DXC TECHNOLOGY CO (DXC) Stock Fundamental Analysis
NYSE:DXC - New York Stock Exchange, Inc. - US23355L1061 - Common Stock - Currency: USD
Overall DXC gets a fundamental rating of 3 out of 10. We evaluated DXC against 82 industry peers in the IT Services industry. DXC has a medium profitability rating, but doesn't score so well on its financial health evaluation. 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.
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.
DXC had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
DXC's Return On Assets of 2.82% is in line compared to the rest of the industry. DXC outperforms 58.54% of its industry peers.
DXC's Return On Equity of 11.96% is fine compared to the rest of the industry. DXC outperforms 73.17% of its industry peers.
DXC's Return On Invested Capital of 3.00% is in line compared to the rest of the industry. DXC outperforms 52.44% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for DXC is significantly below the industry average of 22.31%.
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 54.88% of its industry peers.
DXC's Profit Margin has declined in the last couple of years.
DXC's Operating Margin of 3.71% is in line compared to the rest of the industry. DXC outperforms 48.78% of its industry peers.
DXC's Operating Margin has declined in the last couple of years.
The Gross Margin of DXC (24.71%) is worse than 70.73% of its industry peers.
DXC's Gross Margin has been stable in the last couple of years.
| 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.
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 70.73% 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.
Looking at the Debt to FCF ratio, with a value of 5.45, DXC is in line with its industry, outperforming 56.10% of the companies in the same industry.
DXC has a Debt/Equity ratio of 1.22. This is a high value indicating a heavy dependency on external financing.
With a Debt to Equity ratio value of 1.22, DXC is not doing good in the industry: 74.39% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.22 | ||
| Debt/FCF | 5.45 | ||
| Altman-Z | 0.95 |
ROIC/WACC0.38
WACC7.94%
2.3 Liquidity
DXC has a Current 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.
The Current ratio of DXC (1.22) is worse than 68.29% of its industry peers.
A Quick Ratio of 1.22 indicates that DXC should not have too much problems paying its short term obligations.
Looking at the Quick ratio, with a value of 1.22, DXC is doing worse than 67.07% of the companies in the same industry.
| 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%.
DXC shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -9.24% yearly.
The Revenue has decreased by -4.93% in the past 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
Based on estimates for the next years, DXC will show a decrease in Earnings Per Share. The EPS will decrease by -3.62% on average per year.
The Revenue is expected to decrease by -2.81% on average over the next years.
EPS Next Y-11.63%
EPS Next 2Y-4.11%
EPS Next 3Y-3.62%
EPS Next 5YN/A
Revenue Next Year-3.3%
Revenue Next 2Y-3.06%
Revenue Next 3Y-2.81%
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.
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 3.81, 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 98.78% of the companies listed in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 26.41, DXC is valued rather cheaply.
The Price/Forward Earnings ratio is 4.07, which indicates a rather cheap valuation of DXC.
Based on the Price/Forward Earnings ratio, DXC is valued cheaply inside the industry as 95.12% of the companies are valued more expensively.
DXC is valuated cheaply when we compare the Price/Forward Earnings ratio to 33.87, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 3.81 | ||
| Fwd PE | 4.07 |
4.2 Price Multiples
DXC's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. DXC is cheaper than 98.78% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of DXC indicates a rather cheap valuation: DXC is cheaper than 98.78% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 3.16 | ||
| EV/EBITDA | 2.19 |
4.3 Compensation for Growth
DXC's earnings are expected to decrease with -3.62% in the coming years. This may justify a cheaper valuation.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-4.11%
EPS Next 3Y-3.62%
5. Dividend
5.1 Amount
No dividends for DXC!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
12.85
-0.29 (-2.21%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners91.39%
Inst Owner Change-0.35%
Ins Owners0.84%
Ins Owner Change13.07%
Market Cap2.34B
Analysts50
Price Target17.16 (33.54%)
Short Float %4.79%
Short Ratio4.55
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)-5.68%
PT rev (3m)-20.07%
EPS NQ rev (1m)-9.19%
EPS NQ rev (3m)-20.83%
EPS NY rev (1m)0%
EPS NY rev (3m)-12.06%
Revenue NQ rev (1m)3.2%
Revenue NQ rev (3m)1.95%
Revenue NY rev (1m)1.06%
Revenue NY rev (3m)0.38%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 3.81 | ||
| Fwd PE | 4.07 | ||
| P/S | 0.18 | ||
| P/FCF | 3.16 | ||
| P/OCF | 1.74 | ||
| P/B | 0.74 | ||
| P/tB | 2.08 | ||
| EV/EBITDA | 2.19 |
EPS(TTM)3.37
EY26.23%
EPS(NY)3.15
Fwd EY24.54%
FCF(TTM)4.06
FCFY31.63%
OCF(TTM)7.4
OCFY57.61%
SpS70.37
BVpS17.42
TBVpS6.19
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
WACC7.94%
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-11.63%
EPS Next 2Y-4.11%
EPS Next 3Y-3.62%
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-3.3%
Revenue Next 2Y-3.06%
Revenue Next 3Y-2.81%
Revenue Next 5YN/A
EBIT growth 1Y-13.95%
EBIT growth 3Y0.55%
EBIT growth 5Y-21.62%
EBIT Next Year80.51%
EBIT Next 3Y20.28%
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%