DXC TECHNOLOGY CO (DXC) Stock Fundamental Analysis
NYSE:DXC - New York Stock Exchange, Inc. - US23355L1061 - Common Stock - Currency: USD
Taking everything into account, DXC scores 4 out of 10 in our fundamental rating. DXC was compared to 82 industry peers in the IT Services industry. Both the profitability and financial health of DXC have multiple concerns. DXC is valued quite cheap, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
In the past year DXC was profitable.
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.
In the past 5 years DXC always reported a positive cash flow from operatings.
1.2 Ratios
DXC has a Return On Assets of -0.58%. This is comparable to the rest of the industry: DXC outperforms 42.68% of its industry peers.
DXC has a Return On Equity (-2.51%) which is comparable to the rest of the industry.
DXC has a Return On Invested Capital of 3.54%. This is comparable to the rest of the industry: DXC outperforms 54.88% of its industry peers.
DXC had an Average Return On Invested Capital over the past 3 years of 2.21%. This is significantly below the industry average of 22.23%.
The 3 year average ROIC (2.21%) for DXC is below the current ROIC(3.54%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -0.58% | ||
| ROE | -2.51% | ||
| ROIC | 3.54% |
ROA(3y)0.21%
ROA(5y)-4.14%
ROE(3y)0.4%
ROE(5y)-22.8%
ROIC(3y)2.21%
ROIC(5y)N/A
1.3 Margins
DXC's Profit Margin has declined in the last couple of years.
DXC has a Operating Margin (4.19%) which is in line with its industry peers.
DXC's Operating Margin has declined in the last couple of years.
The Gross Margin of DXC (23.92%) is worse than 69.51% of its industry peers.
DXC's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 4.19% | ||
| PM (TTM) | N/A | ||
| GM | 23.92% |
OM growth 3YN/A
OM growth 5Y-23.65%
PM growth 3YN/A
PM growth 5Y-35.7%
GM growth 3Y3.25%
GM growth 5Y-4.17%
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 reduced compared to 1 year ago.
DXC has less shares outstanding than it did 5 years ago.
The debt/assets ratio for DXC is higher compared to a year ago.
2.2 Solvency
DXC has an Altman-Z score of 1.04. This is a bad value and indicates that DXC is not financially healthy and even has some risk of bankruptcy.
DXC has a Altman-Z score of 1.04. This is in the lower half of the industry: DXC underperforms 67.07% of its industry peers.
The Debt to FCF ratio of DXC is 5.24, which is a neutral value as it means it would take DXC, 5.24 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of DXC (5.24) 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.
With a Debt to Equity ratio value of 1.22, DXC is not doing good in the industry: 68.29% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.22 | ||
| Debt/FCF | 5.24 | ||
| Altman-Z | 1.04 |
ROIC/WACC0.43
WACC8.29%
2.3 Liquidity
DXC has a Current Ratio of 1.34. 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 (1.34) is worse than 62.20% of its industry peers.
A Quick Ratio of 1.34 indicates that DXC should not have too much problems paying its short term obligations.
Looking at the Quick ratio, with a value of 1.34, DXC is doing worse than 60.98% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.34 | ||
| Quick Ratio | 1.34 |
3. Growth
3.1 Past
DXC shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 10.56%, which is quite good.
DXC shows a very negative growth in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -17.65% yearly.
The Revenue has decreased by -5.65% in the past year.
DXC shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -8.01% yearly.
EPS 1Y (TTM)10.56%
EPS 3Y9.27%
EPS 5Y-17.65%
EPS Q2Q%5.75%
Revenue 1Y (TTM)-5.65%
Revenue growth 3Y-8.31%
Revenue growth 5Y-8.01%
Sales Q2Q%-5.12%
3.2 Future
DXC is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 4.69% yearly.
DXC is expected to show a decrease in Revenue. In the coming years, the Revenue will decrease by -3.51% yearly.
EPS Next Y6.68%
EPS Next 2Y4.28%
EPS Next 3Y3.54%
EPS Next 5Y4.69%
Revenue Next Year-5.96%
Revenue Next 2Y-4.81%
Revenue Next 3Y-3.88%
Revenue Next 5Y-3.51%
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
DXC is valuated cheaply with a Price/Earnings ratio of 4.71.
97.56% of the companies in the same industry are more expensive than DXC, based on the Price/Earnings ratio.
The average S&P500 Price/Earnings ratio is at 24.83. DXC is valued rather cheaply when compared to this.
The Price/Forward Earnings ratio is 4.87, which 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 96.34% of the companies listed in the same industry.
DXC's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 20.94.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 4.71 | ||
| Fwd PE | 4.87 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of DXC indicates a rather cheap valuation: DXC is cheaper than 95.12% of the companies listed in the same industry.
97.56% of the companies in the same industry are more expensive than DXC, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 4.15 | ||
| EV/EBITDA | 2.66 |
4.3 Compensation for Growth
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
PEG (NY)0.71
PEG (5Y)N/A
EPS Next 2Y4.28%
EPS Next 3Y3.54%
5. Dividend
5.1 Amount
No dividends for DXC!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
16.77
+0.52 (+3.2%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners95.6%
Inst Owner Change-9.75%
Ins Owners0.64%
Ins Owner Change-1.34%
Market Cap3.04B
Analysts50
Price Target21.46 (27.97%)
Short Float %3.58%
Short Ratio3.15
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)23.1%
Min EPS beat(2)18.16%
Max EPS beat(2)28.05%
EPS beat(4)4
Avg EPS beat(4)22.22%
Min EPS beat(4)15.96%
Max EPS beat(4)28.05%
EPS beat(8)6
Avg EPS beat(8)9.7%
EPS beat(12)8
Avg EPS beat(12)5.53%
EPS beat(16)11
Avg EPS beat(16)5.54%
Revenue beat(2)1
Avg Revenue beat(2)-0.73%
Min Revenue beat(2)-1.74%
Max Revenue beat(2)0.28%
Revenue beat(4)2
Avg Revenue beat(4)0.04%
Min Revenue beat(4)-1.74%
Max Revenue beat(4)2.02%
Revenue beat(8)3
Avg Revenue beat(8)-0.83%
Revenue beat(12)3
Avg Revenue beat(12)-1.11%
Revenue beat(16)4
Avg Revenue beat(16)-1.03%
PT rev (1m)-6.47%
PT rev (3m)-3.74%
EPS NQ rev (1m)0.35%
EPS NQ rev (3m)4.22%
EPS NY rev (1m)0.03%
EPS NY rev (3m)5.53%
Revenue NQ rev (1m)0.06%
Revenue NQ rev (3m)-3.01%
Revenue NY rev (1m)0.02%
Revenue NY rev (3m)-0.92%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 4.71 | ||
| Fwd PE | 4.87 | ||
| P/S | 0.23 | ||
| P/FCF | 4.15 | ||
| P/OCF | 2.23 | ||
| P/B | 1.02 | ||
| P/tB | 4.43 | ||
| EV/EBITDA | 2.66 |
EPS(TTM)3.56
EY21.23%
EPS(NY)3.45
Fwd EY20.55%
FCF(TTM)4.04
FCFY24.08%
OCF(TTM)7.53
OCFY44.89%
SpS72.29
BVpS16.51
TBVpS3.79
PEG (NY)0.71
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -0.58% | ||
| ROE | -2.51% | ||
| ROCE | 5.94% | ||
| ROIC | 3.54% | ||
| ROICexc | 4.35% | ||
| ROICexgc | 6.27% | ||
| OM | 4.19% | ||
| PM (TTM) | N/A | ||
| GM | 23.92% | ||
| FCFM | 5.59% |
ROA(3y)0.21%
ROA(5y)-4.14%
ROE(3y)0.4%
ROE(5y)-22.8%
ROIC(3y)2.21%
ROIC(5y)N/A
ROICexc(3y)2.64%
ROICexc(5y)N/A
ROICexgc(3y)4.02%
ROICexgc(5y)N/A
ROCE(3y)3.75%
ROCE(5y)N/A
ROICexcg growth 3YN/A
ROICexcg growth 5Y-33.14%
ROICexc growth 3YN/A
ROICexc growth 5Y-17.99%
OM growth 3YN/A
OM growth 5Y-23.65%
PM growth 3YN/A
PM growth 5Y-35.7%
GM growth 3Y3.25%
GM growth 5Y-4.17%
F-Score7
Asset Turnover1
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.22 | ||
| Debt/FCF | 5.24 | ||
| Debt/EBITDA | 1.91 | ||
| Cap/Depr | 46.75% | ||
| Cap/Sales | 4.83% | ||
| Interest Coverage | 1.97 | ||
| Cash Conversion | 71.7% | ||
| Profit Quality | N/A | ||
| Current Ratio | 1.34 | ||
| Quick Ratio | 1.34 | ||
| Altman-Z | 1.04 |
F-Score7
WACC8.29%
ROIC/WACC0.43
Cap/Depr(3y)43.15%
Cap/Depr(5y)42.53%
Cap/Sales(3y)4.6%
Cap/Sales(5y)4.52%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)10.56%
EPS 3Y9.27%
EPS 5Y-17.65%
EPS Q2Q%5.75%
EPS Next Y6.68%
EPS Next 2Y4.28%
EPS Next 3Y3.54%
EPS Next 5Y4.69%
Revenue 1Y (TTM)-5.65%
Revenue growth 3Y-8.31%
Revenue growth 5Y-8.01%
Sales Q2Q%-5.12%
Revenue Next Year-5.96%
Revenue Next 2Y-4.81%
Revenue Next 3Y-3.88%
Revenue Next 5Y-3.51%
EBIT growth 1Y161.96%
EBIT growth 3YN/A
EBIT growth 5Y-29.77%
EBIT Next Year108.47%
EBIT Next 3Y24.91%
EBIT Next 5Y18.12%
FCF growth 1Y1205.36%
FCF growth 3YN/A
FCF growth 5Y-1.87%
OCF growth 1Y77.94%
OCF growth 3Y181.52%
OCF growth 5Y-5.26%