Explaining The Big Rally In Xerox Stock This Year

by Trefis Team
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Xerox (NYSE: XRX), a provider of printing solutions, has seen its stock price rally by close to 50% this year. While the company’s revenues have been declining, it has been reorganizing itself to cut costs and improve its supply chain. This has helped profitability, which is trending steadily higher, with the company beating expectations over Q1 and Q2 2019. Over the first half of the year, EPS stood at $1.36 versus $0.50 a year ago. Separately, the company forged an agreement with HP, which would see Xerox source some entry-level printers from HP (A3 and A4 sizes), while Xerox would provide HP with toners and some other printing technologies (which could be more lucrative compared to developing low-margin hardware). The two companies will also partner in the growing Device-as-a-Service market. Below, we take a look at how the company has fared over the last few years and the outlook over the next two years.

View our interactive dashboard analysis on Explaining The Run-Up In Xerox Holdings’ Stock

How does Xerox’s Revenue Growth In 2018 compare with that in prior periods and what’s the forecast?

Total Revenues for Xerox moderately decreased from $10.3 Bil in 2017 to $9.83 Bil in 2018; a decrease of -4.24%.

This compares with Total Revenues growth of:

  • -9.57% in 2015 compared to 2014
  • -6.05% in 2016 compared to 2015
  • -4.70% in 2017 compared to 2016

We expect Total Revenues to decline by about 6% in 2019.

How does Xerox’s Total Expense In 2018 compare with that in prior periods and what’s the forecast?

Total Expense for Xerox moderately decreased from $9.70 Bil in 2017 to $9.23 Bil in 2018; a decrease of -4.78%.

This compares with Total Expense growth of:

  • -9.04% in 2015 compared to 2014
  • -3.21% in 2016 compared to 2015
  • -4.98% in 2017 compared to 2016

We expect Total Expense growth to be -13.9% in 2019.

How does Xerox’s EBT In 2018 compare with that in prior periods and what’s the forecast?

EBT for Xerox increased moderately by 4.91% from $570 Mil in 2017 to $598 Mil in 2018.

We expect EBT to improve 117% to $1.3 Bil in 2019.

How do Xerox’s Net Income and EPS In 2018 compare with that in prior periods and what’s the forecast?

For more information on Xerox’s Net Income and EPS, view our interactive dashboard analysis.

 

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