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Here's Why Investors Should Retain Xerox (XRX) Stock Now
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Xerox Holdings Corporation’s (XRX - Free Report) bottom line is benefiting from "Project Own It", an enterprise-wide transformation initiative aimed at increasing productivity and operational efficiency, reducing costs, and realigning businesses to changing market conditions.
Factors That Augur Well
"Project Own It” is contributing significantly to freeing up capital for investments. Through this initiative, XRX exceeded gross savings of $375 million in 2021 and expects $300 million of gross cost savings in 2022.
Xerox boasts a post-sale-driven business model, providing significant recurring revenues and cash generation. Around 78% of XRX’s total revenues in 2021 were associated with contracted services, equipment maintenance services, consumable supplies and financing. This business model supports strong cash flows, helping a company make strategic investments and penetrate markets with high-growth potential.
Xerox’s ongoing investments in Xerox Business Solutions, indirect market channels and European sales channels are helping it expand its small and mid-sized (SMB) market. XRX is expanding its offerings through the inclusion of cyber security and robotic process automation solutions. It is also extending its IT Services business geographically to strengthen its foothold in the SMB market.
Some Risks
Xerox’s current ratio at the end of the June quarter was pegged at 1.20, lower than the current ratio of 1.21 reported at the end of the March quarter. A decreasing current ratio is not desirable as it indicates that a company may have problems meeting its short-term debt obligations.
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Here's Why Investors Should Retain Xerox (XRX) Stock Now
Xerox Holdings Corporation’s (XRX - Free Report) bottom line is benefiting from "Project Own It", an enterprise-wide transformation initiative aimed at increasing productivity and operational efficiency, reducing costs, and realigning businesses to changing market conditions.
Factors That Augur Well
"Project Own It” is contributing significantly to freeing up capital for investments. Through this initiative, XRX exceeded gross savings of $375 million in 2021 and expects $300 million of gross cost savings in 2022.
Xerox boasts a post-sale-driven business model, providing significant recurring revenues and cash generation. Around 78% of XRX’s total revenues in 2021 were associated with contracted services, equipment maintenance services, consumable supplies and financing. This business model supports strong cash flows, helping a company make strategic investments and penetrate markets with high-growth potential.
Xerox’s ongoing investments in Xerox Business Solutions, indirect market channels and European sales channels are helping it expand its small and mid-sized (SMB) market. XRX is expanding its offerings through the inclusion of cyber security and robotic process automation solutions. It is also extending its IT Services business geographically to strengthen its foothold in the SMB market.
Some Risks
Xerox’s current ratio at the end of the June quarter was pegged at 1.20, lower than the current ratio of 1.21 reported at the end of the March quarter. A decreasing current ratio is not desirable as it indicates that a company may have problems meeting its short-term debt obligations.
Zacks Rank and Stocks to Consider
Xerox currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some better-ranked stocks in the broader Zacks Business Services sector are Genpact Limited (G - Free Report) , Automatic Data Processing, Inc. (ADP - Free Report) and CRA International, Inc. (CRAI - Free Report) .
Genpact carries a Zacks Rank #2 at present. G has a long-term earnings growth expectation of 12.2%.
Genpact delivered a trailing four-quarter earnings surprise of 10.1%, on average.
ADP carries a Zacks Rank #2 (Buy) at present. ADP has a long-term earnings growth expectation of 12%.
ADP delivered a trailing four-quarter earnings surprise of 5%, on average.
CRA International carries a Zacks Rank of 2, currently. CRAI has a long-term earnings growth expectation of 14.3%.
CRAI delivered a trailing four-quarter earnings surprise of 26%, on average.