XRX is an underrated legacy business with absurdly low expectations. Though XRX’s business model has certainly had its flaws in years past, the company’s leaders now have a laser-like focus on growing revenue.
If you do not currently own XRX, now is the time to consider adding it to your portfolio. Here’s Why.
Based in Rochester, New York, and headquartered in Norwalk, Connecticut, XRX is considered somewhat of a blast from the past as it enjoyed considerable success in prior decades. Nowadays, the mainstream investing media largely ignores XRX, assuming it is a has-been that is unworthy of investors’ attention. However, XRX is thriving even though it is somewhat off the radar.
XRX is still one of the top companies in the printing and document services market. However, as time progresses, the company is altering its products and overarching business strategy. Sales bounced back thanks to the company’s aggressive program for product development. It is no secret that XRX’s managed print services are some of the strongest in the business. In short, XRX relies on data-centric tech to help customers conduct as seamless a digital transformation as possible.
XRX is Building Momentum
XRX enjoyed liquidity of $2.7 billion in the fiscal year 2020. The company’s earnings per share are poised to grow by 40% in ’21. Crunch the numbers and you will find XRX is trading below its intrinsic value. The fourth quarter of ’20 makes it clear that XRX is on the right track. The company reported sequential growth in cash flow, sales, and adjusted earnings in this final quarter of ’20.
It appears as though XRX bottomed out last year around $14, rallied in the summer, and has continued to increase in value ever since. Elevated margins in XRX’s print solutions space along with its IT services and software segment will help the company move even higher in the months ahead.
XRX sales are poised to grow by slightly under 2% in ’21 yet growth doesn’t tell the entire story of XRX. This company is a unicorn of sorts in the sense that it is a tech stock that pays dividends. If everything goes as planned, XRX will generate half a billion in free cash flow across the year ahead.
XRX POWR Ratings
XRX has a B POWR Rating grade, meaning it is a Buy. The stock has B grades in the Quality and Value components. XRX also has C grades in the Momentum and Growth components of the POWR Ratings. If you are curious as to how XRX fares in the Sentiment and Stability components, click here to find out.
Of the 48 publicly traded companies in the Technology – Hardware space, XRX is ranked 17th. You can learn more about the stocks traded in the Technology – Hardware space by clicking here.
XRX is Worthy of Your Investing Dollars
XRX is currently trading at $24.39. The stock’s 52-week high is $26.96. It is only a matter of time until XRX breaks through this ceiling and establishes a new 52-week high. The fact that XRX is ranked in the top 20 of the uber-competitive Technology – Hardware segment is a testament to the company’s merits and also it’s potential across posterity. Keep in mind, this sector as a whole also has a B POWR Rating, meaning the majority of the stocks within it are considered Buys. Add XRX to your portfolio today, hold it for the year ahead and you will likely emerge with a profit.
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XRX shares were unchanged in premarket trading Wednesday. Year-to-date, XRX has gained 6.75%, versus a 6.03% rise in the benchmark S&P 500 index during the same period.
About the Author: Patrick Ryan
Patrick Ryan has more than a dozen years of investing experience with a focus on information technology, consumer and entertainment sectors. In addition to working for StockNews, Patrick has also written for Wealth Authority and Fallon Wealth Management. More...
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