Is Xerox Holdings Corporation (XRX) positioned for future growth?

Xerox Holdings Corporation (NASDAQ: XRX) stock jumped 2.94% on Friday to $17.48 against a previous-day closing price of $16.98. With 1.18 million shares changed hands, the volume of the stock remained lighter than its average volume of 2.24 million shares. During the session, the Information Technology Services company that operates in wider Technology sector, reached to the highest price of $17.54 whereas the lowest price it dropped to was $17.08. The 52-week range on XRX shows that it touched its highest point at $24.45 and its lowest point at $13.24 during that stretch. It currently has a 1-year price target of $14.67. With its current market cap of 2.64 billion, XRX has annualized dividend of $1.00 while the current yield stands at 5.72%. Beta for the stock currently stands at 1.72.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of XRX was up-trending over the past week, with a rise of 4.55%, but this was up by 25.04% over a month. Three-month performance dropped to -1.30% while six-month performance fell -20.76%. The stock lost -28.27% in the past year, while it has lost -22.79% so far this year. A look at the trailing 12-month EPS for XRX yields -3.94 with Next year EPS estimates of 1.71. For the next quarter, that number is 0.44. This implies an EPS growth rate of -404.10% for this year and 48.39% for next year. EPS is expected to grow by 6.00% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of -25.30%.

Float and Shares Shorts:

At present, 156.36 million XRX shares are outstanding with a float of 144.81 million shares on hand for trading. On Jul 14, 2022, short shares totaled 9.71 million, which was 6.27% higher than short shares on Jun 14, 2022. In addition to Mr. Steven John Bandrowczak as the firm’s Pres, COO & Interim CEO, Mr. Xavier Heiss serves as its Exec. VP & CFO.

Institutional Ownership:

Through their ownership of 96.51% of XRX’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 61.56% of XRX, in contrast to 34.44% held by mutual funds. Shares owned by individuals account for 23.10%. As the largest shareholder in XRX with 22.12% of the stake, Icahn Associates Holding LLC holds 34,245,314 shares worth 34,245,314. A second-largest stockholder of XRX, SMH Capital Advisors LLC, holds 17,067,000 shares, controlling over 11.02% of the firm’s shares. The Vanguard Group, Inc. is the third largest shareholder in XRX, holding 12,994,161 shares or 8.39% stake. With a 2.23% stake in XRX, the iShares Core S&P Mid Cap ETF is the largest stakeholder. A total of 3,446,867 shares are owned by the mutual fund manager. The Vanguard Total Stock Market Index, which owns about 2.07% of XRX stock, is the second-largest Mutual Fund holder. It holds 3,203,042 shares valued at 47.57 million. Vanguard Small Cap Index Fund holds 1.77% of the stake in XRX, owning 2,736,037 shares worth 40.63 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for XRX since 6 analysts follow the stock currently. There are 0 analysts who recommend BUY ratings, while 3 suggest SELL ratings. Of the remaining analysts, 2 believe that the stock is worth HOLDING, 0 give it an OVERWEIGHT rating, and 1 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With XRX analysts setting a high price target of $15.00 and a low target of $14.00, the average target price over the next 12 months is $14.42. Based on these targets, XRX could drop -14.19% to reach the target high and fall by -19.91% to reach the target low. Reaching the average price target will result in a decline of -17.51% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. XRX will report FY 2022 earnings on 01/24/2023. Analysts have provided yearly estimates in a range of $1.38 being high and $1.00 being low. For XRX, this leads to a yearly average estimate of $1.18. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Xerox Holdings Corporation surprised analysts by $0.05 when it reported $0.13 EPS against a consensus estimate of $0.08. The surprise factor in the prior quarter was -$0.25. Based on analyst estimates, the high estimate for the next quarter is $0.47 and the low estimate is $0.32. The average estimate for the next quarter is thus $0.42.

Dividends & Yield:

In terms of dividends, XRX has a current ratio of $1.0, which is $1.0 over the trailing 12-months, while a dividend of $0.97 is likely to be paid on average over the next five years. Dividend yield is another indicator that appeals to many investors, and XRX currently yields $5.72. In the past year, XRX’s dividend yield has been $5.72, but when looking at the stock over the past five years, its yield has been $4.1. Accordingly, XRX has a current buyback yield of $21.71. This was $21.71 for the TTM, and it was $11.18 for the past five years.

Summary of Insider Activity:

Insiders traded XRX stock several times over the past three months with 8 Buys and 2 Sells. In these transactions, 146,829 shares were bought while 23,478 shares were sold. The number of buy transactions has increased to 81 while that of sell transactions has risen to 102 over the past year. The total number of shares bought during that period was 4,354,313 while 930,903 shares were sold.

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