DXC TECHNOLOGY CO (DXC) Stock Fundamental Analysis
USA - NYSE:DXC - US23355L1061 - Common Stock
14.02 USD
-0.53 (-3.64%)
14.61 USD
+0.59 (+4.21%)
Taking everything into account, DXC scores 3 out of 10 in our fundamental rating. DXC was compared to 85 industry peers in the IT Services industry. DXC has a medium profitability rating, but doesn't score so well on its financial health evaluation. 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.
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 of 2.82%. This is comparable to the rest of the industry: DXC outperforms 57.65% of its industry peers.
The Return On Equity of DXC (11.96%) is better than 72.94% of its industry peers.
DXC has a Return On Invested Capital of 3.00%. This is comparable to the rest of the industry: DXC outperforms 51.76% of its industry peers.
The Average Return On Invested Capital over the past 3 years for DXC is significantly below the industry average of 21.77%.
The 3 year average ROIC (2.61%) for DXC is below the current ROIC(3.00%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.82% | ||
| ROE | 11.96% | ||
| ROIC | 3% |
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
The Profit Margin of DXC (2.96%) is comparable to the rest of the industry.
In the last couple of years the Profit Margin of DXC has declined.
DXC has a Operating Margin (3.71%) which is comparable to the rest of the industry.
In the last couple of years the Operating Margin of DXC has declined.
DXC has a Gross Margin of 24.71%. This is in the lower half of the industry: DXC underperforms 71.76% of its industry peers.
In the last couple of years the Gross Margin of DXC has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 3.71% | ||
| PM (TTM) | 2.96% | ||
| GM | 24.71% |
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
Based on the Altman-Z score of 0.96, we must say that DXC is in the distress zone and has some risk of bankruptcy.
DXC's Altman-Z score of 0.96 is on the low side compared to the rest of the industry. DXC is outperformed by 71.76% of its industry peers.
DXC has a debt to FCF ratio of 5.45. This is a neutral value as DXC would need 5.45 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 5.45, DXC is in line with its industry, outperforming 56.47% of the companies in the same industry.
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 72.94% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.22 | ||
| Debt/FCF | 5.45 | ||
| Altman-Z | 0.96 |
ROIC/WACC0.39
WACC7.72%
2.3 Liquidity
DXC has a Current Ratio of 1.22. 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 (1.22) is worse than 70.59% of its industry peers.
DXC has a Quick Ratio of 1.22. This is a normal value and indicates that DXC is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 1.22, DXC is doing worse than 69.41% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.22 | ||
| Quick Ratio | 1.22 |
3. Growth
3.1 Past
DXC shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 2.74%.
Measured over the past years, DXC shows a decrease in Earnings Per Share. The EPS has been decreasing by -9.24% on average per year.
DXC shows a decrease in Revenue. In the last year, the revenue decreased by -4.93%.
DXC shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -8.05% yearly.
EPS 1Y (TTM)2.74%
EPS 3Y-0.58%
EPS 5Y-9.24%
EPS Q2Q%-8.11%
Revenue 1Y (TTM)-4.93%
Revenue growth 3Y-7.5%
Revenue growth 5Y-8.05%
Sales Q2Q%-2.38%
3.2 Future
DXC is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 1.93% yearly.
DXC is expected to show a decrease in Revenue. In the coming years, the Revenue will decrease by -1.52% yearly.
EPS Next Y-8.85%
EPS Next 2Y-3.81%
EPS Next 3Y1.93%
EPS Next 5YN/A
Revenue Next Year-0.89%
Revenue Next 2Y-1.74%
Revenue Next 3Y-1.52%
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
DXC is valuated cheaply with a Price/Earnings ratio of 4.16.
Based on the Price/Earnings ratio, DXC is valued cheaply inside the industry as 97.65% of the companies are valued more expensively.
The average S&P500 Price/Earnings ratio is at 27.30. DXC is valued rather cheaply when compared to this.
The Price/Forward Earnings ratio is 4.42, which indicates a rather cheap valuation of DXC.
96.47% 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 22.73. DXC is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 4.16 | ||
| Fwd PE | 4.42 |
4.2 Price Multiples
98.82% 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 100.00% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 3.4 | ||
| EV/EBITDA | 2.31 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-3.81%
EPS Next 3Y1.93%
5. Dividend
5.1 Amount
DXC does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
14.02
-0.53 (-3.64%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners91.39%
Inst Owner Change-0.1%
Ins Owners0.84%
Ins Owner Change14.42%
Market Cap2.51B
Analysts50
Price Target16.64 (18.69%)
Short Float %5.31%
Short Ratio5.05
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)8.11%
Min EPS beat(2)7.63%
Max EPS beat(2)8.59%
EPS beat(4)4
Avg EPS beat(4)15.61%
Min EPS beat(4)7.63%
Max EPS beat(4)28.05%
EPS beat(8)8
Avg EPS beat(8)14.95%
EPS beat(12)10
Avg EPS beat(12)9.02%
EPS beat(16)11
Avg EPS beat(16)5.54%
Revenue beat(2)2
Avg Revenue beat(2)0.67%
Min Revenue beat(2)0.16%
Max Revenue beat(2)1.19%
Revenue beat(4)3
Avg Revenue beat(4)-0.03%
Min Revenue beat(4)-1.74%
Max Revenue beat(4)1.19%
Revenue beat(8)5
Avg Revenue beat(8)0.07%
Revenue beat(12)5
Avg Revenue beat(12)-0.57%
Revenue beat(16)5
Avg Revenue beat(16)-1.01%
PT rev (1m)-0.66%
PT rev (3m)-6.9%
EPS NQ rev (1m)-2.49%
EPS NQ rev (3m)-22.8%
EPS NY rev (1m)3.15%
EPS NY rev (3m)1.95%
Revenue NQ rev (1m)0.03%
Revenue NQ rev (3m)1.98%
Revenue NY rev (1m)2.49%
Revenue NY rev (3m)3.57%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 4.16 | ||
| Fwd PE | 4.42 | ||
| P/S | 0.2 | ||
| P/FCF | 3.4 | ||
| P/OCF | 1.86 | ||
| P/B | 0.79 | ||
| P/tB | 2.23 | ||
| EV/EBITDA | 2.31 |
EPS(TTM)3.37
EY24.04%
EPS(NY)3.17
Fwd EY22.64%
FCF(TTM)4.13
FCFY29.45%
OCF(TTM)7.52
OCFY53.63%
SpS71.47
BVpS17.7
TBVpS6.28
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.82% | ||
| ROE | 11.96% | ||
| ROCE | 5.31% | ||
| ROIC | 3% | ||
| ROICexc | 3.68% | ||
| ROICexgc | 4.96% | ||
| OM | 3.71% | ||
| PM (TTM) | 2.96% | ||
| GM | 24.71% | ||
| FCFM | 5.78% |
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
ROICexcg growth 3Y8.66%
ROICexcg 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-Score8
Asset Turnover0.95
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.22 | ||
| Debt/FCF | 5.45 | ||
| Debt/EBITDA | 2.19 | ||
| Cap/Depr | 47.09% | ||
| Cap/Sales | 4.74% | ||
| Interest Coverage | 1.97 | ||
| Cash Conversion | 76.3% | ||
| Profit Quality | 194.99% | ||
| Current Ratio | 1.22 | ||
| Quick Ratio | 1.22 | ||
| Altman-Z | 0.96 |
F-Score8
WACC7.72%
ROIC/WACC0.39
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)2.74%
EPS 3Y-0.58%
EPS 5Y-9.24%
EPS Q2Q%-8.11%
EPS Next Y-8.85%
EPS Next 2Y-3.81%
EPS Next 3Y1.93%
EPS Next 5YN/A
Revenue 1Y (TTM)-4.93%
Revenue growth 3Y-7.5%
Revenue growth 5Y-8.05%
Sales Q2Q%-2.38%
Revenue Next Year-0.89%
Revenue Next 2Y-1.74%
Revenue Next 3Y-1.52%
Revenue Next 5YN/A
EBIT growth 1Y-13.95%
EBIT growth 3Y0.55%
EBIT growth 5Y-21.62%
EBIT Next Year80.51%
EBIT Next 3Y20.55%
EBIT Next 5YN/A
FCF growth 1Y9.64%
FCF growth 3Y-4.75%
FCF growth 5Y-14.28%
OCF growth 1Y-2.39%
OCF growth 3Y-3.44%
OCF growth 5Y-9.87%