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 81 industry peers in the IT Services industry. DXC may be in some trouble as it scores bad on both profitability and 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.
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.
Each year in the past 5 years DXC had a positive operating cash flow.
1.2 Ratios
DXC has a Return On Assets of -0.58%. This is comparable to the rest of the industry: DXC outperforms 44.44% of its industry peers.
Looking at the Return On Equity, with a value of -2.51%, DXC is in line with its industry, outperforming 46.91% of the companies in the same industry.
DXC has a Return On Invested Capital of 3.54%. This is comparable to the rest of the industry: DXC outperforms 56.79% of its industry peers.
The Average Return On Invested Capital over the past 3 years for DXC is significantly below the industry average of 10.72%.
The last Return On Invested Capital (3.54%) for DXC is above the 3 year average (2.21%), which is a sign of increasing profitability.
| 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.
With a Operating Margin value of 4.19%, DXC perfoms like the industry average, outperforming 56.79% of the companies in the same industry.
In the last couple of years the Operating Margin of DXC has declined.
The Gross Margin of DXC (23.92%) is worse than 66.67% of its industry peers.
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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so DXC is destroying value.
Compared to 1 year ago, DXC has less shares outstanding
Compared to 5 years ago, DXC has less shares outstanding
DXC has a worse debt/assets ratio than last year.
2.2 Solvency
Based on the Altman-Z score of 1.02, we must say that DXC is in the distress zone and has some risk of bankruptcy.
DXC has a Altman-Z score of 1.02. This is in the lower half of the industry: DXC underperforms 65.43% 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.
Looking at the Debt to FCF ratio, with a value of 5.24, DXC is in line with its industry, outperforming 50.62% of the companies in the same industry.
DXC has a Debt/Equity ratio of 1.22. This is a high value indicating a heavy dependency on external financing.
DXC has a worse Debt to Equity ratio (1.22) than 67.90% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.22 | ||
| Debt/FCF | 5.24 | ||
| Altman-Z | 1.02 |
ROIC/WACC0.45
WACC7.81%
2.3 Liquidity
A Current Ratio of 1.34 indicates that DXC should not have too much problems paying its short term obligations.
DXC's Current ratio of 1.34 is on the low side compared to the rest of the industry. DXC is outperformed by 62.96% 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 has a Quick ratio of 1.34. This is in the lower half of the industry: DXC underperforms 60.49% 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.
DXC shows a decrease in Revenue. In the last year, the revenue decreased by -5.65%.
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 4.69% on average over the next years.
DXC is expected to show a decrease in Revenue. In the coming years, the Revenue will decrease by -3.51% yearly.
EPS Next Y6.68%
EPS Next 2Y4.28%
EPS Next 3Y3.54%
EPS Next 5Y4.69%
Revenue Next Year-5.98%
Revenue Next 2Y-4.89%
Revenue Next 3Y-3.87%
Revenue Next 5Y-3.51%
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
DXC is valuated cheaply with a Price/Earnings ratio of 4.03.
Compared to the rest of the industry, the Price/Earnings ratio of DXC indicates a rather cheap valuation: DXC is cheaper than 98.77% of the companies listed in the same industry.
DXC is valuated cheaply when we compare the Price/Earnings ratio to 28.29, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 4.17, the valuation of DXC can be described as very cheap.
97.53% of the companies in the same industry are more expensive than DXC, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 21.32. DXC is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 4.03 | ||
| Fwd PE | 4.17 |
4.2 Price Multiples
DXC's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. DXC is cheaper than 95.06% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of DXC indicates a rather cheap valuation: DXC is cheaper than 97.53% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 3.56 | ||
| EV/EBITDA | 2.48 |
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)0.6
PEG (5Y)N/A
EPS Next 2Y4.28%
EPS Next 3Y3.54%
5. Dividend
5.1 Amount
No dividends for DXC!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
14.36
-0.28 (-1.91%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners95.6%
Inst Owner Change0.34%
Ins Owners0.64%
Ins Owner Change-1.96%
Market Cap2.60B
Analysts50
Price Target22.95 (59.82%)
Short Float %4.26%
Short Ratio6.77
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)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)-1.59%
PT rev (3m)2.48%
EPS NQ rev (1m)0.23%
EPS NQ rev (3m)3.2%
EPS NY rev (1m)0.03%
EPS NY rev (3m)5.47%
Revenue NQ rev (1m)0.03%
Revenue NQ rev (3m)-3.95%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-1.18%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 4.03 | ||
| Fwd PE | 4.17 | ||
| P/S | 0.2 | ||
| P/FCF | 3.56 | ||
| P/OCF | 1.91 | ||
| P/B | 0.87 | ||
| P/tB | 3.79 | ||
| EV/EBITDA | 2.48 |
EPS(TTM)3.56
EY24.79%
EPS(NY)3.45
Fwd EY24%
FCF(TTM)4.04
FCFY28.12%
OCF(TTM)7.53
OCFY52.43%
SpS72.29
BVpS16.51
TBVpS3.79
PEG (NY)0.6
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 | 1.02 |
F-Score7
WACC7.81%
ROIC/WACC0.45
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 Y6.68%
EPS Next 2Y4.28%
EPS Next 3Y3.54%
EPS Next 5Y4.69%
Revenue 1Y (TTM)-5.65%
Revenue growth 3Y-8.31%
Revenue growth 5Y-8.01%
Sales Q2Q%-5.12%
Revenue Next Year-5.98%
Revenue Next 2Y-4.89%
Revenue Next 3Y-3.87%
Revenue Next 5Y-3.51%
EBIT growth 1Y161.96%
EBIT growth 3YN/A
EBIT growth 5Y-29.77%
EBIT Next Year108.47%
EBIT Next 3Y24.91%
EBIT Next 5Y18.12%
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%