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Xerox’s stock has taken a notable hit, dropping to $8.56 in premarket trading as of Tuesday, October 29. This significant decline can be traced back to the company’s failure to meet sales estimates for all three quarters of 2024, which were primarily driven by a downturn in equipment sales even as it maintained positive gross margins.
The reinvention initiative announced earlier this year needs time to take effect, while doubts linger within the printing market regarding Xerox’s near future. Organic equipment sales declined in the color and the black-and-white segments where the company competes, further contributing to the stock’s downward trajectory.
Xerox Leadership
Despite these challenges, Xerox retains a strong foothold in the lower production digital print sector. The company ranks first or second in color equipment sales in the US and Western Europe—particularly with its PrimeLink C9065/70 and Versant series (both sourced from Fujifilm). Furthermore, the Iridesse press, while not a market leader, enjoys steady demand among print service providers (PSPs). While the iGen and Baltoro models do not dominate the larger production cut-sheet digital print color market, they still hold a respectable install base.
Opportunities and Challenges Ahead
Xerox’s transition away from traditional manufacturing might have led to further negative perceptions in the market, overshadowing its otherwise strong marketing and sales capabilities. The company seems to be shifting its focus more towards sourcing hardware printing equipment, phasing out the iGen and Nuvera production lines while strengthening its partnership with Fujifilm and exploring new collaborations with an undisclosed roll-fed inkjet vendor.
For Xerox to thrive in the competitive digital printing market, it must effectively bridge the gap between its Iridesse printer and the future planned roll-fed inkjet press. That particular market, driven by inkjet and B2 cut-sheet devices, presents great opportunities. While the Baltoro color inkjet press remains part of Xerox’s lineup, the company is evaluating strategic options for its high-speed inkjet technology.
Keypoint Intelligence Opinion
Despite current struggles, Xerox possesses strong marketing, sales, and service resources that can support the company as it navigates this transitional period. By sourcing digital printing hardware equipment from suppliers such as Fujifilm and leveraging its own software and business development tools and services, Xerox can add value and differentiate itself in the marketplace. While the printing strategic plan appears sound, successful execution will be crucial for any potential turnaround in stock performance. With the market closely monitoring Xerox’s progress, clear, consistent, and regular communication updates are essential as the company implements its reinvention strategy.
For more information on Xerox’s reinvention plan, read the official statement here.
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