Why Xerox (XRX) Shares Are Gaining Today

NEW YORK (TheStreet) -- Xerox (XRX) was gaining 2.2% to $11.76 Thursday following the launch of the company's Vehicle Passenger Detection System.

The new Vehicle Passenger Detection System helps enforce HOV/HOT lane rules on highways by identifying the number of passengers in a given vehicle. Xerox says the system can accurately identify the number of passengers in a vehicle with 95% certainty as speeds from "stop-and-go to 100 mph."

"Today, officers must park on the shoulder of a highway and quickly merge into traffic to chase down the violator, putting both the officer and the public at risk," vice president, CTO, Government & Transportation Sector at Xerox Mark Cantelli said in a press release. "This detection system automates the process and improves safety through the use of high-quality images and the generation of an evidence package."

The system was design to help tolling companies manage HOT lanes and law enforcement agencies looking for better HOV enforcement. Xerox says the system can also provide analytics for agencies looking to improve roadway management and traffic patterns, and measure vehicle occupant statistics.

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TheStreet Ratings team rates XEROX CORP as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:

"We rate XEROX CORP (XRX) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its solid stock price performance, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels and expanding profit margins. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Compared to its closing price of one year ago, XRX's share price has jumped by 27.75%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, XRX should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • The debt-to-equity ratio is somewhat low, currently at 0.63, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.18, which illustrates the ability to avoid short-term cash problems.
  • XEROX CORP' earnings per share from the most recent quarter came in slightly below the year earlier quarter. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, XEROX CORP increased its bottom line by earning $0.93 versus $0.88 in the prior year. This year, the market expects an improvement in earnings ($1.13 versus $0.93).
  • Despite the weak revenue results, XRX has outperformed against the industry average of 20.4%. Since the same quarter one year prior, revenues slightly dropped by 3.4%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • You can view the full analysis from the report here: XRX Ratings Report

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Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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