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. XRX has a bad profitability rating. Also its financial health evaluation is rather negative. XRX has a bad growth rate and is valued cheaply.
1. Profitability
1.1 Basic Checks
In the past year XRX was profitable.
XRX had a positive operating cash flow in the past year.
In the past 5 years XRX reported 4 times negative net income.
In the past 5 years XRX always reported a positive cash flow from operatings.
1.2 Ratios
XRX has a worse Return On Assets (-15.98%) than 68.75% of its industry peers.
XRX has a worse Return On Equity (-103.55%) than 65.63% of its industry peers.
XRX has a Return On Invested Capital of 2.38%. This is comparable to the rest of the industry: XRX outperforms 50.00% of its industry peers.
XRX had an Average Return On Invested Capital over the past 3 years of 2.67%. This is significantly below the industry average of 16.14%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -15.98% | ||
| ROE | -103.55% | ||
| ROIC | 2.38% |
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
XRX has a Operating Margin of 2.72%. This is comparable to the rest of the industry: XRX outperforms 46.88% of its industry peers.
XRX's Operating Margin has declined in the last couple of years.
The Gross Margin of XRX (31.46%) is comparable to the rest of the industry.
In the last couple of years the Gross Margin of XRX has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 2.72% | ||
| PM (TTM) | N/A | ||
| GM | 31.46% |
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
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), XRX is destroying value.
The number of shares outstanding for XRX has been increased compared to 1 year ago.
Compared to 5 years ago, XRX has less shares outstanding
The debt/assets ratio for XRX is higher compared to a year ago.
2.2 Solvency
XRX has an Altman-Z score of 1.49. This is a bad value and indicates that XRX is not financially healthy and even has some risk of bankruptcy.
XRX has a Altman-Z score (1.49) which is comparable to the rest of the industry.
XRX has a debt to FCF ratio of 7.38. This is a slightly negative value and a sign of low solvency as XRX would need 7.38 years to pay back of all of its debts.
With a decent Debt to FCF ratio value of 7.38, XRX is doing good in the industry, outperforming 65.63% of the companies in the same industry.
XRX has a Debt/Equity ratio of 2.13. This is a high value indicating a heavy dependency on external financing.
XRX has a Debt to Equity ratio of 2.13. This is in the lower half of the industry: XRX underperforms 71.88% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.13 | ||
| Debt/FCF | 7.38 | ||
| Altman-Z | 1.49 |
ROIC/WACC0.41
WACC5.87%
2.3 Liquidity
A Current Ratio of 1.09 indicates that XRX should not have too much problems paying its short term obligations.
The Current ratio of XRX (1.09) is worse than 71.88% of its industry peers.
XRX has a Quick Ratio of 1.09. This is a bad value and indicates that XRX is not financially healthy enough and could expect problems in meeting its short term obligations.
The Quick ratio of XRX (0.77) is worse than 62.50% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.09 | ||
| Quick Ratio | 0.77 |
3. Growth
3.1 Past
The earnings per share for XRX have decreased strongly by -39.57% in the last year.
XRX shows a very negative growth in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -25.94% yearly.
The Revenue has decreased by -7.45% in the past year.
XRX shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -7.26% yearly.
EPS 1Y (TTM)-39.57%
EPS 3Y-14.01%
EPS 5Y-25.94%
EPS Q2Q%-200%
Revenue 1Y (TTM)-7.45%
Revenue growth 3Y-4.03%
Revenue growth 5Y-7.26%
Sales Q2Q%-3%
3.2 Future
XRX is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 5.31% yearly.
Based on estimates for the next years, XRX will show a decrease in Revenue. The Revenue will decrease by -0.46% on average per year.
EPS Next Y-20.83%
EPS Next 2Y25.06%
EPS Next 3Y5.31%
EPS Next 5YN/A
Revenue Next Year0.37%
Revenue Next 2Y7.33%
Revenue Next 3Y-1.42%
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 5.80 indicates a rather cheap valuation of XRX.
Based on the Price/Earnings ratio, XRX is valued cheaply inside the industry as 100.00% of the companies are valued more expensively.
XRX is valuated cheaply when we compare the Price/Earnings ratio to 27.19, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 3.24, which indicates a rather cheap valuation of XRX.
90.63% of the companies in the same industry are more expensive than XRX, based on the Price/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 35.33, XRX is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 5.8 | ||
| Fwd PE | 3.24 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of XRX indicates a rather cheap valuation: XRX is cheaper than 81.25% of the companies listed in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of XRX indicates a rather cheap valuation: XRX is cheaper than 100.00% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 1.37 | ||
| EV/EBITDA | 8.13 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y25.06%
EPS Next 3Y5.31%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.95%, XRX has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 1.95, XRX pays a better dividend. On top of this XRX pays more dividend than 84.38% of the companies listed in the same industry.
XRX's Dividend Yield is comparable with the S&P500 average which is at 2.35.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.95% |
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
XRX has negative earnings and hence a negative payout ratio. The dividend may be in danger.
The dividend of XRX is growing, but earnings are growing more, so the dividend growth is sustainable.
DP-10.9%
EPS Next 2Y25.06%
EPS Next 3Y5.31%
4.87
-0.22 (-4.32%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupTechnology Hardware & Equipment
GICS IndustryTechnology Hardware, Storage & Peripherals
Earnings (Last)
Earnings (Next)
Inst Owners96.19%
Inst Owner Change0%
Ins Owners7.76%
Ins Owner Change13.73%
Market Cap612.60M
Analysts50.91
Price Target10.41 (113.76%)
Short Float %16.69%
Short Ratio4.98
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.95% |
Yearly Dividend1.14
Dividend Growth(5Y)0.72%
DP-10.9%
Div Incr Years0
Div Non Decr Years6
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-65.17%
Min EPS beat(2)-98.02%
Max EPS beat(2)-32.32%
EPS beat(4)0
Avg EPS beat(4)-53.69%
Min EPS beat(4)-98.02%
Max EPS beat(4)-32.32%
EPS beat(8)2
Avg EPS beat(8)-30.49%
EPS beat(12)5
Avg EPS beat(12)1.81%
EPS beat(16)8
Avg EPS beat(16)-7.27%
Revenue beat(2)1
Avg Revenue beat(2)-1.03%
Min Revenue beat(2)-3.7%
Max Revenue beat(2)1.64%
Revenue beat(4)1
Avg Revenue beat(4)-2.85%
Min Revenue beat(4)-7%
Max Revenue beat(4)1.64%
Revenue beat(8)1
Avg Revenue beat(8)-2.78%
Revenue beat(12)2
Avg Revenue beat(12)-2.11%
Revenue beat(16)4
Avg Revenue beat(16)-1.96%
PT rev (1m)0%
PT rev (3m)-0.95%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-72.41%
EPS NY rev (1m)-9.06%
EPS NY rev (3m)-30%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-4.41%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-1.18%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 5.8 | ||
| Fwd PE | 3.24 | ||
| P/S | 0.1 | ||
| P/FCF | 1.37 | ||
| P/OCF | 1.22 | ||
| P/B | 0.48 | ||
| P/tB | N/A | ||
| EV/EBITDA | 8.13 |
EPS(TTM)0.84
EY17.25%
EPS(NY)1.5
Fwd EY30.83%
FCF(TTM)3.55
FCFY72.97%
OCF(TTM)3.98
OCFY81.78%
SpS49.1
BVpS10.07
TBVpS-7.27
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -15.98% | ||
| ROE | -103.55% | ||
| ROCE | 3.02% | ||
| ROIC | 2.38% | ||
| ROICexc | 2.53% | ||
| ROICexgc | 4.35% | ||
| OM | 2.72% | ||
| PM (TTM) | N/A | ||
| GM | 31.46% | ||
| FCFM | 7.24% |
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)5.26%
ROICexgc(5y)5.88%
ROCE(3y)3.38%
ROCE(5y)3.56%
ROICexcg growth 3Y-8.95%
ROICexcg growth 5Y-26.16%
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 Turnover0.75
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.13 | ||
| Debt/FCF | 7.38 | ||
| Debt/EBITDA | 6.09 | ||
| Cap/Depr | 19.64% | ||
| Cap/Sales | 0.87% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 113.09% | ||
| Profit Quality | N/A | ||
| Current Ratio | 1.09 | ||
| Quick Ratio | 0.77 | ||
| Altman-Z | 1.49 |
F-Score4
WACC5.87%
ROIC/WACC0.41
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)-39.57%
EPS 3Y-14.01%
EPS 5Y-25.94%
EPS Q2Q%-200%
EPS Next Y-20.83%
EPS Next 2Y25.06%
EPS Next 3Y5.31%
EPS Next 5YN/A
Revenue 1Y (TTM)-7.45%
Revenue growth 3Y-4.03%
Revenue growth 5Y-7.26%
Sales Q2Q%-3%
Revenue Next Year0.37%
Revenue Next 2Y7.33%
Revenue Next 3Y-1.42%
Revenue Next 5Y-0.46%
EBIT growth 1Y-25.66%
EBIT growth 3Y-23.42%
EBIT growth 5Y-32.65%
EBIT Next Year52.77%
EBIT Next 3Y23.67%
EBIT Next 5Y20.31%
FCF growth 1Y266.39%
FCF growth 3Y-5.93%
FCF growth 5Y-18.11%
OCF growth 1Y192.98%
OCF growth 3Y-6.69%
OCF growth 5Y-17.45%