Last Update 07 Dec 25

UIS: Stable Revenues And Accelerating Bookings Will Drive Turnaround Upside

Analysts have modestly adjusted their price target on Unisys to $4.00. This reflects cautious optimism that the company’s stable revenues and accelerating bookings could drive a more meaningful turnaround by 2026 as they wait for a longer track record of execution.

Analyst Commentary

Analysts see Unisys as a developing turnaround story, with a balanced mix of upside potential and execution risk reflected in the current valuation and Hold rating.

Bullish Takeaways

Bullish analysts point to stable revenues as a sign that the core franchise is intact, supporting the view that downside to the current valuation is limited.
Accelerating bookings and new logo wins are viewed as early indicators that growth could reaccelerate, potentially justifying multiple expansion if the trend continues.
The current strategic turnaround plan is seen as more focused and credible than prior efforts, raising confidence that margins and cash flow could improve by 2026.
With expectations anchored around gradual improvement, even modest upside surprises on execution or growth could have an outsized impact on the share price.

Bearish Takeaways

Bearish analysts remain cautious on recommending the shares until there is a longer, sustained track record of successful execution against the turnaround plan.
They highlight the risk that accelerating bookings may not consistently convert into profitable, recurring revenue, which could limit earnings leverage and justify a subdued valuation.
Visibility into 2026 growth remains limited, and any delays in realizing the anticipated acceleration could pressure sentiment and cap near term upside.
Given the execution risks, some believe the current price target already discounts a meaningful portion of the potential turnaround benefits, leaving a less compelling risk reward profile.

What's in the News

Board amends and restates company bylaws to remove the mandatory officer retirement age of 65 and correct a previously misfiled charter with the Delaware Secretary of State, aligning governance documents with the current charter terms (Key Developments).
Unisys lowers full year 2025 constant currency revenue guidance to a decline of 4.0% to 3.0%. This implies reported revenue growth of negative 3.6% to negative 2.6%, driven by weaker expectations for Ex L and S revenue (Key Developments).
The company records a $55 million goodwill impairment in the third quarter of 2025, up from $39.1 million a year earlier, signaling continued pressure on certain business units (Key Developments).
Unisys, leading the EUCybersafe Consortium with partners Uni Systems and Wavestone, is selected by the European Commission for a four year Cybersecurity Professional Services Framework Contract to provide threat exposure management, managed detection and response, and cyber recovery services to 71 EU institutions and agencies (Key Developments).
Unisys partners with Appspace to enhance its Sustainable Workplace solution, integrating real time workplace data, touchless interactions, and self service tools to improve employee experience and space utilization while reducing environmental impact (Key Developments).

Valuation Changes

Fair Value Estimate unchanged at $5.25 per share, indicating no revision to the intrinsic value outlook.
Discount Rate steady at 12.5%, reflecting an unchanged view of Unisys’s risk profile and cost of capital.
Revenue Growth effectively flat at approximately 4.37% CAGR, with only an immaterial technical adjustment in the model.
Net Profit Margin nudged slightly higher from about 6.97% to 6.98%, signaling a modest improvement in long term profitability assumptions.
Future P/E Multiple edged down marginally from roughly 3.73x to 3.73x, suggesting a slightly more conservative view on longer term market valuation.

Enhanced demand for advanced security, cloud, and AI-driven services is strengthening Unisys' recurring revenue streams and supporting margin expansion.
Streamlined capital structure and operational efficiencies enable greater investment in innovation, boosting earnings stability and positioning Unisys for sustained growth.
Muted demand, legacy revenue volatility, competitive and talent pressures threaten Unisys's ability to profitably shift toward next-generation digital and cloud offerings.

Catalysts

About Unisys

Operates as an information technology solutions company in the United States, the United Kingdom, and internationally.What are the underlying business or industry changes driving this perspective?

Ongoing global cybersecurity threats are fueling sustained demand for advanced security solutions-a Unisys strength-while the company's continued modernization of proprietary offerings like Stealth and ClearPath Forward is driving higher-margin, recurring revenue streams, which are likely to support future revenue growth and net margin expansion.
Accelerated client adoption of hybrid and multi-cloud environments is driving increased need for IT consulting and managed services; Unisys' robust pipeline in cloud, infrastructure, and intelligent operations positions it to benefit from these market shifts, likely boosting long-term contract win rates and supporting top-line revenue.
Expanded investment in automation and operational AI (e.g., Service Experience Accelerator, DSS) is increasing service delivery efficiency and enabling Unisys to deliver solutions at higher scale and lower cost-improving operational leverage and supporting net margin improvement.
Strong momentum in new business signings and multi-year deals-particularly within regulated industries and the public sector-enhances revenue visibility, earnings stability, and supports sustained growth in recurring revenue.
Recent actions to simplify the company's capital structure (removing substantial pension volatility, refinancing debt, and improving cash flow outlook) free up resources for ongoing innovation and growth initiatives, likely to positively impact free cash flow and earnings over the next several years.

Unisys Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Unisys's revenue will grow by 3.1% annually over the next 3 years.
Analysts are not forecasting that Unisys will become profitable in next 3 years. To represent the Analyst Price Target as a Future PE Valuation we will estimate Unisys's profit margin will increase from -4.2% to the average GB IT industry of 6.4% in 3 years.
If Unisys's profit margin were to converge on the industry average, you could expect earnings to reach $136.9 million (and earnings per share of $1.78) by about September 2028, up from $-81.5 million today. The analysts are largely in agreement about this estimate.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 6.1x on those 2028 earnings, up from -3.4x today. This future PE is lower than the current PE for the GB IT industry at 32.4x.
Analysts expect the number of shares outstanding to grow by 2.78% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 12.32%, as per the Simply Wall St company report.

Unisys Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Unisys continues to face muted demand and elongated decision cycles in its largest revenue segment-Cloud, Applications & Infrastructure Solutions (CA&I)-due to macroeconomic uncertainty, cautious public sector funding, and geopolitical concerns, which may lead to persistently slow or declining revenue growth in key markets. (Impacts: revenue growth, recurring revenue stability)
The company's License & Support (L&S) revenue, which contributes significant margin, remains highly sensitive to customer consumption habits, renewal timing, and contract duration preferences, making revenue recognition and future profit forecasts volatile and harder to sustain as clients accelerate digital transformation and potentially move away from legacy platforms. (Impacts: recurring revenue, net margins, earnings predictability)
Despite investments in automation, AI, and modernization, Unisys's long-term growth depends on successfully transforming revenue mix and scaling next-generation digital workplace and cloud offerings; consistent underperformance in CA&I and pressure to offset declining legacy business exposes the company to execution risk if these new segments fail to achieve sustained profitability. (Impacts: future net margins, long-term earnings growth)
Increased industry consolidation, dominance by hyperscalers (Amazon, Microsoft, Google), and the shift towards standardized SaaS and cloud-native solutions may compress Unisys's ability to win large contracts, reduce market share, and erode pricing power, further limiting expansion of higher-margin offerings. (Impacts: future revenue opportunities, pricing power, net margins)
Ongoing global talent shortages and rising wage inflation in the technology sector create cost pressures and threaten Unisys's ability to attract and retain skilled personnel at scale, potentially increasing operating expenses, compressing margins, and impacting operating leverage compared to larger, better-capitalized competitors. (Impacts: operating expenses, gross/operating margins, earnings)

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $7.667 for Unisys based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $9.0, and the most bearish reporting a price target of just $6.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $2.1 billion, earnings will come to $136.9 million, and it would be trading on a PE ratio of 6.1x, assuming you use a discount rate of 12.3%.
Given the current share price of $3.83, the analyst price target of $7.67 is 50.0% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

Advanced Cybersecurity And Hybrid Cloud Will Create Future Opportunity