Xerox (XRX) is cheap as a result of the 2020 selloff, with relatively bleak prospects for the company so long as the pandemic remains relevant. The company’s valuation is quite low, but some longer-term risks remain. Nonetheless, Xerox may be worth a look as a recovery bet and as a speculative bet on the long-term growth potential of 3D printing.
Coronavirus has a significant impact on Xerox’s business, with second quarter revenue dropping by 35.3% year over year. Adjusted earnings per share fell to 15 cents per share from 64 cents a year ago. The company lost a significant amount of service revenue – which accounts for the largest share of the company’s overall revenue – as customers’ deferred maintenance and lockdowns prevented accessing machines.
A major risk to Xerox is that companies decide to discontinue usage of offices, and thus the Xerox products inside them