Xerox (XRX) Plunges 10.82% on Six-Day Slide Amid Q2 Earnings Woes and Strategic Uncertainties

Xerox (XRX) fell 2.54% on Thursday, marking its sixth consecutive day of declines as the stock dropped to its lowest level since April 2025. The intraday loss of 2.82% pushed the share price down 10.82% over the past six trading days, reflecting mounting investor concerns over the company’s financial and strategic outlook.

The recent selloff follows XRX’s Q2 2025 earnings report, which revealed a sharp deterioration in key metrics. The company posted an adjusted loss of $0.64 per share, far exceeding expectations of a $0.08 loss, and slashed full-year guidance. Revenue declined 0.1% year-over-year to $1.58 billion, with constant currency revenue falling 1.1%. Gross margin contracted by 440 basis points to 28.6%, driven by margin declines in both equipment and post-sale segments. Operating income fell to $59 million, and free cash flow guidance was cut to $250 million from a previous range of $350–$400 million, raising questions about the company’s ability to sustain its reinvention strategy.

Strategic uncertainties have further weighed on sentiment. XRX’s acquisition of Lexmark has yet to deliver clear synergies, with revised guidance factoring in $30–35 million in tariff-related expenses. The integration has failed to offset declining demand in the equipment segment, which saw a 5.6% sales drop. Analysts remain skeptical about the company’s long-term transformation plan, citing structural challenges in its core document technology business and limited visibility on margin recovery.

External market dynamics have compounded the pressure. Rising Treasury yields, trade policy uncertainties, and broader tech sector weakness have all contributed to a risk-off environment. XRX’s reliance on digital transformation and IT services makes it sensitive to macroeconomic trends, while seasonal market weakness and institutional selling have amplified the decline. Institutional investors, including Barclays and Westpac, have reduced holdings, and analysts from Credit Suisse and Morgan Stanley have reiterated “underperform” ratings, citing weak margins and execution risks.

Despite a modest dividend announcement in August, XRX faces significant headwinds. While some long-term investors view the stock as a value opportunity, near-term challenges—including cash flow constraints, integration costs, and a lack of clear progress in its reinvention—suggest continued volatility. The market’s bearish sentiment, reflected in increased put option activity, underscores the fragility of investor confidence ahead of further earnings reports and macroeconomic developments.