Zacks Research Has Bearish Estimate for Xerox Q3 Earnings

Key Points

• Zacks Research cut Xerox’s Q3 2026 EPS estimate to a loss of $0.06 from projected earnings of $0.16 and maintained a “Hold” rating, signaling continued caution about the company’s earnings recovery.
• Xerox recently exceeded Q2 expectations, reporting $0.38 EPS versus the $0.06 consensus and $1.92 billion in revenue, up 22% year over year. Lexmark acquisition synergies, cost cuts and margin expansion supported the improved outlook.
• Despite institutional investors owning 85.36% of shares and Xerox maintaining a 3.4% dividend yield, the company faces significant risks from declining traditional-print demand and heavy leverage, including a 12.58 debt-to-equity ratio.

Xerox Holdings Co. (NASDAQ:XRX - Free Report) - Equities research analysts at Zacks Research reduced their Q3 2026 earnings per share estimates for Xerox in a report issued on Thursday, August 20th. Zacks Research analyst Team now anticipates that the information technology services provider will post earnings of ($0.06) per share for the quarter, down from their prior estimate of $0.16. Zacks Research has a "Hold" rating on the stock. The consensus estimate for Xerox's current full-year earnings is $0.17 per share. Zacks Research also issued estimates for Xerox's Q1 2027 earnings at $0.03 EPS and FY2027 earnings at $0.72 EPS.

Xerox (NASDAQ:XRX - Get Free Report) last announced its quarterly earnings data on Thursday, July 30th. The information technology services provider reported $0.38 earnings per share for the quarter, topping analysts' consensus estimates of $0.06 by $0.32. Xerox had a positive return on equity of 17.61% and a negative net margin of 11.93%.The firm had revenue of $1.92 billion for the quarter, compared to analyst estimates of $1.90 billion. During the same quarter in the prior year, the company posted ($0.64) earnings per share. Xerox's quarterly revenue was up 22.0% on a year-over-year basis.

Other analysts have also recently issued research reports about the stock. Needham & Company LLC set a $5.00 price objective on shares of Xerox in a research note on Tuesday, August 18th. Citigroup restated a "neutral" rating and set a $3.45 target price (up from $2.50) on shares of Xerox in a research report on Friday, July 31st. Noble Financial initiated coverage on shares of Xerox in a report on Tuesday, August 18th. They issued an "outperform" rating and a $5.00 target price for the company. Finally, Weiss Ratings reiterated a "sell (d-)" rating on shares of Xerox in a research report on Friday, July 24th. One analyst has rated the stock with a Buy rating, two have given a Hold rating and one has assigned a Sell rating to the company. According to MarketBeat.com, the stock presently has an average rating of "Hold" and a consensus price target of $4.48.

Xerox Price Performance

Shares of NASDAQ XRX opened at $2.90 on Monday. The company has a debt-to-equity ratio of 12.58, a quick ratio of 0.85 and a current ratio of 1.18. Xerox has a one year low of $1.19 and a one year high of $4.27. The firm has a market capitalization of $380.83 million, a P/E ratio of -0.39 and a beta of 2.40. The company's fifty day moving average is $2.97 and its two-hundred day moving average is $2.39.

Institutional Investors Weigh In On Xerox

Institutional investors and hedge funds have recently bought and sold shares of the stock. Goldman Sachs Group Inc. increased its position in Xerox by 339.3% during the fourth quarter. Goldman Sachs Group Inc. now owns 9,294,446 shares of the information technology services provider's stock worth $22,028,000 after buying an additional 7,178,915 shares in the last quarter. Charles Schwab Investment Management Inc. boosted its stake in shares of Xerox by 32.3% during the fourth quarter. Charles Schwab Investment Management Inc. now owns 3,498,232 shares of the information technology services provider's stock valued at $8,291,000 after acquiring an additional 854,119 shares during the last quarter. Geode Capital Management LLC boosted its stake in shares of Xerox by 24.4% during the fourth quarter. Geode Capital Management LLC now owns 2,915,580 shares of the information technology services provider's stock valued at $6,911,000 after acquiring an additional 571,715 shares during the last quarter. Two Sigma Investments LP increased its position in Xerox by 43.2% during the 3rd quarter. Two Sigma Investments LP now owns 2,476,689 shares of the information technology services provider's stock worth $9,312,000 after purchasing an additional 746,582 shares in the last quarter. Finally, First Eagle Investment Management LLC lifted its holdings in Xerox by 89.4% in the 4th quarter. First Eagle Investment Management LLC now owns 2,182,500 shares of the information technology services provider's stock valued at $5,173,000 after purchasing an additional 1,030,000 shares in the last quarter. Hedge funds and other institutional investors own 85.36% of the company's stock.

Xerox Dividend Announcement

The firm also recently disclosed a quarterly dividend, which will be paid on Friday, October 30th. Stockholders of record on Wednesday, September 30th will be paid a dividend of $0.025 per share. This represents a $0.10 dividend on an annualized basis and a dividend yield of 3.4%. The ex-dividend date of this dividend is Wednesday, September 30th. Xerox's dividend payout ratio (DPR) is -1.36%.

Key Xerox News

Here are the key news stories impacting Xerox this week:

• Positive Sentiment: Xerox’s second-quarter earnings beat expectations, and the company raised its 2026 outlook. Synergies from the Lexmark acquisition helped improve margins, providing evidence that the turnaround and integration strategy are beginning to deliver benefits. XRX Q2 Beat Lifts 2026 Outlook as Lexmark Synergies Boost Margins
• Positive Sentiment: Cost-cutting initiatives, margin expansion and debt reduction are supporting the investment case. These measures could improve profitability and cash generation if Xerox can sustain the savings and capture additional Lexmark synergies. Is Xerox Stock Worth Buying as Cost Savings Clash With Print Decline?
• Neutral Sentiment: Zacks Research maintained a “Hold” rating. It modestly raised its projected second-quarter 2028 EPS to $0.31, while Noble Financial initiated coverage on Xerox; neither development provides a strong new buy or sell signal. Xerox Coverage Initiated at Noble Financial
• Negative Sentiment: Zacks cut EPS estimates for fiscal 2026 to $0.18 from $0.21 and reduced forecasts for several 2027–2028 periods, including fiscal 2028 to $1.00 from $1.17. The revisions suggest analysts remain cautious about the durability of Xerox’s earnings recovery.
• Negative Sentiment: Revenue continues to face pressure from declining demand for traditional printing, while cash flow and Xerox’s high leverage remain key execution risks. The company’s debt-to-equity ratio of 12.58 further increases sensitivity to operating setbacks and financing costs.

Xerox Company Profile

Xerox Holdings Corporation NYSE: XRX is a global provider of document management technology and services. The company designs and manufactures a broad range of multifunction printers, production printers, digital presses and related consumables. In addition to its hardware offerings, Xerox delivers software and workflow automation solutions, managed print services and cloud-based document platforms that help organizations optimize their information-intensive processes.

Founded in 1906 as The Haloid Photographic Company, Xerox pioneered xerographic imaging in the late 1940s, launching the first plain-paper copier in 1959.

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