A Look at DXC Technology's Valuation Following Its Strategic Splitit Banking Partnership

DXC Technology (DXC) just entered a strategic partnership with Splitit that brings banks a new way to offer branded installment plans, both online and in stores, directly at the point of checkout. This collaboration taps into DXC’s large-scale Hogan core banking platform in combination with Splitit’s AI-driven technology, enabling banks and merchants to compete with Buy Now, Pay Later providers while expanding flexible payment options for consumers.

See our latest analysis for DXC Technology.

After a year marked by declining momentum, DXC Technology's new alliance with Splitit arrives following several sizable moves, including the rollout of AI-driven smart insurance tools and the appointment of a new Chief Marketing Officer. Despite these initiatives, the stock's 1-year total shareholder return sits at -33.9%, reflecting ongoing pressures, while the share price is currently $13.27. Both short and long-term performance remain challenged, but recent efforts suggest the company is actively repositioning for future growth.

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With shares trading at a double-digit discount to analyst targets and a year of negative returns, the key question is whether DXC’s recent innovations mark a turning point or if the market has already priced in its outlook.

Most Popular Narrative: 12.3% Undervalued

DXC Technology’s most widely followed narrative suggests investors are overlooking significant upside, with a fair value meaningfully higher than the current close of $13.27. While the stock has struggled, this narrative points to pivotal factors that could drive a reassessment in the market.

DXC's strong bookings momentum, with three consecutive quarters of double-digit growth and a sustained trailing 12-month book-to-bill ratio above 1.0, suggests improving deal flow linked to client demand for digital modernization. This trend could convert to organic revenue stabilization and growth over the next 12 to 18 months.

Read the complete narrative.

Want a glimpse into what is powering that bullish outlook? The entire fair value calculation hinges on a blend of stable revenue, margin shifts, and a profit multiple that raises eyebrows. There is a bold set of projections behind this number. If you want to know what they are, the full narrative reveals all.

Result: Fair Value of $15.12 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent revenue declines and mounting competitive pressure could undermine DXC's turnaround story. This raises questions about the company’s long-term resilience.

Find out about the key risks to this DXC Technology narrative.

Build Your Own DXC Technology Narrative

If you have a different view or want to dig into the numbers independently, you're invited to build your own perspective in just a few minutes. Do it your way

A great starting point for your DXC Technology research is our analysis highlighting 3 key rewards and 3 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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