DXC TECHNOLOGY CO (DXC) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:DXC - US23355L1061 - Common Stock
14.36 USD
+0.24 (+1.7%)
14.1945 USD
-0.17 (-1.15%)
Overall DXC gets a fundamental rating of 3 out of 10. We evaluated DXC against 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 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.
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 (2.75%) is comparable to the rest of the industry.
DXC's Return On Equity of 12.15% is fine compared to the rest of the industry. DXC outperforms 71.76% of its industry peers.
DXC has a Return On Invested Capital (2.72%) which is comparable to the rest of the industry.
DXC had an Average Return On Invested Capital over the past 3 years of 2.61%. This is significantly below the industry average of 29.59%.
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 comparable to the rest of the industry.
DXC's Profit Margin has declined in the last couple of years.
Looking at the Operating Margin, with a value of 3.51%, DXC is in line with its industry, outperforming 49.41% of the companies in the same industry.
DXC's Operating Margin has declined in the last couple of years.
DXC has a Gross Margin of 24.59%. This is in the lower half of the industry: DXC underperforms 71.76% of its industry peers.
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.
Compared to 1 year ago, DXC has more shares outstanding
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.
DXC's Altman-Z score of 0.90 is on the low side compared to the rest of the industry. DXC is outperformed by 69.41% of its industry peers.
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.
The Debt to FCF ratio of DXC (4.26) is comparable to the rest of the industry.
DXC has a Debt/Equity ratio of 1.25. This is a high value indicating a heavy dependency on external financing.
DXC has a worse Debt to Equity ratio (1.25) than 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
WACC7.56%
2.3 Liquidity
A Current Ratio of 1.09 indicates that DXC should not have too much problems paying its short term obligations.
DXC's Current ratio of 1.09 is on the low side compared to the rest of the industry. DXC is outperformed by 74.12% of its industry peers.
DXC has a Quick 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.
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
The earnings per share for DXC have decreased by -6.55% in the last 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 -4.13% in the last year.
The Revenue has been decreasing by -8.05% on average over the past years.
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
The Earnings Per Share is expected to decrease by -0.18% on average over the next years.
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.
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 4.38 indicates a rather cheap valuation of DXC.
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.
When comparing the Price/Earnings ratio of DXC to the average of the S&P500 Index (26.34), we can say DXC is valued rather cheaply.
Based on the Price/Forward Earnings ratio of 4.52, the valuation of DXC can be described as very cheap.
Based on the Price/Forward Earnings ratio, DXC is valued cheaper than 97.65% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 23.56, DXC is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 4.38 | ||
| Fwd PE | 4.52 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, DXC is valued cheaper than 98.82% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, DXC is valued cheaper than 98.82% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 2.68 | ||
| 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 |
14.36
+0.24 (+1.7%)
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 Cap2.50B
Revenue(TTM)12.71B
Net Income(TTM)373.00M
Analysts50
Price Target16.08 (11.98%)
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 | 4.38 | ||
| Fwd PE | 4.52 | ||
| P/S | 0.2 | ||
| P/FCF | 2.68 | ||
| P/OCF | 1.6 | ||
| P/B | 0.81 | ||
| P/tB | 3.7 | ||
| EV/EBITDA | 1.82 |
EPS(TTM)3.28
EY22.84%
EPS(NY)3.18
Fwd EY22.12%
FCF(TTM)5.36
FCFY37.35%
OCF(TTM)8.98
OCFY62.51%
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
WACC7.56%
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 4.38 and the Price/Book (PB) ratio is 0.81.
How financially healthy is DXC TECHNOLOGY CO?
The financial health rating of DXC TECHNOLOGY CO (DXC) is 3 / 10.