Investors Purchase Large Volume of Call Options on Xerox (NASDAQ:XRX)

Xerox Holdings Co. (NASDAQ:XRX) saw some unusual options trading activity on Thursday. Stock traders purchased 10,301 call options on the company. This represents an increase of 130% compared to the typical daily volume of 4,479 call options.

Institutional Trading of Xerox

Several institutional investors have recently made changes to their positions in the stock. Goldman Sachs Group Inc. lifted its stake in shares of Xerox by 339.3% in the 4th quarter. Goldman Sachs Group Inc. now owns 9,294,446 shares of the information technology services provider’s stock valued at $22,028,000 after purchasing an additional 7,178,915 shares in the last quarter. First Eagle Investment Management LLC grew its holdings in shares of Xerox by 89.4% during the 4th quarter. First Eagle Investment Management LLC now owns 2,182,500 shares of the information technology services provider’s stock worth $5,173,000 after purchasing an additional 1,030,000 shares during the period. Charles Schwab Investment Management Inc. increased its position in Xerox by 32.3% during the 4th quarter. Charles Schwab Investment Management Inc. now owns 3,498,232 shares of the information technology services provider’s stock worth $8,291,000 after purchasing an additional 854,119 shares in the last quarter. Jacobs Levy Equity Management Inc. raised its holdings in Xerox by 123.2% in the third quarter. Jacobs Levy Equity Management Inc. now owns 1,528,219 shares of the information technology services provider’s stock valued at $5,746,000 after buying an additional 843,504 shares during the period. Finally, Mitsubishi UFJ Asset Management Co. Ltd. raised its holdings in Xerox by 104.5% in the fourth quarter. Mitsubishi UFJ Asset Management Co. Ltd. now owns 1,585,215 shares of the information technology services provider’s stock valued at $3,900,000 after buying an additional 809,861 shares during the period. 85.36% of the stock is owned by hedge funds and other institutional investors.

Xerox Trading Down 15.5%

NASDAQ XRX opened at $2.95 on Friday. The company has a market cap of $385.80 million, a P/E ratio of -0.40 and a beta of 2.40. Xerox has a 12 month low of $1.19 and a 12 month high of $5.22. The company has a debt-to-equity ratio of 12.58, a current ratio of 1.18 and a quick ratio of 0.85. The company has a 50-day moving average of $3.02 and a 200-day moving average of $2.31.

Xerox (NASDAQ:XRX) last released its earnings results on Thursday, April 30th. The information technology services provider reported ($0.11) earnings per share (EPS) for the quarter, topping the consensus estimate of ($0.20) by $0.09. Xerox had a negative net margin of 11.93% and a positive return on equity of 17.61%. The business had revenue of $1.85 billion for the quarter, compared to analysts’ expectations of $1.78 billion. During the same period last year, the company earned ($0.06) earnings per share. The company’s quarterly revenue was up 26.7% on a year-over-year basis. As a group, equities analysts predict that Xerox will post 0.03 earnings per share for the current year.

Xerox Dividend Announcement

The business also recently declared a quarterly dividend, which was paid on Friday, July 31st. Shareholders of record on Tuesday, June 30th were paid a dividend of $0.025 per share. The ex-dividend date of this dividend was Tuesday, June 30th. This represents a $0.10 dividend on an annualized basis and a yield of 3.4%. Xerox’s dividend payout ratio (DPR) is currently -1.36%.

Analyst Upgrades and Downgrades

XRX has been the topic of a number of analyst reports. Zacks Research upgraded shares of Xerox from a “strong sell” rating to a “hold” rating in a research report on Thursday, April 30th. Weiss Ratings reiterated a “sell (d-)” rating on shares of Xerox in a report on Friday, July 24th. Finally, Citigroup reissued a “neutral” rating and set a $3.45 price target (up from $2.50) on shares of Xerox in a research note on Friday. Two research analysts have rated the stock with a Hold rating and one has given a Sell rating to the stock. Based on data from MarketBeat, Xerox has a consensus rating of “Reduce” and an average price target of $3.45.

Xerox News Roundup

Here are the key news stories impacting Xerox this week:

• Positive Sentiment: Quarterly profit significantly exceeded expectations. Xerox reported adjusted earnings of $0.36 per share, versus the consensus estimate of $0.06, compared with a $0.64 loss a year earlier. GAAP net income was $13 million, or $0.07 per share. Xerox Q2 earnings report
• Positive Sentiment: Revenue and operating performance improved. Second-quarter revenue rose 22% year over year to $1.922 billion, slightly above the $1.90 billion analyst estimate. Adjusted operating income reached $203 million, with a 10.6% margin. Xerox second-quarter results
• Positive Sentiment: Management raised its 2026 targets. Xerox now expects approximately $7.6 billion in revenue, adjusted operating income of $555 million to $605 million, and free cash flow of about $250 million. It also increased its Lexmark gross cost-synergy target by $50 million to at least $350 million.
• Positive Sentiment: Leverage reduction supported the turnaround narrative. The company said it reduced total debt by more than $200 million during the quarter, while the earnings beat and outlook upgrade triggered a substantial short squeeze. Call-option purchases were also about 130% above average, adding to near-term trading momentum. Xerox short squeeze report
• Neutral Sentiment: Some of the quarterly strength may not be recurring. Results included a $105 million pretax benefit from recognizing IEEPA tariff receivables, and free cash flow was only $11 million in the quarter. Investors will likely watch whether profitability and cash generation remain strong without this benefit.
• Negative Sentiment: Institutional positioning remains a concern. Recent filings showed substantially more institutional investors reducing positions than adding shares, including large reductions by Goldman Sachs, BlackRock and Millennium Management. Xerox also continues to face balance-sheet risk despite its debt reduction.

About Xerox

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.