Is Xerox (XRX) Stock Undervalued Right Now?
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One stock to keep an eye on is Xerox (XRX). XRX is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock holds a P/E ratio of 7.75, while its industry has an average P/E of 15.57. Over the last 12 months, XRX's Forward P/E has been as high as 20.86 and as low as 6.69, with a median of 9.67.
Finally, we should also recognize that XRX has a P/CF ratio of 4.99. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. XRX's current P/CF looks attractive when compared to its industry's average P/CF of 15.04. XRX's P/CF has been as high as 7.56 and as low as -6.19, with a median of 5.55, all within the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that Xerox is likely undervalued currently. And when considering the strength of its earnings outlook, XRX sticks out at as one of the market's strongest value stocks.
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Xerox Holdings Corporation (XRX) : Free Stock Analysis Report