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Xerox (XRX) Hurt by Weak Revenues & Debt-Heavy Balance Sheet

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Zacks Equity Research
·2 min read
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We recently issued an updated report on Xerox Holdings Corporation XRX.

In the past year, shares of Xerox have lost 35.7% against 2.2% rise of the industry it belongs to.

The company’s revenues continue to face pandemic-led weakness and bear the brunt of lower demand for paper-related systems and products.

Xerox has a debt-laden balance sheet. Its cash and cash equivalent balance of $2.63 billion at the end of the fourth-quarter 2020 was below the long-term debt level of $4.05 billion. This indicates that the company doesn’t have enough cash to meet this debt burden. Nevertheless, the cash level can meet the short-term debt of $394 million.

Another major threat involves the availability of a large number of substitutes because of strong peer presence, although there are lesser chances of new entry. Companies like Canon, Hewlett-Packard, Lexmark and Toshiba are capable of giving tough competition to Xerox.

Meanwhile, Xerox’s businesses are benefiting from "Project Own It," an enterprise-wide transformation initiative aimed at increasing productivity and operational efficiency, reducing costs as well as realigning business to changing market conditions.

Zacks Rank and Stocks to Consider

Xerox currently carries a Zacks Rank #4 (Sell).

Some better-ranked service stocks are SailPoint Technologies SAIL, NV5 Global NVEE and TeleTech Holdings TTEC, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The long-term expected earnings per share (three to five years) growth rate for SailPoint, NV5 Global and TeleTech is pegged at 15%, 18% and 19.4%, respectively.

More Stock News: This Is Bigger than the iPhone!

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TeleTech Holdings, Inc. (TTEC) : Free Stock Analysis Report

Xerox Holdings Corporation (XRX) : Free Stock Analysis Report

NV5 Global, Inc. (NVEE) : Free Stock Analysis Report

SailPoint Technologies Holdings, Inc. (SAIL) : Free Stock Analysis Report

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