DXC TECHNOLOGY CO (DXC) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:DXC - US23355L1061 - Common Stock
13.2 USD
+0.09 (+0.69%)
13.2 USD
0 (0%)
DXC gets a fundamental rating of 3 out of 10. The analysis compared the fundamentals against 86 industry peers in the IT Services industry. While DXC is still in line with the averages on profitability rating, there are concerns on its financial health. DXC is cheap, but on the other hand it scores bad on growth.
1. Profitability
1.1 Basic Checks
In the past year DXC was profitable.
DXC had a positive operating cash flow in the past year.
The reported net income has been mixed in the past 5 years: DXC reported negative net income in multiple years.
Each year in the past 5 years DXC had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of 2.75%, DXC is in line with its industry, outperforming 57.65% of the companies in the same industry.
DXC has a better Return On Equity (12.15%) than 71.76% of its industry peers.
DXC has a Return On Invested Capital of 2.72%. This is comparable to the rest of the industry: DXC outperforms 52.94% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for DXC is significantly below the industry average of 29.77%.
The last Return On Invested Capital (2.72%) for DXC is above the 3 year average (2.61%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.75% | ||
| ROE | 12.15% | ||
| ROIC | 2.72% |
ROA(3y)0.01%
ROA(5y)0.58%
ROE(3y)-0.32%
ROE(5y)2.05%
ROIC(3y)2.61%
ROIC(5y)N/A
1.3 Margins
DXC has a Profit Margin of 2.93%. This is comparable to the rest of the industry: DXC outperforms 54.12% of its industry peers.
In the last couple of years the Profit Margin of DXC has declined.
The Operating Margin of DXC (3.51%) is comparable to the rest of the industry.
DXC's Operating Margin has declined in the last couple of years.
The Gross Margin of DXC (24.59%) is worse than 70.59% of its industry peers.
DXC's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 3.51% | ||
| PM (TTM) | 2.93% | ||
| GM | 24.59% |
OM growth 3Y8.71%
OM growth 5Y-14.76%
PM growth 3Y-11.86%
PM growth 5YN/A
GM growth 3Y3.04%
GM growth 5Y0.17%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), DXC is destroying value.
The number of shares outstanding for DXC has been increased compared to 1 year ago.
Compared to 5 years ago, DXC has less shares outstanding
The debt/assets ratio for DXC has been reduced compared to a year ago.
2.2 Solvency
DXC has an Altman-Z score of 0.89. This is a bad value and indicates that DXC is not financially healthy and even has some risk of bankruptcy.
DXC has a Altman-Z score of 0.89. This is in the lower half of the industry: DXC underperforms 68.24% of its industry peers.
The Debt to FCF ratio of DXC is 4.26, which is a neutral value as it means it would take DXC, 4.26 years of fcf income to pay off all of its debts.
DXC has a Debt to FCF ratio of 4.26. This is comparable to the rest of the industry: DXC outperforms 54.12% of its industry peers.
DXC has a Debt/Equity ratio of 1.25. This is a high value indicating a heavy dependency on external financing.
DXC's Debt to Equity ratio of 1.25 is on the low side compared to the rest of the industry. DXC is outperformed by 70.59% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.25 | ||
| Debt/FCF | 4.26 | ||
| Altman-Z | 0.89 |
ROIC/WACC0.36
WACC7.52%
2.3 Liquidity
DXC has a Current Ratio of 1.09. This is a normal value and indicates that DXC is financially healthy and should not expect problems in meeting its short term obligations.
The Current ratio of DXC (1.09) is worse than 72.94% of its industry peers.
A Quick Ratio of 1.09 indicates that DXC should not have too much problems paying its short term obligations.
DXC's Quick ratio of 1.09 is on the low side compared to the rest of the industry. DXC is outperformed by 71.76% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.09 | ||
| Quick Ratio | 1.09 |
3. Growth
3.1 Past
The earnings per share for DXC have decreased by -6.55% in the last year.
DXC shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -9.24% yearly.
DXC shows a decrease in Revenue. In the last year, the revenue decreased by -4.13%.
The Revenue has been decreasing by -8.05% on average over the past years.
EPS 1Y (TTM)-6.55%
EPS 3Y-0.58%
EPS 5Y-9.24%
EPS Q2Q%-9.68%
Revenue 1Y (TTM)-4.13%
Revenue growth 3Y-7.5%
Revenue growth 5Y-8.05%
Sales Q2Q%-2.47%
3.2 Future
DXC is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 1.81% yearly.
DXC is expected to show a decrease in Revenue. In the coming years, the Revenue will decrease by -1.44% yearly.
EPS Next Y-7.9%
EPS Next 2Y-3.78%
EPS Next 3Y1.81%
EPS Next 5YN/A
Revenue Next Year-1.13%
Revenue Next 2Y-1.85%
Revenue Next 3Y-1.44%
Revenue Next 5YN/A
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 4.02 indicates a rather cheap valuation of DXC.
Compared to the rest of the industry, the Price/Earnings ratio of DXC indicates a rather cheap valuation: DXC is cheaper than 96.47% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 26.31. DXC is valued rather cheaply when compared to this.
Based on the Price/Forward Earnings ratio of 4.16, the valuation of DXC can be described as very cheap.
Based on the Price/Forward Earnings ratio, DXC is valued cheaper than 96.47% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 36.59. DXC is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 4.02 | ||
| Fwd PE | 4.16 |
4.2 Price Multiples
DXC's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. DXC is cheaper than 98.82% of the companies in the same industry.
98.82% of the companies in the same industry are more expensive than DXC, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 2.46 | ||
| EV/EBITDA | 1.72 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-3.78%
EPS Next 3Y1.81%
5. Dividend
5.1 Amount
DXC does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
13.2
+0.09 (+0.69%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners93.03%
Inst Owner Change0.41%
Ins Owners1.17%
Ins Owner Change0.75%
Market Cap2.30B
Revenue(TTM)12.71B
Net Income(TTM)373.00M
Analysts50
Price Target16.08 (21.82%)
Short Float %6.43%
Short Ratio5.74
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DP0%
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)13.99%
Min EPS beat(2)8.59%
Max EPS beat(2)19.38%
EPS beat(4)4
Avg EPS beat(4)13.44%
Min EPS beat(4)7.63%
Max EPS beat(4)19.38%
EPS beat(8)8
Avg EPS beat(8)17.01%
EPS beat(12)10
Avg EPS beat(12)10.51%
EPS beat(16)11
Avg EPS beat(16)6.35%
Revenue beat(2)1
Avg Revenue beat(2)0.01%
Min Revenue beat(2)-1.16%
Max Revenue beat(2)1.19%
Revenue beat(4)2
Avg Revenue beat(4)-0.39%
Min Revenue beat(4)-1.74%
Max Revenue beat(4)1.19%
Revenue beat(8)5
Avg Revenue beat(8)0.05%
Revenue beat(12)5
Avg Revenue beat(12)-0.62%
Revenue beat(16)5
Avg Revenue beat(16)-0.89%
PT rev (1m)-3.41%
PT rev (3m)-5.68%
EPS NQ rev (1m)-4.74%
EPS NQ rev (3m)-4.74%
EPS NY rev (1m)0.97%
EPS NY rev (3m)1.04%
Revenue NQ rev (1m)-0.5%
Revenue NQ rev (3m)-0.56%
Revenue NY rev (1m)-0.24%
Revenue NY rev (3m)-0.24%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 4.02 | ||
| Fwd PE | 4.16 | ||
| P/S | 0.18 | ||
| P/FCF | 2.46 | ||
| P/OCF | 1.47 | ||
| P/B | 0.75 | ||
| P/tB | 3.41 | ||
| EV/EBITDA | 1.72 |
EPS(TTM)3.28
EY24.85%
EPS(NY)3.18
Fwd EY24.06%
FCF(TTM)5.36
FCFY40.63%
OCF(TTM)8.98
OCFY68%
SpS73.01
BVpS17.64
TBVpS3.88
PEG (NY)N/A
PEG (5Y)N/A
Graham Number36.08
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.75% | ||
| ROE | 12.15% | ||
| ROCE | 5.2% | ||
| ROIC | 2.72% | ||
| ROICexc | 3.35% | ||
| ROICexgc | 4.75% | ||
| OM | 3.51% | ||
| PM (TTM) | 2.93% | ||
| GM | 24.59% | ||
| FCFM | 7.35% |
ROA(3y)0.01%
ROA(5y)0.58%
ROE(3y)-0.32%
ROE(5y)2.05%
ROIC(3y)2.61%
ROIC(5y)N/A
ROICexc(3y)3.12%
ROICexc(5y)N/A
ROICexgc(3y)4.53%
ROICexgc(5y)N/A
ROCE(3y)4.4%
ROCE(5y)N/A
ROICexgc growth 3Y8.66%
ROICexgc growth 5Y-17.32%
ROICexc growth 3Y13.16%
ROICexc growth 5Y-10.47%
OM growth 3Y8.71%
OM growth 5Y-14.76%
PM growth 3Y-11.86%
PM growth 5YN/A
GM growth 3Y3.04%
GM growth 5Y0.17%
F-Score7
Asset Turnover0.94
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.25 | ||
| Debt/FCF | 4.26 | ||
| Debt/EBITDA | 2.25 | ||
| Cap/Depr | 50.08% | ||
| Cap/Sales | 4.95% | ||
| Interest Coverage | 2 | ||
| Cash Conversion | 91.83% | ||
| Profit Quality | 250.4% | ||
| Current Ratio | 1.09 | ||
| Quick Ratio | 1.09 | ||
| Altman-Z | 0.89 |
F-Score7
WACC7.52%
ROIC/WACC0.36
Cap/Depr(3y)46.69%
Cap/Depr(5y)44.53%
Cap/Sales(3y)4.88%
Cap/Sales(5y)4.74%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-6.55%
EPS 3Y-0.58%
EPS 5Y-9.24%
EPS Q2Q%-9.68%
EPS Next Y-7.9%
EPS Next 2Y-3.78%
EPS Next 3Y1.81%
EPS Next 5YN/A
Revenue 1Y (TTM)-4.13%
Revenue growth 3Y-7.5%
Revenue growth 5Y-8.05%
Sales Q2Q%-2.47%
Revenue Next Year-1.13%
Revenue Next 2Y-1.85%
Revenue Next 3Y-1.44%
Revenue Next 5YN/A
EBIT growth 1Y-13.06%
EBIT growth 3Y0.55%
EBIT growth 5Y-21.62%
EBIT Next Year80.51%
EBIT Next 3Y20.6%
EBIT Next 5YN/A
FCF growth 1Y24.87%
FCF growth 3Y-4.75%
FCF growth 5Y-14.28%
OCF growth 1Y10.46%
OCF growth 3Y-3.44%
OCF growth 5Y-9.87%
DXC TECHNOLOGY CO / DXC FAQ
What is the ChartMill fundamental rating of DXC TECHNOLOGY CO (DXC) stock?
ChartMill assigns a fundamental rating of 3 / 10 to DXC.
Can you provide the valuation status for DXC TECHNOLOGY CO?
ChartMill assigns a valuation rating of 7 / 10 to DXC TECHNOLOGY CO (DXC). This can be considered as Undervalued.
What is the profitability of DXC stock?
DXC TECHNOLOGY CO (DXC) has a profitability rating of 4 / 10.
What is the valuation of DXC TECHNOLOGY CO based on its PE and PB ratios?
The Price/Earnings (PE) ratio for DXC TECHNOLOGY CO (DXC) is 4.02 and the Price/Book (PB) ratio is 0.75.
How financially healthy is DXC TECHNOLOGY CO?
The financial health rating of DXC TECHNOLOGY CO (DXC) is 3 / 10.