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Xerox Corporation
XRX : NYSE : Technology
$13.15 | %
Today's Range: 12.60 - 13.29
Avg. Daily Volume: 7,955,700
07/25/14 - 4:02 PM ET

Financial Analysis


XEROX CORP's gross profit margin for the first quarter of its fiscal year 2014 is essentially unchanged when compared to the same period a year ago. Sales and net income have dropped, although the growth in net income underperformed the average competitor within the industry, the revenue growth did not. XEROX CORP has weak liquidity. Currently, the Quick Ratio is 0.98 which shows a lack of ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year.

During the same period, stockholders' equity ("net worth") has increased by 6.09% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the future.

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Income Statement Q1 FY14 Q1 FY13
Net Sales ($mil)5121.05202.0
EBITDA ($mil)739.0681.0
EBIT ($mil)394.0352.0
Net Income ($mil)281.0296.0


Balance Sheet Q1 FY14 Q1 FY13
Cash & Equiv. ($mil)1567.0993.0
Total Assets ($mil)28868.029565.0
Total Debt ($mil)8005.08539.0
Equity ($mil)12572.011850.0


Profitability Q1 FY14 Q1 FY13
Gross Profit Margin36.0136.04
EBITDA Margin14.4313.09
Operating Margin7.696.77
Sales Turnover0.740.73
Return on Assets3.964.13
Return on Equity9.1210.04
Debt Q1 FY14 Q1 FY13
Current Ratio1.281.47
Debt/Capital0.390.42
Interest Expense100.0104.0
Interest Coverage3.943.38


Share Data Q1 FY14 Q1 FY13
Shares outstanding (mil)1167.321227.9
Div / share0.060.06
EPS0.230.23
Book value / share10.779.65
Institutional Own % n/a n/a
Avg Daily Volume8056843.01.2980802E7

Valuation


BUY. The current P/E ratio indicates a significant discount compared to an average of 25.16 for the IT Services industry and a discount compared to the S&P 500 average of 19.71. For additional comparison, its price-to-book ratio of 1.19 indicates a significant discount versus the S&P 500 average of 2.73 and a significant discount versus the industry average of 8.00. The price-to-sales ratio is well below both the S&P 500 average and the industry average, indicating a discount. Upon assessment of these and other key valuation criteria, XEROX CORP proves to trade at a discount to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
XRX 13.81 Peers 25.16   XRX 5.55 Peers 16.97

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

XRX is trading at a significant discount to its peers.

 

Discount. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

XRX is trading at a significant discount to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
XRX 10.79 Peers 19.15   XRX 0.76 Peers 1.39

Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations.

XRX is trading at a significant discount to its peers.

 

Discount. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

XRX trades at a significant discount to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
XRX 1.19 Peers 8.00   XRX 1.08 Peers 23.90

Discount. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

XRX is trading at a significant discount to its peers.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, XRX is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
XRX 0.70 Peers 4.64   XRX -1.18 Peers 6.94

Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

XRX is trading at a significant discount to its industry on this measurement.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

XRX significantly trails its peers on the basis of sales growth

 

 

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