DXC TECHNOLOGY CO (DXC) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:DXC - US23355L1061 - Common Stock
15 USD
-0.24 (-1.57%)
14.98 USD
-0.02 (-0.13%)
We assign a fundamental rating of 3 out of 10 to DXC. DXC was compared to 88 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 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.
- 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
- DXC has a Return On Assets of 2.75%. This is comparable to the rest of the industry: DXC outperforms 56.82% of its industry peers.
- DXC has a Return On Equity of 12.15%. This is in the better half of the industry: DXC outperforms 72.73% of its industry peers.
- With a Return On Invested Capital value of 2.72%, DXC perfoms like the industry average, 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 29.06%.
- The 3 year average ROIC (2.61%) for DXC is below the current ROIC(2.72%), indicating increased profibility in the last year.
| 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 (2.93%) which is in line with 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.
- Looking at the Gross Margin, with a value of 24.59%, DXC is doing worse than 70.45% of the companies in the same industry.
- 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
- The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so DXC is destroying value.
- DXC has more shares outstanding than it did 1 year ago.
- DXC has less shares outstanding than it did 5 years ago.
- The debt/assets ratio for DXC has been reduced compared to a year ago.
2.2 Solvency
- DXC has an Altman-Z score of 0.91. This is a bad value and indicates that DXC is not financially healthy and even has some risk of bankruptcy.
- Looking at the Altman-Z score, with a value of 0.91, DXC is doing worse than 68.18% of the companies in the same industry.
- 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 (4.26) which is comparable to the rest of the industry.
- A Debt/Equity ratio of 1.25 is on the high side and indicates that DXC has dependencies on debt financing.
- DXC has a worse Debt to Equity ratio (1.25) 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
WACC7.75%
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.
- With a Current ratio value of 1.09, DXC is not doing good in the industry: 72.73% of the companies in the same industry are doing better.
- 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 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.
- Looking at the last year, DXC shows a decrease in Revenue. The Revenue has decreased by -4.13% in the last year.
- Measured over the past years, DXC shows a decrease in Revenue. The Revenue has been decreasing by -8.05% on average per year.
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 decrease in Earnings Per Share. In the coming years, the EPS will decrease by -0.33% yearly.
- Based on estimates for the next years, DXC will show a decrease in Revenue. The Revenue will decrease by -1.41% on average per year.
EPS Next Y-7.87%
EPS Next 2Y-3.86%
EPS Next 3Y-0.33%
EPS Next 5YN/A
Revenue Next Year-1.16%
Revenue Next 2Y-1.84%
Revenue Next 3Y-1.41%
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
- A Price/Earnings ratio of 4.57 indicates a rather cheap valuation of DXC.
- DXC's Price/Earnings ratio is rather cheap when compared to the industry. DXC is cheaper than 95.45% of the companies in the same industry.
- DXC is valuated cheaply when we compare the Price/Earnings ratio to 27.21, which is the current average of the S&P500 Index.
- The Price/Forward Earnings ratio is 4.73, 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 96.59% of the companies in the same industry.
- When comparing the Price/Forward Earnings ratio of DXC to the average of the S&P500 Index (25.98), we can say DXC is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 4.57 | ||
| Fwd PE | 4.73 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, DXC is valued cheaper than 98.86% of the companies in the same industry.
- DXC's Price/Free Cash Flow ratio is rather cheap when compared to the industry. DXC is cheaper than 98.86% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 2.8 | ||
| EV/EBITDA | 1.91 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-3.86%
EPS Next 3Y-0.33%
5. Dividend
5.1 Amount
- DXC does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0% |
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 4.57 and the Price/Book (PB) ratio is 0.85.
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 -7.87% in the next year.