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Xerox Holdings Corp XRX

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Morningstar’s Analysis

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Economic Moat


Capital Allocation


Xerox’s Top Line Sinks as Enterprise Print Demand Remains Low; Maintain FVE; Shares Fairly Valued

Analyst Note

| Malik Ahmed Khan |

No-moat Xerox reported disappointing fourth-quarter results below our expectations. The time value of money offset the weak financial results’ impact on our fair value following our valuation model roll. As a result, we are maintaining our $18 fair value estimate. While COVID-19-related trends drove the financial weakness this quarter, we are also bearish on Xerox’s long-term prospects as we anticipate the print industry to remain in secular decline. We believe the market is valuing Xerox’s business accurately, and we view the company’s shares as fairly valued.

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Company Profile

Business Description

Xerox is an original equipment manufacturing and software company. Xerox operates in one segment--design, development, and sale of printing technology and related solutions--while deriving 60% of its revenue from the U.S. and 40% from international markets. The company is an OEM of multifunction printers, or MFPs (printers that can print, copy, and scan), focusing on large enterprise markets. Apart from equipment, the company provides post-sales services like managed print services--a service that helps to bring smart servicing and efficiencies to how employers use their print/copy equipment. Xerox is attempting to enter new markets like digital print packaging solutions and printed electronics.

201 Merritt 7, P.O. Box 4505
Norwalk, CT, 06851-1056
T +1 203 849-5216
Sector Technology
Industry Information Technology Services
Most Recent Earnings Sep 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type High Yield
Employees 24,000