Xerox Holdings’ Shareholders Experience Negative Return Despite Positive Earnings Growth
November 22, 2023
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Despite this, shareholders of the company have not experienced a desirable return over the past five years. Despite the company’s positive growth in earnings during that period, they have experienced a negative return due to a lack of appreciation in their share price. This has been largely attributed to a lack of focus on shareholder returns and mismanagement of capital allocation by management. This underperformance has led many analysts to call into question the company’s capital allocation strategies and management’s ability to maximize shareholder returns.
In order to address these issues and improve returns for shareholders, XEROX ($NASDAQ:XRX) Holdings has recently announced a new capital return plan that will increase dividend payments and share repurchases. It is hoped that this new plan will restore investor confidence and lead to an increase in share price appreciation. Only time will tell if these measures are effective in creating value for shareholders, but it is clear that XEROX Holdings is taking steps to improve shareholder returns going forward.
Earnings
Xerox Holdings recently reported their FY2023 Q3 earning results ending September 30 2021, with total revenue of 1758.0M USD and a net income of 90.0M USD. Compared to the previous year, total revenue saw a minimal increase of 0.4%, while net income saw a significant decrease of 123.5%. Over the last 3 years, total revenue has decreased from 1758.0M USD to 1652.0M USD.
Despite the increase in earnings compared to previous year, XEROX HOLDINGS’ shareholders experienced negative return on their investments. This is a worrying trend for the company and investors will be closely watching to see if they can turn things around in the near future.
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Xerox Holdings. More…
| Total Revenues | Net Income | Net Margin |
| 7.06k | 166 | 4.1% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Xerox Holdings. More…
| Operations | Investing | Financing |
| 483 | 20 | -886 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Xerox Holdings. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 10.44k | 7.64k | 22.69 |
Key Ratios Snapshot
Some of the financial key ratios for Xerox Holdings are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| -2.1% | -12.5% | 3.7% |
| FCF Margin | ROE | ROA |
| 6.2% | 5.3% | 1.6% |
Market Price
The stock opened at $13.8 but closed at $13.6, indicating a decrease of 1.1% from the previous closing price of $13.8. This sub-par performance was surprising considering the company’s recent success in growing its net earnings. The positive earnings trend that Xerox Holdings had achieved in the past few quarters could not offset the market pressure that put the company’s stock under downward pressure. Despite this setback, Xerox Holdings remains a strong player in the print technology sector and is well-positioned to capitalize on the industry’s growth trajectory. Live Quote…
Analysis
GoodWhale conducted an analysis of XEROX HOLDINGS‘s wellbeing and based on our Star Chart, we found that XEROX HOLDINGS has a high health score of 8/10. This score is considering the company’s cashflows and debt and indicates that it is capable of sustaining future operations in times of crisis. We further evaluated XEROX HOLDINGS’s performance in four key areas – dividend, profitability, asset, and growth. We found that XEROX HOLDINGS is strong in dividend, medium in profitability and weak in asset and growth. Based on these findings, we classified XEROX HOLDINGS as a ‘cow’, a type of company that has the track record of paying out consistent and sustainable dividends. Given these characteristics, we believe that this type of company would be attractive to investors seeking a long-term, stable investment. These investors may include retirees looking to maximize their income stream, or those who value steady returns over higher risk investments. More…
Peers
The competition between Xerox Holdings Corp and its competitors is fierce. Each company is vying for market share and trying to outdo the other in terms of product offerings and customer service. This competition is good for consumers as it leads to innovation and better prices.
– CPI Computer Peripherals International SA ($LTS:0OKA)
CPI Computer Peripherals International SA is a publicly traded company with a market capitalization of 6.87M as of 2022. The company specializes in the production and distribution of computer peripherals and related products. CPI Computer Peripherals International SA has a strong presence in the European market and is headquartered in Geneva, Switzerland.
– Ekennis Software Service Ltd ($BSE:543475)
Ekennis Software Service Ltd is a publicly traded company with a market capitalization of approximately $254.8 million as of 2022. The company has a strong return on equity (ROE) of 27.58%. Ekennis provides software development and other IT services to businesses worldwide. The company has a strong reputation for delivering quality services and has a loyal clientele base.
– Cambricon Technologies Corp Ltd ($SHSE:688256)
Cambricon Technologies Corp Ltd is a Chinese company that designs and manufactures semiconductor products. The company has a market cap of 27.13B as of 2022 and a return on equity of -13.79%. Cambricon Technologies Corp Ltd’s products are used in a variety of industries, including telecommunications, automotive, and consumer electronics. The company’s products are used in a variety of applications, including mobile phones, base stations, set-top boxes, and GPS devices.
Summary
Xerox Holdings has struggled to generate a satisfactory return for investors over the past five years. Despite positive earnings growth, its stock price has been unable to follow suit. This could be because of the volatility in the market, or because the company is unable to keep up with its competitors. Investors should exercise caution and carefully evaluate the fundamentals of Xerox Holdings before investing in it.
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