DXC TECHNOLOGY CO (DXC) Stock Fundamental Analysis
USA - NYSE:DXC - US23355L1061 - Common Stock
12.85 USD
+0.03 (+0.23%)
12.85 USD
0 (0%)
DXC gets a fundamental rating of 3 out of 10. The analysis compared the fundamentals against 86 industry peers in the IT Services industry. There are concerns on the financial health of DXC while its profitability can be described as average. 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.
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
The Return On Assets of DXC (2.82%) is comparable to the rest of the industry.
DXC has a Return On Equity of 11.96%. This is in the better half of the industry: DXC outperforms 73.26% of its industry peers.
With a Return On Invested Capital value of 3.00%, DXC perfoms like the industry average, outperforming 52.33% 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 21.42%.
The last Return On Invested Capital (3.00%) for DXC is above the 3 year average (2.61%), which is a sign of increasing profitability.
| 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
DXC's Profit Margin of 2.96% is in line compared to the rest of the industry. DXC outperforms 54.65% of its industry peers.
In the last couple of years the Profit Margin of DXC has declined.
Looking at the Operating Margin, with a value of 3.71%, DXC is in line with its industry, outperforming 47.67% of the companies in the same industry.
In the last couple of years the Operating Margin of DXC has declined.
DXC has a worse Gross Margin (24.71%) than 73.26% 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
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 more shares outstanding
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 0.94, we must say that DXC is in the distress zone and has some risk of bankruptcy.
With a Altman-Z score value of 0.94, DXC is not doing good in the industry: 72.09% of the companies in the same industry are doing better.
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.
The Debt to FCF ratio of DXC (5.45) is comparable to the rest of the 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 72.09% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.22 | ||
| Debt/FCF | 5.45 | ||
| Altman-Z | 0.94 |
ROIC/WACC0.41
WACC7.39%
2.3 Liquidity
A Current Ratio of 1.22 indicates that DXC should not have too much problems paying its short term obligations.
DXC's Current 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.
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.
DXC's Quick ratio of 1.22 is on the low side compared to the rest of the industry. DXC is outperformed by 67.44% of its industry peers.
| 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%.
The Earnings Per Share has been decreasing by -9.24% on average over the past years.
DXC shows a decrease in Revenue. In the last year, the revenue decreased by -4.93%.
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
DXC is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 1.93% yearly.
Based on estimates for the next years, DXC will show a decrease in Revenue. The Revenue will decrease by -1.52% 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-1.52%
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
Based on the Price/Earnings ratio of 3.81, 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.
Compared to an average S&P500 Price/Earnings ratio of 27.40, DXC is valued rather cheaply.
A Price/Forward Earnings ratio of 4.05 indicates a rather cheap valuation of DXC.
Based on the Price/Forward Earnings ratio, DXC is valued cheaper than 97.67% of the companies in the same industry.
DXC is valuated cheaply when we compare the Price/Forward Earnings ratio to 22.94, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 3.81 | ||
| Fwd PE | 4.05 |
4.2 Price Multiples
DXC's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. DXC is cheaper than 97.67% of the companies in the same industry.
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 | 3.11 | ||
| EV/EBITDA | 2.14 |
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
No dividends for DXC!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
12.85
+0.03 (+0.23%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners93.03%
Inst Owner Change0.08%
Ins Owners1.17%
Ins Owner Change14.78%
Market Cap2.30B
Analysts50
Price Target16.64 (29.49%)
Short Float %4.96%
Short Ratio4.72
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%
PT rev (3m)-6.1%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-11.46%
EPS NY rev (1m)0%
EPS NY rev (3m)3.15%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)3.23%
Revenue NY rev (1m)0%
Revenue NY rev (3m)3.58%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 3.81 | ||
| Fwd PE | 4.05 | ||
| P/S | 0.18 | ||
| P/FCF | 3.11 | ||
| P/OCF | 1.71 | ||
| P/B | 0.73 | ||
| P/tB | 2.04 | ||
| EV/EBITDA | 2.14 |
EPS(TTM)3.37
EY26.23%
EPS(NY)3.17
Fwd EY24.7%
FCF(TTM)4.13
FCFY32.13%
OCF(TTM)7.52
OCFY58.52%
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 | 0.94 |
F-Score8
WACC7.39%
ROIC/WACC0.41
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-1.52%
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%