Xerox CorporationXRX

Morningstar Rating

Stock Research and Analysis

by Michael Holt

Tasks such as printing and copying may be considered mundane, but these core business functions represent a market estimated at more than $100 billion. Despite the vast market size, rapid product cycles and a perception that document equipment is a Read more

Bulls Say

The emergence of digital technologies has opened the door for Xerox to take market share in the office segment.

The acquisition Global Imaging Solutions provided an instant presence for Xerox in the market for small and midsize businesses. Additionally, new clients through GIS are generally opting for Xerox's solutions.

Production printing is in the midst of a revolution, with digital equipment supplanting traditional offset machines. With its iGen3 digital production press, Xerox is the best-positioned player.

Xerox's post-sale revenues, including services and consumables, amount to 3 times the initial equipment price during the life of a contract. Read more

Bears Say

The market for document printing and copying technologies is fiercely competitive. Significant resources are required to keep product lines current, but the pricing power of manufacturers remains limited.

Color technologies continue to represent a larger percentage of Xerox's revenue and profits. However, we believe color is a luxury instead of a necessity at most companies. Therefore, this revenue stream could be more cyclical than black-and-white printing.

Xerox has to maintain an expensive direct salesforce and invest in significant resources to educate its customer base regarding the merits of its new product offerings. This extra spending drags on profitability. Read more

Strategy

Xerox invests heavily in research and development to maintain its lead in commercial digital printers, color office equipment, and consumables. Xerox is aggressively expanding its professional-services Read more

Management

Anne Mulcahy, a 32-year company veteran, took the helm in May 2000, ending the revolving door of control at the top of Xerox. She launched an intensive turnaround that pulled the company from the brink of bankruptcy. Ursula Burns, another long-time Read more

Profile

Xerox manufactures document-production and document-management equipment and software. The firm enjoys leading positions in the several of its target markets, including Read more

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