Xerox Corp. (XRX) pleased investors with its earnings release last week. Covering analysts continue to raise estimates making shares of XRX an even better value.

Company Description

Xerox Corp is well known for its copy, printer and multi-functional machines as well as software solutions to improve business productivity. The company also sells paper and network integration products.

Another Surprise

Xerox just announced quarterly results on Jan 21 that showed earnings per shares of 25 cents, 3 cents better than analysts expected. This marked the company’s fourth consecutive earnings surprise.

Revenues dipped slightly to $4.2 billion, but Xerox’s continued efforts to streamline its business model leaves it well positioned for an economic turnaround.

Estimates Rising

Analysts have submitted 11 upward revisions for full-year fiscal 2010 since the earnings release. The Zacks Consensus is now 79 cents, up from 73 cents. Next year’s forecasts are coming in at 99 cents, up from 94 cents.

If these levels are met, Xerox’s earnings growth rates will be 32% and 25%, respectively.

Valuation

Currently, shares of XRX are trading at 11 times forward earnings. Xerox’s price to sales ratio is about 0.5 times.

The Chart

Investors loved the earnings news, but the broader sell off weighed on the stock giving it an even better value. Take a look at the chart below.

Bill Wilton is the Growth Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Growth Trader service

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