Xerox Story

XRX -  USA Stock  

USD 24.47  0.15  0.62%

As many of us are excited about technology space, it is fair to break down Xerox Corp. What exactly are Xerox Corp shareholders getting in May? Is current the firm value sustainable? We will go over Xerox Corp valuation drivers to give you a better outlook on taking a position in it. What are Xerox Corp's target price odds to finish over the current price? Based on a normal probability distribution, the odds of Xerox Corp jumping above the current price in 30 days from now is about 23.56%. The Xerox Corp probability density function shows the probability of Xerox Corp stock to fall within a particular range of prices over 30 days. Considering the 30-day investment horizon Xerox Corp has a beta of 0.9255. This entails Xerox Corp market returns are sensitive to returns on the market. As the market goes up or down, Xerox Corp is expected to follow. Additionally, the company has an alpha of 0.025, implying that it can generate a 0.025 percent excess return over DOW after adjusting for the inherited market risk (beta).
Published over two weeks ago
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Is Xerox Corp (NYSE:XRX) ready for a correction?
The company has 4.79 B in debt with debt to equity (D/E) ratio of 0.82, which is OK given its current industry classification. Xerox Corp has a current ratio of 2.28, demonstrating that it is liquid and is capable to disburse its financial commitments when the payables are due.
Our trade advice module complements current analysts and expert consensus on Xerox Corp. It analyzes the entity potential to grow using all fundamental, technical, and market related data available at the time.
We determine the current worth of Xerox Corp using both absolute as well as relative valuation methodologies to arrive at its intrinsic value. In general, an absolute valuation paradigm, as applied to this company, attempts to find the value of Xerox Corp based exclusively on its fundamental and basic technical indicators. By analyzing Xerox Corp's financials, quarterly and monthly indicators, and related drivers such as dividends, operating cash flow, and various types of growth rates, we attempt to find the most accurate representation of Xerox Corp's intrinsic value. In some cases, mostly for established, large-cap companies, we also incorporate more traditional valuation methods such as dividend discount, discounted cash flow, or asset-based models. As compared to an absolute model, our relative valuation model uses a comparative analysis of Xerox Corp. We calculate exposure to Xerox Corp's market risk, different technical and fundamental indicators, relevant financial multiples and ratios, and then comparing them to Xerox Corp's related companies.

Xerox Corp Investment Alerts

Xerox investment alerts and warnings help investors to get more proficient at understanding not only critical technical and fundamental signals but also the significant portfolio-centered indicators. These indicators include beta, alpha, and other risk-related measures that will help you in monitoring Xerox Corp performance across your portfolios.Please check all investment alerts for Xerox

Xerox Corp Valuation Ratios as Compared to Competition

Our valuation model uses many indicators to compare Xerox value to that of its competitors to determine the firm's financial worth. You can analyze the relationship between different fundamental ratios across Xerox Corp competition to find correlations between indicators driving the intrinsic value of Xerox.

How Xerox utilizes its cash?

To perform a cash flow analysis of Xerox Corp, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash Xerox Corp is receiving and how much cash it distributes out in a given period. The Xerox Corp cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities.
Xerox Corp Net Cash Flow from Operations is fairly stable at the moment as compared to the past year. Xerox Corp reported Net Cash Flow from Operations of 548 Million in 2020

Acquisition or disposition of Xerox Corp securities by Icahn Carl C

Legal trades by Xerox Corp insiders are very common, as founders, directors, or employees of any publicly traded firm often have stock or stock options. These trades are made public in the United States through the filing of Form 4 of the Securities and Exchange Commission. Below entry was recorded recently and is publicly available as an insider trade:
Xerox insider trading alert for acquisition or disposition of forward contract (obligation to purchase) by Icahn Carl C, the corporate stakeholder, on 30th of April 2021. This event was filed by Xerox Holdings Corp with SEC on 2021-04-30. Statement of changes in beneficial ownership - SEC Form 4 [view details]   
Note, although insider trading is legal, in the United States, Canada, Australia, and Germany, for mandatory reporting purposes, corporate insiders are defined as a company's officers, directors, and any beneficial owners of more than 10% of a class of the company's equity securities.

A Deeper Perspective

The entity reported the last year's revenue of 7.02 B. Total Income to common stockholders was 178 M with profit before taxes, overhead, and interest of 2.63 B.
 2018 2019 2020 2021 (projected)
Receivables2.6 B2.5 B2.06 B3.19 B
Inventories818 M694 M843 M970.42 M

Margins Breakdown

Xerox profit margins show the degree to which it makes money. Margin indicators are used not only by investors but also by creditors or Xerox Corp itself as indicators of financial health and management effectiveness. Please look more closely at the different varieties of Xerox Corp profit margins.
Profit Margin
Operating Margin
Operating Margin6.37
EBITDA Margin10.69
Gross Margin35.89
Profit Margin3.19

Xerox Corp Earnings Before Interest Taxes and Depreciation Amortization EBITDA is fairly stable at the moment. Xerox Corp Earnings Before Interest Taxes and Depreciation Amortization USD is decreasing over the last 8 years. The current value of Xerox Corp Earnings Before Interest Taxes and Depreciation Amortization USD is 1,564,263,158. Furthermore, Xerox Corp Revenue Per Employee is increasing over the last 8 years. Xerox Corp Earnings Before Interest Taxes and Depreciation Amortization EBITDA is fairly stable at the moment. Xerox Corp Earnings Before Interest Taxes and Depreciation Amortization USD is decreasing over the last 8 years. The current value of Xerox Corp Earnings Before Interest Taxes and Depreciation Amortization USD is 1,564,263,158. Furthermore, Xerox Corp Revenue Per Employee is increasing over the last 8 years. The previous year's value of Xerox Corp Revenue Per Employee was 240,276.

Xerox technical analysis suggests possible turnaround

Xerox Corp current downside variance rises over 5.43. Xerox Corp currently demonstrates below-average downside deviation. It has Information Ratio of 0.01 and Jensen Alpha of 0.02. However, we advise investors to further question Xerox Corp expected returns to ensure all indicators are consistent with the current outlook about its relatively low value at risk. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Xerox Corp's stock risk against market volatility during both bullying and bearish trends. The higher level of volatility that comes with bear markets can directly impact Xerox Corp's stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall.

The Bottom Line

While many other companies within the information technology services industry are still a little expensive, even after the recent corrections, Xerox Corp may offer a potential longer-term growth to investors. On the whole, as of the 20th of April 2021, our concluding 30 days buy-or-sell advice on the company is Hold. We believe Xerox Corp is currently overvalued with below average odds of financial distress for the next two years.

About Contributor

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Achuva Shats do not own shares of Xerox Corp. Please refer to our Terms of Use for any information regarding our disclosure principles.

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