20 Underperforming Stocks Targeted By Short Sellers

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5. Xerox Holdings Corporation (NASDAQ:XRX)

Short interest: 17.98%

6 months’ performance: -58.46%

Xerox Holdings Corporation is a workplace technology company. It integrates hardware, software, and services for enterprises. XRX is a developer, designer, and seller of document systems, services, and solutions. The company operates in the Xerox Financial Services (XFS) and Print and Other segments.

2024 proved to be a challenging year for the company. Driven by a continuing decline in its core print business, Q4 revenue dropped by 8.6% YoY. Despite a slight revenue beat supported by ITsavvy contributions, organic growth remained negative, with the core revenue falling 10.2% YoY in constant currency.

The company’s planned acquisition of Lexmark is also raising concerns. One of the major concerns regarding this acquisition is that it is funded by an additional $1.4 billion in debt. If they can implement the acquisition successfully, it could drive a bullish market outlook and short-term EPS growth. However,  if the execution fails, it could worsen the financial position of the firm. Another key risk is that the print industry is experiencing an overall decline. Taking on more debt in such a situation is attracting shorts to the stock.

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