It's been a pretty great week for Xerox Holdings Corporation (NASDAQ:XRX) shareholders, with its shares surging 13% to US$4.84 in the week since its latest first-quarter results. The results were positive, with revenue coming in at US$1.5b, beating analyst expectations by 3.8%. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

We've discovered 2 warning signs about Xerox Holdings. View them for free.

Following last week's earnings report, Xerox Holdings' four analysts are forecasting 2025 revenues to be US$6.19b, approximately in line with the last 12 months. Earnings are expected to improve, with Xerox Holdings forecast to report a statutory profit of US$3.62 per share. In the lead-up to this report, the analysts had been modelling revenues of US$6.25b and earnings per share (EPS) of US$2.80 in 2025. Although the revenue estimates have not really changed, we can see there's been a considerable lift to earnings per share expectations, suggesting that the analysts have become more bullish after the latest result.

View our latest analysis for Xerox Holdings

The consensus price target fell 12% to US$8.80, suggesting the increase in earnings forecasts was not enough to offset other the analysts concerns. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Xerox Holdings at US$14.91 per share, while the most bearish prices it at US$4.50. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how analysts think this business will perform. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Xerox Holdings' past performance and to peers in the same industry. It's also worth noting that the years of declining revenue look to have come to an end, with the forecast stauing flat to the end of 2025. Historically, Xerox Holdings' top line has shrunk approximately 4.2% annually over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 5.8% per year. Although Xerox Holdings' revenues are expected to improve, it seems that it is still expected to grow slower than the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Xerox Holdings following these results. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Xerox Holdings' future valuation.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Xerox Holdings analysts - going out to 2027, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 2 warning signs for Xerox Holdings (1 can't be ignored!) that you need to be mindful of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.