XEROX HOLDINGS CORP (XRX) Stock Fundamental Analysis
NASDAQ:XRX - Nasdaq - US98421M1062 - Common Stock - Currency: USD
We assign a fundamental rating of 3 out of 10 to XRX. XRX was compared to 32 industry peers in the Technology Hardware, Storage & Peripherals industry. Both the profitability and financial health of XRX have multiple concerns. XRX is cheap, but on the other hand it scores bad on growth. Finally XRX also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
In the past year XRX was profitable.
XRX had a positive operating cash flow in the past year.
XRX had negative earnings in 4 of the past 5 years.
XRX had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
With a Return On Assets value of -15.96%, XRX is not doing good in the industry: 67.74% of the companies in the same industry are doing better.
XRX has a worse Return On Equity (-103.49%) than 67.74% of its industry peers.
The Return On Invested Capital of XRX (2.19%) is comparable to the rest of the industry.
XRX had an Average Return On Invested Capital over the past 3 years of 2.67%. This is significantly below the industry average of 18.01%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -15.96% | ||
| ROE | -103.49% | ||
| ROIC | 2.19% |
ROA(3y)-6.33%
ROA(5y)-4.27%
ROE(3y)-37.8%
ROE(5y)-24.09%
ROIC(3y)2.67%
ROIC(5y)2.81%
1.3 Margins
Looking at the Operating Margin, with a value of 2.56%, XRX is in line with its industry, outperforming 48.39% of the companies in the same industry.
In the last couple of years the Operating Margin of XRX has declined.
XRX's Gross Margin of 31.51% is in line compared to the rest of the industry. XRX outperforms 48.39% of its industry peers.
In the last couple of years the Gross Margin of XRX has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 2.56% | ||
| PM (TTM) | N/A | ||
| GM | 31.51% |
OM growth 3Y-20.2%
OM growth 5Y-27.38%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-2.91%
GM growth 5Y-4.79%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so XRX is destroying value.
XRX has more shares outstanding than it did 1 year ago.
The number of shares outstanding for XRX has been reduced compared to 5 years ago.
XRX has a worse debt/assets ratio than last year.
2.2 Solvency
XRX has an Altman-Z score of 1.51. This is a bad value and indicates that XRX is not financially healthy and even has some risk of bankruptcy.
The Altman-Z score of XRX (1.51) is worse than 61.29% of its industry peers.
The Debt to FCF ratio of XRX is 7.28, which is on the high side as it means it would take XRX, 7.28 years of fcf income to pay off all of its debts.
With a decent Debt to FCF ratio value of 7.28, XRX is doing good in the industry, outperforming 67.74% of the companies in the same industry.
A Debt/Equity ratio of 2.18 is on the high side and indicates that XRX has dependencies on debt financing.
The Debt to Equity ratio of XRX (2.18) is worse than 77.42% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.18 | ||
| Debt/FCF | 7.28 | ||
| Altman-Z | 1.51 |
ROIC/WACC0.45
WACC4.91%
2.3 Liquidity
XRX has a Current Ratio of 1.11. This is a normal value and indicates that XRX is financially healthy and should not expect problems in meeting its short term obligations.
XRX's Current ratio of 1.11 is on the low side compared to the rest of the industry. XRX is outperformed by 74.19% of its industry peers.
A Quick Ratio of 0.84 indicates that XRX may have some problems paying its short term obligations.
The Quick ratio of XRX (0.84) is worse than 64.52% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.11 | ||
| Quick Ratio | 0.84 |
3. Growth
3.1 Past
The earnings per share for XRX have decreased strongly by -47.25% in the last year.
Measured over the past years, XRX shows a very negative growth in Earnings Per Share. The EPS has been decreasing by -25.94% on average per year.
Looking at the last year, XRX shows a decrease in Revenue. The Revenue has decreased by -9.66% in the last year.
The Revenue has been decreasing by -7.26% on average over the past years.
EPS 1Y (TTM)-47.25%
EPS 3Y-14.01%
EPS 5Y-25.94%
EPS Q2Q%-16.28%
Revenue 1Y (TTM)-9.66%
Revenue growth 3Y-4.03%
Revenue growth 5Y-7.26%
Sales Q2Q%-8.61%
3.2 Future
XRX is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 9.85% yearly.
The Revenue is expected to decrease by -0.46% on average over the next years.
EPS Next Y13.1%
EPS Next 2Y31.09%
EPS Next 3Y9.85%
EPS Next 5YN/A
Revenue Next Year2.35%
Revenue Next 2Y7.74%
Revenue Next 3Y-1.2%
Revenue Next 5Y-0.46%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 6.67 indicates a rather cheap valuation of XRX.
96.77% of the companies in the same industry are more expensive than XRX, based on the Price/Earnings ratio.
XRX is valuated cheaply when we compare the Price/Earnings ratio to 29.75, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 5.89, the valuation of XRX can be described as very cheap.
Based on the Price/Forward Earnings ratio, XRX is valued cheaply inside the industry as 93.55% of the companies are valued more expensively.
XRX is valuated cheaply when we compare the Price/Forward Earnings ratio to 22.44, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 6.67 | ||
| Fwd PE | 5.89 |
4.2 Price Multiples
80.65% of the companies in the same industry are more expensive than XRX, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, XRX is valued cheaper than 100.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 1.71 | ||
| EV/EBITDA | 8.43 |
4.3 Compensation for Growth
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
PEG (NY)0.51
PEG (5Y)N/A
EPS Next 2Y31.09%
EPS Next 3Y9.85%
5. Dividend
5.1 Amount
XRX has a Yearly Dividend Yield of 7.22%, which is a nice return.
The stock price of XRX dropped by -25.58% in the last 3 months. With lower prices the dividend yield is higher, but it may be a sign investors do not trust the long term dividend.
Compared to an average industry Dividend Yield of 2.88, XRX pays a better dividend. On top of this XRX pays more dividend than 100.00% of the companies listed in the same industry.
XRX's Dividend Yield is rather good when compared to the S&P500 average which is at 2.30.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 7.22% |
5.2 History
The dividend of XRX has a limited annual growth rate of 0.72%.
XRX has paid a dividend for at least 10 years, which is a reliable track record.
As XRX did not decrease their dividend in the past 5 years, we can say the dividend looks stable.
Dividend Growth(5Y)0.72%
Div Incr Years0
Div Non Decr Years6
5.3 Sustainability
The earnings of XRX are negative and hence is the payout ratio. XRX will probably not be able to sustain this dividend level.
The dividend of XRX is growing, but earnings are growing more, so the dividend growth is sustainable.
DP-10.56%
EPS Next 2Y31.09%
EPS Next 3Y9.85%
6.4
-0.23 (-3.47%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryTechnology Hardware, Storage & Peripherals
Earnings (Last)
Earnings (Next)
Inst Owners100.72%
Inst Owner Change9.23%
Ins Owners7.52%
Ins Owner Change-0.59%
Market Cap796.42M
Analysts50
Price Target10.51 (64.22%)
Short Float %16.64%
Short Ratio7.38
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 7.22% |
Yearly Dividend1.14
Dividend Growth(5Y)0.72%
DP-10.56%
Div Incr Years0
Div Non Decr Years6
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-41.8%
Min EPS beat(2)-51.27%
Max EPS beat(2)-32.32%
EPS beat(4)0
Avg EPS beat(4)-49.98%
Min EPS beat(4)-83.19%
Max EPS beat(4)-32.32%
EPS beat(8)3
Avg EPS beat(8)4.57%
EPS beat(12)5
Avg EPS beat(12)-6.14%
EPS beat(16)8
Avg EPS beat(16)-2.86%
Revenue beat(2)1
Avg Revenue beat(2)-2.68%
Min Revenue beat(2)-7%
Max Revenue beat(2)1.64%
Revenue beat(4)1
Avg Revenue beat(4)-2.69%
Min Revenue beat(4)-7%
Max Revenue beat(4)1.64%
Revenue beat(8)1
Avg Revenue beat(8)-2.5%
Revenue beat(12)3
Avg Revenue beat(12)-1.75%
Revenue beat(16)5
Avg Revenue beat(16)-1.31%
PT rev (1m)0%
PT rev (3m)32.95%
EPS NQ rev (1m)-83.33%
EPS NQ rev (3m)-87.01%
EPS NY rev (1m)-15.35%
EPS NY rev (3m)-11.74%
Revenue NQ rev (1m)-3.21%
Revenue NQ rev (3m)-3.33%
Revenue NY rev (1m)-0.16%
Revenue NY rev (3m)-0.45%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 6.67 | ||
| Fwd PE | 5.89 | ||
| P/S | 0.13 | ||
| P/FCF | 1.71 | ||
| P/OCF | 1.56 | ||
| P/B | 0.62 | ||
| P/tB | N/A | ||
| EV/EBITDA | 8.43 |
EPS(TTM)0.96
EY15%
EPS(NY)1.09
Fwd EY16.96%
FCF(TTM)3.75
FCFY58.64%
OCF(TTM)4.11
OCFY64.16%
SpS49.99
BVpS10.37
TBVpS-7.2
PEG (NY)0.51
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -15.96% | ||
| ROE | -103.49% | ||
| ROCE | 2.77% | ||
| ROIC | 2.19% | ||
| ROICexc | 2.43% | ||
| ROICexgc | 4.21% | ||
| OM | 2.56% | ||
| PM (TTM) | N/A | ||
| GM | 31.51% | ||
| FCFM | 7.51% |
ROA(3y)-6.33%
ROA(5y)-4.27%
ROE(3y)-37.8%
ROE(5y)-24.09%
ROIC(3y)2.67%
ROIC(5y)2.81%
ROICexc(3y)2.95%
ROICexc(5y)3.28%
ROICexgc(3y)5.23%
ROICexgc(5y)5.86%
ROCE(3y)3.38%
ROCE(5y)3.56%
ROICexcg growth 3Y-9.43%
ROICexcg growth 5Y-26.39%
ROICexc growth 3Y-9.42%
ROICexc growth 5Y-24.96%
OM growth 3Y-20.2%
OM growth 5Y-27.38%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-2.91%
GM growth 5Y-4.79%
F-Score4
Asset Turnover0.74
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.18 | ||
| Debt/FCF | 7.28 | ||
| Debt/EBITDA | 6.5 | ||
| Cap/Depr | 16.06% | ||
| Cap/Sales | 0.71% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 118.01% | ||
| Profit Quality | N/A | ||
| Current Ratio | 1.11 | ||
| Quick Ratio | 0.84 | ||
| Altman-Z | 1.51 |
F-Score4
WACC4.91%
ROIC/WACC0.45
Cap/Depr(3y)17.3%
Cap/Depr(5y)18.56%
Cap/Sales(3y)0.68%
Cap/Sales(5y)0.81%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-47.25%
EPS 3Y-14.01%
EPS 5Y-25.94%
EPS Q2Q%-16.28%
EPS Next Y13.1%
EPS Next 2Y31.09%
EPS Next 3Y9.85%
EPS Next 5YN/A
Revenue 1Y (TTM)-9.66%
Revenue growth 3Y-4.03%
Revenue growth 5Y-7.26%
Sales Q2Q%-8.61%
Revenue Next Year2.35%
Revenue Next 2Y7.74%
Revenue Next 3Y-1.2%
Revenue Next 5Y-0.46%
EBIT growth 1Y-54.05%
EBIT growth 3Y-23.42%
EBIT growth 5Y-32.65%
EBIT Next Year79.74%
EBIT Next 3Y23.66%
EBIT Next 5Y20.31%
FCF growth 1Y-28.04%
FCF growth 3Y-5.93%
FCF growth 5Y-18.11%
OCF growth 1Y-25.51%
OCF growth 3Y-6.69%
OCF growth 5Y-17.45%