DXC TECHNOLOGY CO (DXC) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:DXC - US23355L1061 - Common Stock
14.12 USD
+0.14 (+1%)
14.12 USD
0 (0%)
We assign a fundamental rating of 3 out of 10 to DXC. DXC was compared to 85 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 has a bad growth rate and is valued cheaply.
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.
DXC had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
The Return On Assets of DXC (2.75%) is comparable to the rest of the industry.
Looking at the Return On Equity, with a value of 12.15%, DXC is in the better half of the industry, outperforming 71.76% of the companies in the same industry.
The Return On Invested Capital of DXC (2.72%) is comparable to the rest of the industry.
The Average Return On Invested Capital over the past 3 years for DXC is significantly below the industry average of 29.59%.
The last Return On Invested Capital (2.72%) for DXC is above the 3 year average (2.61%), which is a sign of increasing profitability.
| 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
With a Profit Margin value of 2.93%, DXC perfoms like the industry average, outperforming 54.12% 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 3.51%. This is comparable to the rest of the industry: DXC outperforms 49.41% of its industry peers.
In the last couple of years the Operating Margin of DXC has declined.
With a Gross Margin value of 24.59%, DXC is not doing good in the industry: 71.76% of the companies in the same industry are doing better.
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.
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
Compared to 1 year ago, DXC has an improved debt to assets ratio.
2.2 Solvency
Based on the Altman-Z score of 0.90, we must say that DXC is in the distress zone and has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 0.90, DXC is doing worse than 69.41% of the companies in the same industry.
DXC has a debt to FCF ratio of 4.26. This is a neutral value as DXC would need 4.26 years to pay back of all of its debts.
DXC has a Debt to FCF ratio of 4.26. This is comparable to the rest of the industry: DXC outperforms 55.29% of its industry peers.
A Debt/Equity ratio of 1.25 is on the high side and indicates that DXC has dependencies on debt financing.
DXC has a Debt to Equity ratio of 1.25. This is in the lower half of the industry: DXC underperforms 72.94% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.25 | ||
| Debt/FCF | 4.26 | ||
| Altman-Z | 0.9 |
ROIC/WACC0.36
WACC7.55%
2.3 Liquidity
A Current Ratio of 1.09 indicates that DXC should not have too much problems paying its short term obligations.
DXC has a Current ratio of 1.09. This is in the lower half of the industry: DXC underperforms 74.12% of its industry peers.
A Quick Ratio of 1.09 indicates that DXC should not have too much problems paying its short term obligations.
DXC has a worse Quick ratio (1.09) than 74.12% 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%.
DXC shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -9.24% yearly.
DXC shows a decrease in Revenue. In the last year, the revenue decreased by -4.13%.
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 -0.18% yearly.
DXC is expected to show a decrease in Revenue. In the coming years, the Revenue will decrease by -1.46% yearly.
EPS Next Y-7.9%
EPS Next 2Y-3.78%
EPS Next 3Y-0.18%
EPS Next 5YN/A
Revenue Next Year-1.18%
Revenue Next 2Y-1.87%
Revenue Next 3Y-1.46%
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
With a Price/Earnings ratio of 4.30, the valuation of DXC can be described as very cheap.
Compared to the rest of the industry, the Price/Earnings ratio of DXC indicates a rather cheap valuation: DXC is cheaper than 96.47% of the companies listed in the same industry.
DXC is valuated cheaply when we compare the Price/Earnings ratio to 26.49, which is the current average of the S&P500 Index.
DXC is valuated cheaply with a Price/Forward Earnings ratio of 4.45.
Based on the Price/Forward Earnings ratio, DXC is valued cheaper than 97.65% of the companies in the same industry.
DXC is valuated cheaply when we compare the Price/Forward Earnings ratio to 23.69, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 4.3 | ||
| Fwd PE | 4.45 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, DXC is valued cheaply inside the industry as 98.82% of the companies are valued more expensively.
DXC's Price/Free Cash Flow ratio is rather cheap when compared to the industry. DXC is cheaper than 98.82% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 2.63 | ||
| EV/EBITDA | 1.82 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-3.78%
EPS Next 3Y-0.18%
5. Dividend
5.1 Amount
No dividends for DXC!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
14.12
+0.14 (+1%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners96.68%
Inst Owner Change0.41%
Ins Owners1.2%
Ins Owner Change0.75%
Market Cap2.46B
Revenue(TTM)12.71B
Net Income(TTM)373.00M
Analysts50
Price Target16.08 (13.88%)
Short Float %6.42%
Short Ratio5.56
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)13.99%
Min EPS beat(2)8.59%
Max EPS beat(2)19.38%
EPS beat(4)4
Avg EPS beat(4)13.44%
Min EPS beat(4)7.63%
Max EPS beat(4)19.38%
EPS beat(8)8
Avg EPS beat(8)17.01%
EPS beat(12)10
Avg EPS beat(12)10.51%
EPS beat(16)11
Avg EPS beat(16)6.35%
Revenue beat(2)1
Avg Revenue beat(2)0.01%
Min Revenue beat(2)-1.16%
Max Revenue beat(2)1.19%
Revenue beat(4)2
Avg Revenue beat(4)-0.39%
Min Revenue beat(4)-1.74%
Max Revenue beat(4)1.19%
Revenue beat(8)5
Avg Revenue beat(8)0.05%
Revenue beat(12)5
Avg Revenue beat(12)-0.62%
Revenue beat(16)5
Avg Revenue beat(16)-0.89%
PT rev (1m)-2.74%
PT rev (3m)-5.68%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-4.74%
EPS NY rev (1m)0%
EPS NY rev (3m)1.04%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.56%
Revenue NY rev (1m)-0.05%
Revenue NY rev (3m)-0.29%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 4.3 | ||
| Fwd PE | 4.45 | ||
| P/S | 0.19 | ||
| P/FCF | 2.63 | ||
| P/OCF | 1.57 | ||
| P/B | 0.8 | ||
| P/tB | 3.64 | ||
| EV/EBITDA | 1.82 |
EPS(TTM)3.28
EY23.23%
EPS(NY)3.18
Fwd EY22.49%
FCF(TTM)5.36
FCFY37.99%
OCF(TTM)8.98
OCFY63.57%
SpS73.01
BVpS17.64
TBVpS3.88
PEG (NY)N/A
PEG (5Y)N/A
Graham Number36.08
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.75% | ||
| ROE | 12.15% | ||
| ROCE | 5.2% | ||
| ROIC | 2.72% | ||
| ROICexc | 3.35% | ||
| ROICexgc | 4.75% | ||
| OM | 3.51% | ||
| PM (TTM) | 2.93% | ||
| GM | 24.59% | ||
| FCFM | 7.35% |
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
ROICexgc growth 3Y8.66%
ROICexgc 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-Score7
Asset Turnover0.94
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.25 | ||
| Debt/FCF | 4.26 | ||
| Debt/EBITDA | 2.25 | ||
| Cap/Depr | 50.08% | ||
| Cap/Sales | 4.95% | ||
| Interest Coverage | 2 | ||
| Cash Conversion | 91.83% | ||
| Profit Quality | 250.4% | ||
| Current Ratio | 1.09 | ||
| Quick Ratio | 1.09 | ||
| Altman-Z | 0.9 |
F-Score7
WACC7.55%
ROIC/WACC0.36
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)-6.55%
EPS 3Y-0.58%
EPS 5Y-9.24%
EPS Q2Q%-9.68%
EPS Next Y-7.9%
EPS Next 2Y-3.78%
EPS Next 3Y-0.18%
EPS Next 5YN/A
Revenue 1Y (TTM)-4.13%
Revenue growth 3Y-7.5%
Revenue growth 5Y-8.05%
Sales Q2Q%-2.47%
Revenue Next Year-1.18%
Revenue Next 2Y-1.87%
Revenue Next 3Y-1.46%
Revenue Next 5YN/A
EBIT growth 1Y-13.06%
EBIT growth 3Y0.55%
EBIT growth 5Y-21.62%
EBIT Next Year80.41%
EBIT Next 3Y20.14%
EBIT Next 5YN/A
FCF growth 1Y24.87%
FCF growth 3Y-4.75%
FCF growth 5Y-14.28%
OCF growth 1Y10.46%
OCF growth 3Y-3.44%
OCF growth 5Y-9.87%
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.
Can you provide the valuation status for DXC TECHNOLOGY CO?
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.
What is the valuation of DXC TECHNOLOGY CO based on its PE and PB ratios?
The Price/Earnings (PE) ratio for DXC TECHNOLOGY CO (DXC) is 4.3 and the Price/Book (PB) ratio is 0.8.
How financially healthy is DXC TECHNOLOGY CO?
The financial health rating of DXC TECHNOLOGY CO (DXC) is 3 / 10.