DXC TECHNOLOGY CO (DXC) Stock Fundamental Analysis
NYSE:DXC - New York Stock Exchange, Inc. - US23355L1061 - Common Stock - Currency: USD
DXC gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 82 industry peers in the IT Services industry. Both the profitability and financial health of DXC have multiple concerns. DXC is valued quite cheap, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
DXC had positive earnings in the past year.
In the past year DXC had a positive cash flow from operations.
In multiple years DXC reported negative net income over the last 5 years.
In the past 5 years DXC always reported a positive cash flow from operatings.
1.2 Ratios
DXC has a Return On Assets (-0.58%) which is in line with its industry peers.
DXC has a Return On Equity (-2.51%) which is comparable to the rest of the industry.
DXC's Return On Invested Capital of 3.54% is in line compared to the rest of the industry. DXC outperforms 56.41% of its industry peers.
The Average Return On Invested Capital over the past 3 years for DXC is significantly below the industry average of 10.13%.
The 3 year average ROIC (2.21%) for DXC is below the current ROIC(3.54%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -0.58% | ||
| ROE | -2.51% | ||
| ROIC | 3.54% |
ROA(3y)0.21%
ROA(5y)-4.14%
ROE(3y)0.4%
ROE(5y)-22.8%
ROIC(3y)2.21%
ROIC(5y)N/A
1.3 Margins
In the last couple of years the Profit Margin of DXC has declined.
DXC's Operating Margin of 4.19% is in line compared to the rest of the industry. DXC outperforms 56.41% of its industry peers.
In the last couple of years the Operating Margin of DXC has declined.
With a Gross Margin value of 23.92%, DXC is not doing good in the industry: 69.23% of the companies in the same industry are doing better.
In the last couple of years the Gross Margin of DXC has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 4.19% | ||
| PM (TTM) | N/A | ||
| GM | 23.92% |
OM growth 3YN/A
OM growth 5Y-23.65%
PM growth 3YN/A
PM growth 5Y-35.7%
GM growth 3Y3.25%
GM growth 5Y-4.17%
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.
Compared to 1 year ago, DXC has less shares outstanding
The number of shares outstanding for DXC has been reduced compared to 5 years ago.
DXC has a worse debt/assets ratio than last year.
2.2 Solvency
Based on the Altman-Z score of 1.08, we must say that DXC is in the distress zone and has some risk of bankruptcy.
DXC has a worse Altman-Z score (1.08) than 67.95% of its industry peers.
DXC has a debt to FCF ratio of 5.24. This is a neutral value as DXC would need 5.24 years to pay back of all of its debts.
DXC has a Debt to FCF ratio of 5.24. This is comparable to the rest of the industry: DXC outperforms 47.44% of its industry peers.
A Debt/Equity ratio of 1.22 is on the high side and indicates that DXC has dependencies on debt financing.
The Debt to Equity ratio of DXC (1.22) is worse than 70.51% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.22 | ||
| Debt/FCF | 5.24 | ||
| Altman-Z | 1.08 |
ROIC/WACC0.39
WACC9.03%
2.3 Liquidity
DXC has a Current Ratio of 1.34. This is a normal value and indicates that DXC is financially healthy and should not expect problems in meeting its short term obligations.
DXC has a worse Current ratio (1.34) than 64.10% of its industry peers.
DXC has a Quick Ratio of 1.34. 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 1.34 is on the low side compared to the rest of the industry. DXC is outperformed by 62.82% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.34 | ||
| Quick Ratio | 1.34 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 10.56% over the past year.
DXC shows a very negative growth in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -17.65% yearly.
Looking at the last year, DXC shows a decrease in Revenue. The Revenue has decreased by -5.65% in the last year.
The Revenue has been decreasing by -8.01% on average over the past years.
EPS 1Y (TTM)10.56%
EPS 3Y9.27%
EPS 5Y-17.65%
EPS Q2Q%5.75%
Revenue 1Y (TTM)-5.65%
Revenue growth 3Y-8.31%
Revenue growth 5Y-8.01%
Sales Q2Q%-5.12%
3.2 Future
The Earnings Per Share is expected to grow by 3.67% on average over the next years.
The Revenue is expected to decrease by -2.76% on average over the next years.
EPS Next Y6.65%
EPS Next 2Y4.36%
EPS Next 3Y3.67%
EPS Next 5YN/A
Revenue Next Year-5.09%
Revenue Next 2Y-3.8%
Revenue Next 3Y-2.76%
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
With a Price/Earnings ratio of 5.49, the valuation of DXC can be described as very cheap.
DXC's Price/Earnings ratio is rather cheap when compared to the industry. DXC is cheaper than 96.15% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 29.63. DXC is valued rather cheaply when compared to this.
The Price/Forward Earnings ratio is 5.67, which indicates a rather cheap valuation of DXC.
DXC's Price/Forward Earnings ratio is rather cheap when compared to the industry. DXC is cheaper than 96.15% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 22.68. DXC is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 5.49 | ||
| Fwd PE | 5.67 |
4.2 Price Multiples
DXC's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. DXC is cheaper than 96.15% of the companies in the same industry.
97.44% 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 | 4.84 | ||
| EV/EBITDA | 3.03 |
4.3 Compensation for Growth
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
PEG (NY)0.83
PEG (5Y)N/A
EPS Next 2Y4.36%
EPS Next 3Y3.67%
5. Dividend
5.1 Amount
DXC does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
19.56
-0.61 (-3.02%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners99.75%
Inst Owner Change-1.79%
Ins Owners0.76%
Ins Owner Change-1.34%
Market Cap3.54B
Analysts48.89
Price Target22.3 (14.01%)
Short Float %3.6%
Short Ratio6.24
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly Dividend0
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)23.1%
Min EPS beat(2)18.16%
Max EPS beat(2)28.05%
EPS beat(4)4
Avg EPS beat(4)22.22%
Min EPS beat(4)15.96%
Max EPS beat(4)28.05%
EPS beat(8)6
Avg EPS beat(8)9.7%
EPS beat(12)8
Avg EPS beat(12)5.53%
EPS beat(16)11
Avg EPS beat(16)5.54%
Revenue beat(2)1
Avg Revenue beat(2)-0.73%
Min Revenue beat(2)-1.74%
Max Revenue beat(2)0.28%
Revenue beat(4)2
Avg Revenue beat(4)0.04%
Min Revenue beat(4)-1.74%
Max Revenue beat(4)2.02%
Revenue beat(8)3
Avg Revenue beat(8)-0.83%
Revenue beat(12)3
Avg Revenue beat(12)-1.11%
Revenue beat(16)4
Avg Revenue beat(16)-1.03%
PT rev (1m)-0.41%
PT rev (3m)10.58%
EPS NQ rev (1m)2.96%
EPS NQ rev (3m)-0.23%
EPS NY rev (1m)5.44%
EPS NY rev (3m)16.74%
Revenue NQ rev (1m)-3.98%
Revenue NQ rev (3m)-3.69%
Revenue NY rev (1m)-0.24%
Revenue NY rev (3m)0.61%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 5.49 | ||
| Fwd PE | 5.67 | ||
| P/S | 0.27 | ||
| P/FCF | 4.84 | ||
| P/OCF | 2.6 | ||
| P/B | 1.18 | ||
| P/tB | 5.16 | ||
| EV/EBITDA | 3.03 |
EPS(TTM)3.56
EY18.2%
EPS(NY)3.45
Fwd EY17.65%
FCF(TTM)4.04
FCFY20.64%
OCF(TTM)7.53
OCFY38.49%
SpS72.29
BVpS16.51
TBVpS3.79
PEG (NY)0.83
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -0.58% | ||
| ROE | -2.51% | ||
| ROCE | 5.94% | ||
| ROIC | 3.54% | ||
| ROICexc | 4.35% | ||
| ROICexgc | 6.27% | ||
| OM | 4.19% | ||
| PM (TTM) | N/A | ||
| GM | 23.92% | ||
| FCFM | 5.59% |
ROA(3y)0.21%
ROA(5y)-4.14%
ROE(3y)0.4%
ROE(5y)-22.8%
ROIC(3y)2.21%
ROIC(5y)N/A
ROICexc(3y)2.64%
ROICexc(5y)N/A
ROICexgc(3y)4.02%
ROICexgc(5y)N/A
ROCE(3y)3.75%
ROCE(5y)N/A
ROICexcg growth 3YN/A
ROICexcg growth 5Y-33.14%
ROICexc growth 3YN/A
ROICexc growth 5Y-17.99%
OM growth 3YN/A
OM growth 5Y-23.65%
PM growth 3YN/A
PM growth 5Y-35.7%
GM growth 3Y3.25%
GM growth 5Y-4.17%
F-Score7
Asset Turnover1
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.22 | ||
| Debt/FCF | 5.24 | ||
| Debt/EBITDA | 1.91 | ||
| Cap/Depr | 46.75% | ||
| Cap/Sales | 4.83% | ||
| Interest Coverage | 1.97 | ||
| Cash Conversion | 71.7% | ||
| Profit Quality | N/A | ||
| Current Ratio | 1.34 | ||
| Quick Ratio | 1.34 | ||
| Altman-Z | 1.08 |
F-Score7
WACC9.03%
ROIC/WACC0.39
Cap/Depr(3y)43.15%
Cap/Depr(5y)42.53%
Cap/Sales(3y)4.6%
Cap/Sales(5y)4.52%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)10.56%
EPS 3Y9.27%
EPS 5Y-17.65%
EPS Q2Q%5.75%
EPS Next Y6.65%
EPS Next 2Y4.36%
EPS Next 3Y3.67%
EPS Next 5YN/A
Revenue 1Y (TTM)-5.65%
Revenue growth 3Y-8.31%
Revenue growth 5Y-8.01%
Sales Q2Q%-5.12%
Revenue Next Year-5.09%
Revenue Next 2Y-3.8%
Revenue Next 3Y-2.76%
Revenue Next 5YN/A
EBIT growth 1Y161.96%
EBIT growth 3YN/A
EBIT growth 5Y-29.77%
EBIT Next Year103.52%
EBIT Next 3Y26.09%
EBIT Next 5YN/A
FCF growth 1Y1205.36%
FCF growth 3YN/A
FCF growth 5Y-1.87%
OCF growth 1Y77.94%
OCF growth 3Y181.52%
OCF growth 5Y-5.26%