3.96B4.54B4.79B
Net Debt
2.96B3.01B2.94B2.91B2.70B2.16B
Total Liabilities
6.93B7.06B7.24B7.97B8.56B8.93B
Stockholders Equity
1.27B1.29B2.75B3.56B4.65B5.81B
Cash FlowFree Cash Flow
467.00M467.00M649.00M102.00M561.00M474.00M
Operating Cash Flow
501.00M511.00M686.00M159.00M629.00M548.00M
Investing Cash Flow
-175.00M-198.00M-5.00M-78.00M-85.00M-246.00M
Financing Cash Flow
-691.00M-271.00M-1.20B-822.00M-1.31B-416.00M

Xerox Technical Analysis

Technical Analysis Sentiment
Negative
Last Price5.16
Price Trends
50DMA
4.78
Positive
100DMA
5.84
Negative
200DMA
7.41
Negative
Market Momentum
MACD
0.10
Negative
RSI
50.42
Neutral
STOCH
53.11
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For XRX, the sentiment is Negative. The current price of 5.16 is above the 20-day moving average (MA) of 5.13, above the 50-day MA of 4.78, and below the 200-day MA of 7.41, indicating a neutral trend. The MACD of 0.10 indicates Negative momentum. The RSI at 50.42 is Neutral, neither overbought nor oversold. The STOCH value of 53.11 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for XRX.

Xerox Risk Analysis

Xerox disclosed 26 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

Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
80
Outperform
$747.78M19.9113.87%4.29%8.75%5.17%
73
Outperform
$1.03B22.115.32%-2.09%76.96%
62
Neutral
$11.80B10.08-7.46%2.99%7.37%-8.21%
57
Neutral
$432.09M1.9530.92%-14.38%
UIUIS
51
Neutral
$314.83M192.24%-1.72%82.15%
51
Neutral
$644.73M-4.06%
XRXRX
50
Neutral
$671.72M-67.27%9.69%-7.49%-575.59%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
XRX
Xerox
5.16
-7.45
-59.08%
MGIC
Magic
15.23
5.29
53.22%
UIS
Unisys
4.43
0.28
6.75%
VRNT
Verint Systems
17.17
-17.84
-50.96%
CNDT
Conduent
2.67
-0.36
-11.88%
CGNT
Cognyte Software
8.96
0.95
11.86%

Xerox Corporate Events

Executive/Board ChangesShareholder Meetings
Xerox Shareholders Approve Key Proposals at Annual Meeting
Neutral
May 27, 2025

On May 21, 2025, Xerox Holdings Corporation held its annual meeting where shareholders approved several key proposals. These included the election of directors, the ratification of PricewaterhouseCoopers LLP as the independent auditor for 2025, and the advisory approval of the 2024 compensation for named executive officers. Additionally, an amendment to the 2024 Equity and Performance Incentive Plan was approved, indicating continued support for the company’s strategic compensation initiatives.

The most recent analyst rating on (XRX) stock is a Sell with a $11.00 price target. To see the full list of analyst forecasts on Xerox stock, see the XRX Stock Forecast page.

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.