DXC TECHNOLOGY CO (DXC) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:DXC - US23355L1061 - Common Stock
15.38 USD
+0.32 (+2.12%)
15.35 USD
-0.03 (-0.2%)
Taking everything into account, DXC scores 3 out of 10 in our fundamental rating. DXC was compared to 88 industry peers in the IT Services industry. There are concerns on the financial health of DXC while its profitability can be described as average. DXC has a bad growth rate and is valued cheaply.
1. Profitability
1.1 Basic Checks
DXC had positive earnings in the past year.
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.
DXC had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
DXC's Return On Assets of 2.75% is in line compared to the rest of the industry. DXC outperforms 56.82% of its industry peers.
DXC's Return On Equity of 12.15% is fine compared to the rest of the industry. DXC outperforms 72.73% of its industry peers.
Looking at the Return On Invested Capital, with a value of 2.72%, DXC is in line with its industry, outperforming 54.55% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for DXC is significantly below the industry average of 28.99%.
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's Profit Margin of 2.93% is in line compared to the rest of the industry. DXC outperforms 55.68% 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.
In the last couple of years the Operating Margin of DXC has declined.
DXC's Gross Margin of 24.59% is on the low side compared to the rest of the industry. DXC is outperformed by 70.45% 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
DXC has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
DXC has more shares outstanding than it did 1 year ago.
Compared to 5 years ago, DXC has less shares outstanding
DXC has a better debt/assets ratio than last year.
2.2 Solvency
DXC has an Altman-Z score of 0.91. This is a bad value and indicates that DXC is not financially healthy and even has some risk of bankruptcy.
With a Altman-Z score value of 0.91, DXC is not doing good in the industry: 67.05% of the companies in the same industry are doing better.
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's Debt to FCF ratio of 4.26 is in line compared to the rest of the industry. DXC outperforms 55.68% of its industry peers.
A Debt/Equity ratio of 1.25 is on the high side and indicates that DXC has dependencies on debt financing.
The Debt to Equity ratio of DXC (1.25) is worse than 68.18% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.25 | ||
| Debt/FCF | 4.26 | ||
| Altman-Z | 0.91 |
ROIC/WACC0.35
WACC7.82%
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.
DXC's Current ratio of 1.09 is on the low side compared to the rest of the industry. DXC is outperformed by 72.73% of its industry peers.
DXC has a Quick 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.
DXC's Quick ratio of 1.09 is on the low side compared to the rest of the industry. DXC is outperformed by 72.73% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.09 | ||
| Quick Ratio | 1.09 |
3. Growth
3.1 Past
DXC shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -6.55%.
The Earnings Per Share has been decreasing by -9.24% on average over the past years.
The Revenue has decreased by -4.13% in the past year.
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
Based on estimates for the next years, DXC will show a decrease in Earnings Per Share. The EPS will decrease by -0.18% on average per year.
The Revenue is expected to decrease by -1.46% on average over the next years.
EPS Next Y-7.9%
EPS Next 2Y-3.78%
EPS Next 3Y-0.18%
EPS Next 5YN/A
Revenue Next Year-1.18%
Revenue Next 2Y-1.87%
Revenue Next 3Y-1.46%
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.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 4.69, the valuation of DXC can be described as very cheap.
Based on the Price/Earnings ratio, DXC is valued cheaply inside the industry as 95.45% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 27.19, DXC is valued rather cheaply.
Based on the Price/Forward Earnings ratio of 4.84, the valuation of DXC can be described as very cheap.
DXC's Price/Forward Earnings ratio is rather cheap when compared to the industry. DXC is cheaper than 97.73% of the companies in the same industry.
DXC is valuated cheaply when we compare the Price/Forward Earnings ratio to 23.92, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 4.69 | ||
| Fwd PE | 4.84 |
4.2 Price Multiples
98.86% of the companies in the same industry are more expensive than DXC, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, DXC is valued cheaply inside the industry as 98.86% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 2.87 | ||
| EV/EBITDA | 1.94 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-3.78%
EPS Next 3Y-0.18%
5. Dividend
5.1 Amount
DXC does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0% |
15.38
+0.32 (+2.12%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners96.52%
Inst Owner Change1.35%
Ins Owners1.2%
Ins Owner Change0.75%
Market Cap2.68B
Revenue(TTM)12.71B
Net Income(TTM)373.00M
Analysts50
Price Target16.08 (4.55%)
Short Float %6.14%
Short Ratio4.87
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0% |
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)0%
PT rev (3m)-3.41%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-4.74%
EPS NY rev (1m)0%
EPS NY rev (3m)1.04%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.56%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.3%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 4.69 | ||
| Fwd PE | 4.84 | ||
| P/S | 0.21 | ||
| P/FCF | 2.87 | ||
| P/OCF | 1.71 | ||
| P/B | 0.87 | ||
| P/tB | 3.97 | ||
| EV/EBITDA | 1.94 |
EPS(TTM)3.28
EY21.33%
EPS(NY)3.18
Fwd EY20.65%
FCF(TTM)5.36
FCFY34.88%
OCF(TTM)8.98
OCFY58.36%
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 | 0.91 |
F-Score7
WACC7.82%
ROIC/WACC0.35
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 3Y-0.18%
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-1.18%
Revenue Next 2Y-1.87%
Revenue Next 3Y-1.46%
Revenue Next 5YN/A
EBIT growth 1Y-13.06%
EBIT growth 3Y0.55%
EBIT growth 5Y-21.62%
EBIT Next Year80.41%
EBIT Next 3Y20.14%
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.
What is the valuation status of DXC TECHNOLOGY CO (DXC) stock?
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.
Can you provide the PE and PB ratios for DXC stock?
The Price/Earnings (PE) ratio for DXC TECHNOLOGY CO (DXC) is 4.69 and the Price/Book (PB) ratio is 0.87.
What is the expected EPS growth for DXC TECHNOLOGY CO (DXC) stock?
The Earnings per Share (EPS) of DXC TECHNOLOGY CO (DXC) is expected to decline by -7.9% in the next year.