DXC TECHNOLOGY CO (DXC) Stock Fundamental Analysis
USA - NYSE:DXC - US23355L1061 - Common Stock
13.91 USD
-0.11 (-0.78%)
13.99 USD
+0.08 (+0.58%)
We assign a fundamental rating of 3 out of 10 to DXC. DXC was compared to 86 industry peers in the IT Services industry. While DXC is still in line with the averages on profitability rating, there are concerns on its financial 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
With a Return On Assets value of 2.82%, DXC perfoms like the industry average, outperforming 58.14% of the companies in the same industry.
DXC's Return On Equity of 11.96% is fine compared to the rest of the industry. DXC outperforms 73.26% of its industry peers.
DXC has a Return On Invested Capital (3.00%) which is in line with its industry peers.
DXC had an Average Return On Invested Capital over the past 3 years of 2.61%. This is significantly below the industry average of 21.79%.
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
With a Profit Margin value of 2.96%, DXC perfoms like the industry average, outperforming 54.65% of the companies in the same industry.
In the last couple of years the Profit Margin of DXC has declined.
DXC has a Operating Margin of 3.71%. This is comparable to the rest of the industry: DXC outperforms 47.67% of its industry peers.
DXC's Operating Margin has declined in the last couple of years.
With a Gross Margin value of 24.71%, DXC is not doing good in the industry: 72.09% of the companies in the same industry are doing better.
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.
DXC has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, DXC has an improved debt to assets ratio.
2.2 Solvency
DXC has an Altman-Z score of 0.95. 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 0.95, DXC is doing worse than 72.09% of the companies in the same industry.
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.
DXC's Debt to FCF ratio of 5.45 is in line compared to the rest of the industry. DXC outperforms 56.98% 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.
DXC has a Debt to Equity ratio of 1.22. This is in the lower half of the industry: DXC underperforms 72.09% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.22 | ||
| Debt/FCF | 5.45 | ||
| Altman-Z | 0.95 |
ROIC/WACC0.38
WACC7.87%
2.3 Liquidity
A Current Ratio of 1.22 indicates that DXC should not have too much problems paying its short term obligations.
The Current ratio of DXC (1.22) is worse than 69.77% of its industry peers.
A Quick Ratio of 1.22 indicates that DXC should not have too much problems paying its short term obligations.
DXC's Quick ratio of 1.22 is on the low side compared to the rest of the industry. DXC is outperformed by 68.60% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.22 | ||
| Quick Ratio | 1.22 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 2.74% over the past year.
DXC shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -9.24% yearly.
Looking at the last year, DXC shows a decrease in Revenue. The Revenue has decreased by -4.93% 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)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
The Earnings Per Share is expected to grow by 1.93% on average over the next years.
Based on estimates for the next years, DXC will show a decrease in Revenue. The Revenue will decrease by -1.49% on average per year.
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-1.73%
Revenue Next 3Y-1.49%
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 4.13, the valuation of DXC can be described as very cheap.
Based on the Price/Earnings ratio, DXC is valued cheaply inside the industry as 97.67% of the companies are valued more expensively.
The average S&P500 Price/Earnings ratio is at 27.27. DXC is valued rather cheaply when compared to this.
A Price/Forward Earnings ratio of 4.38 indicates a rather cheap valuation of DXC.
Compared to the rest of the industry, the Price/Forward Earnings ratio of DXC indicates a rather cheap valuation: DXC is cheaper than 96.51% of the companies listed in the same industry.
When comparing the Price/Forward Earnings ratio of DXC to the average of the S&P500 Index (22.77), we can say DXC is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 4.13 | ||
| Fwd PE | 4.38 |
4.2 Price Multiples
98.84% 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 cheaper than 100.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 3.37 | ||
| EV/EBITDA | 2.26 |
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 |
13.91
-0.11 (-0.78%)
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 Cap2.49B
Analysts50
Price Target16.64 (19.63%)
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)-3%
PT rev (3m)-9.1%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-10.83%
EPS NY rev (1m)3.15%
EPS NY rev (3m)1.95%
Revenue NQ rev (1m)0.03%
Revenue NQ rev (3m)3.16%
Revenue NY rev (1m)2.5%
Revenue NY rev (3m)3.58%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 4.13 | ||
| Fwd PE | 4.38 | ||
| P/S | 0.19 | ||
| P/FCF | 3.37 | ||
| P/OCF | 1.85 | ||
| P/B | 0.79 | ||
| P/tB | 2.21 | ||
| EV/EBITDA | 2.26 |
EPS(TTM)3.37
EY24.23%
EPS(NY)3.17
Fwd EY22.82%
FCF(TTM)4.13
FCFY29.68%
OCF(TTM)7.52
OCFY54.06%
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 | 0.95 |
F-Score8
WACC7.87%
ROIC/WACC0.38
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-1.73%
Revenue Next 3Y-1.49%
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%