DXC Technology (DXC): Assessing Valuation After Landmark Metropolitan Police Contract Win

DXC Technology (DXC) recently secured a multi-year contract to modernize the Metropolitan Police Service's core operations. This further showcases its expertise in public sector digital transformation. This partnership signals both revenue potential and rising industry influence for DXC.

See our latest analysis for DXC Technology.

Despite landing a major contract and stepping up its industry profile, DXC Technology’s recent momentum has not shifted investor sentiment. Its total shareholder return over the past year is down 42.2%, and the share price has slipped 33% year-to-date. While short-term price moves have leveled out, performance trends continue to weigh on the long-term outlook.

If this transformation story has you thinking bigger, you might want to broaden your investing universe and discover fast growing stocks with high insider ownership

That leaves investors at a crossroads, wondering if current market pessimism means DXC is undervalued or if recent contract wins and cost savings are fully priced in. Is this a buying opportunity, or is future growth already reflected?

Most Popular Narrative: 9.2% Undervalued

With DXC Technology closing at $13.16 and the most widely followed narrative assigning a fair value of $14.50, the stock sits notably below its analyzed potential. This misalignment raises the question: what is driving the higher fair value despite muted market momentum?

“Deepening strategic partnerships with AI and cloud ecosystem players (such as Boomi, Microsoft, AWS, and Google Cloud) create opportunities to deliver value-added solutions for complex enterprise transformations, potentially lifting average deal size, win rates, and revenue growth in key segments.”

Read the complete narrative.

Want to uncover which big tech alliances are setting the stage? Behind that higher price tag are game-changing partnerships and ambitious margin projections. Surprised by which variables tip the scales? Find out what powers this narrative’s calculation and why analysts are seeing more upside than meets the eye.

Result: Fair Value of $14.50 (UNDERVALUED)

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

However, persistent revenue declines and competition from digital-native firms could undermine DXC's turnaround story. This situation may keep long-term growth and margin improvements at risk.

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

Build Your Own DXC Technology Narrative

If you see things differently or prefer hands-on analysis, you can examine the numbers for yourself and craft a unique perspective in just minutes. Do it your way

A great starting point for your DXC Technology research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.

Looking for more investment ideas?

Keep your portfolio ahead of the curve by tapping into powerful stock screeners. Expand your search for tomorrow’s winners and don’t let great opportunities slip past you.

• Spot income potential and boost your returns with these 16 dividend stocks with yields > 3% offering yields above 3% from resilient companies.
• Catch market movers in artificial intelligence by following these 25 AI penny stocks to see who is shaping the next wave in technology.
• Secure growth at bargain prices by checking out these 884 undervalued stocks based on cash flows and find stocks that may be trading below their true value.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com