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Why You Should Retain Xerox (XRX) in Your Portfolio Now

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Xerox Holdings Corporation (XRX - Free Report) is currently banking on "Project Own It" and a post-sale-driven business model in its endeavor for a strong top and bottom-line performance.

The company’s earnings are anticipated to register growth of 12.6% and 10.7% in 2024 and 2025, respectively.

Factors That Bode Well

Xerox is expanding its presence in small and mid-sized markets, particularly in the United States, U.K., and Canada, through Xerox Business Solutions and acquiring dealers and IT services providers globally. The company is enhancing its portfolio by incorporating cybersecurity and robotic process automation solutions.

"Project Own It" is XRX’s enterprise-wide transformation initiative aimed at increasing productivity and operational efficiency, reducing costs, as well as realigning the business to changing market conditions. "Project Own It” contributes significantly toward cost savings and freeing up capital for investment.

Xerox’s current ratio (a measure of liquidity) at the end of first-quarter 2024 was pegged at 1.37, higher than 1.14 at the end of the preceding quarter and the year-ago quarter's 1.26. A current ratio of more than 1 often indicates that the company will be easily paying off its short-term obligations.

Some Risks

Advancements in IT have replaced the traditional means of sending and storing information by digital media. As a result, Xerox is grappling with a decreased demand for paper-related systems and products.

Xerox’s business is vulnerable to security breaches caused by cyber and malware attacks. These attacks can have a pervasive impact as they can affect the company financially and taint its reputation as well. With technological advancements, there are newer and more sophisticated ways to get unauthorized access without the risk of recognition.

Zacks Rank and Stocks to Consider

Xerox currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader Zacks Business Services sector are Alithya Group (ALYAF - Free Report) and Accolade (ACCD - Free Report) .

Alithya Group currently carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

ALYAF has a long-term earnings growth expectation of 17%. It delivered a trailing four-quarter earnings surprise of 243.8%, on average.

Accolade presently carries a Zacks Rank of 2. It has a long-term earnings growth expectation of 13%. ACCD delivered a trailing four-quarter earnings surprise of 24.6%, on average.


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