XRX : NYSE : Technology
$10.30 up 0.39 | 3.94%
Today's Range: 10.07 - 10.32
Avg. Daily Volume: 5,598,500
07/29/16 - 4:05 PM ET

Financial Analysis


XEROX CORP's gross profit margin for the first quarter of its fiscal year 2016 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 0.82 which shows a lack of ability to cover short-term cash needs. The liquidity decreased from the same period a year ago, despite already having weak liquidity to begin with. This would indicate deteriorating cash flow.

During the same period, stockholders' equity ("net worth") has decreased by 10.24% 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 FY16 Q1 FY15
Net Sales ($mil)4281.04469.0
EBITDA ($mil)499.0595.0
EBIT ($mil)209.0299.0
Net Income ($mil)34.0225.0


Balance Sheet Q1 FY16 Q1 FY15
Cash & Equiv. ($mil)1189.0872.0
Total Assets ($mil)24857.026657.0
Total Debt ($mil)7388.07598.0
Equity ($mil)9475.010557.0


Profitability Q1 FY16 Q1 FY15
Gross Profit Margin35.3736.83
EBITDA Margin11.6513.31
Operating Margin4.886.69
Sales Turnover0.720.72
Return on Assets1.133.42
Return on Equity3.919.33
Debt Q1 FY16 Q1 FY15
Current Ratio1.111.46
Debt/Capital0.440.42
Interest Expense88.089.0
Interest Coverage2.383.36


Share Data Q1 FY16 Q1 FY15
Shares outstanding (mil)1013.01102.17
Div / share0.080.07
EPS0.030.16
Book value / share9.359.58
Institutional Own % n/a n/a
Avg Daily Volume6729565.07784628.0

Valuation


HOLD. XEROX CORP's P/E ratio indicates a premium compared to an average of 27.40 for the IT Services industry and a premium compared to the S&P 500 average of 25.05. For additional comparison, its price-to-book ratio of 1.04 indicates a significant discount versus the S&P 500 average of 2.81 and a significant discount versus the industry average of 8.25. The price-to-sales ratio is well below both the S&P 500 average and the industry average, indicating a discount.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
XRX 27.91 Peers 27.40   XRX 6.68 Peers 20.12

Average. An average P/E ratio can signify an industry neutral price for a stock and an average growth expectation.

XRX is trading at a valuation on par with 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 8.65 Peers 21.67   XRX 0.22 Peers 2.70

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 1.04 Peers 8.25   XRX -58.34 Peers 23.94

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 0.55 Peers 5.30   XRX -6.58 Peers 22.71

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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