NYSE:DXC

Stock Analysis Report

Executive Summary

DXC Technology Company, together with its subsidiaries, provides information technology services and solutions primarily in North America, Europe, Asia, and Australia.

Rewards

Trading at 38.1% below its fair value

Earnings are forecast to grow 117.21% per year

Risk Analysis

Interest payments are not well covered by earnings

Dividend of 2.73% is not well covered by earnings



Snowflake Analysis

Fair value with moderate growth potential.


Similar Companies

Share Price & News

How has DXC Technology's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: DXC has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-5.7%

DXC

3.0%

US IT

1.8%

US Market


1 Year Return

-52.9%

DXC

37.2%

US IT

20.1%

US Market

Return vs Industry: DXC underperformed the US IT industry which returned 37.1% over the past year.

Return vs Market: DXC underperformed the US Market which returned 20.1% over the past year.


Shareholder returns

DXCIndustryMarket
7 Day-5.7%3.0%1.8%
30 Day-13.4%4.5%1.4%
90 Day-16.8%14.9%8.8%
1 Year-52.0%-52.9%38.6%37.2%22.7%20.1%
3 Year-47.6%-56.3%112.4%103.1%50.1%40.4%
5 Year34.8%-54.0%148.0%126.0%72.9%53.9%

Price Volatility Vs. Market

How volatile is DXC Technology's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is DXC Technology undervalued compared to its fair value and its price relative to the market?

38.1%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: DXC ($30.82) is trading below our estimate of fair value ($49.79)

Significantly Below Fair Value: DXC is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: DXC is unprofitable, so we can't compare its PE Ratio to the IT industry average.

PE vs Market: DXC is unprofitable, so we can't compare its PE Ratio to the US market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate DXC's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: DXC is good value based on its PB Ratio (0.9x) compared to the US IT industry average (4.2x).


Next Steps

Future Growth

How is DXC Technology forecast to perform in the next 1 to 3 years based on estimates from 13 analysts?

117.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: DXC is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (1.7%).

Earnings vs Market: DXC is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: DXC's is expected to become profitable in the next 3 years.

Revenue vs Market: DXC's revenue is expected to decline over the next 3 years (-5.7% per year).

High Growth Revenue: DXC's revenue is forecast to decline over the next 3 years (-5.7% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: DXC's Return on Equity is forecast to be low in 3 years time (11.1%).


Next Steps

Past Performance

How has DXC Technology performed over the past 5 years?

19.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: DXC is currently unprofitable.

Growing Profit Margin: DXC is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: DXC is unprofitable, but has reduced losses over the past 5 years at a rate of 19.9% per year.

Accelerating Growth: Unable to compare DXC's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: DXC is unprofitable, making it difficult to compare its past year earnings growth to the IT industry (14.8%).


Return on Equity

High ROE: DXC has a negative Return on Equity (-17.43%), as it is currently unprofitable.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is DXC Technology's financial position?


Financial Position Analysis

Short Term Liabilities: DXC's short term assets ($8.2B) do not cover its short term liabilities ($8.8B).

Long Term Liabilities: DXC's short term assets ($8.2B) do not cover its long term liabilities ($11.7B).


Debt to Equity History and Analysis

Debt Level: DXC's debt to equity ratio (85.3%) is considered high.

Reducing Debt: DXC's debt to equity ratio has increased from 75.9% to 85.3% over the past 5 years.


Balance Sheet

Inventory Level: DXC has a low level of unsold assets or inventory.

Debt Coverage by Assets: DXC's debt is covered by short term assets (assets are 1.1x debt).


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: DXC has been profitable on average in the past, therefore cash runway is not a concern.

Forecast Cash Runway: DXC has been profitable on average in the past, therefore cash runway is not a concern.


Next Steps

Dividend

What is DXC Technology's current dividend yield, its reliability and sustainability?

2.73%

Current Dividend Yield


Dividend Yield vs Market

company2.7%marketbottom25%1.4%markettop25%3.7%industryaverage1.2%forecastin3Years2.7%

Current dividend yield vs market & industry

Notable Dividend: DXC's dividend (2.73%) is higher than the bottom 25% of dividend payers in the US market (1.44%).

High Dividend: DXC's dividend (2.73%) is low compared to the top 25% of dividend payers in the US market (3.68%).


Stability and Growth of Payments

Stable Dividend: DXC's dividend payments have been volatile in the past 10 years.

Growing Dividend: DXC's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: DXC is paying a dividend but the company is unprofitable.


Future Payout to Shareholders

Future Dividend Coverage: DXC's dividends in 3 years are forecast to be thoroughly covered by earnings (13% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

2.8yrs

Average management tenure


CEO

Mike Salvino (54yo)

0.4yrs

Tenure

0

Mr. Michael J. Salvino, also known as Mike, serves as President and Chief Executive Officer of DXC Technology Company since September 12, 2019. Mr. Salvino served as a Managing Director since September 201 ...


Leadership Team

NamePositionTenureCompensationOwnership
Michael Salvino
CEO, President & Director0.4yrsno data0.00035% $27.4k
Paul Saleh
Executive VP & CFO2.8yrsUS$7.71m0.067% $5.3m
William Deckelman
Executive VP2.8yrsUS$2.95m0.025% $1.9m
James Smith
Executive VP of Digital Transformation & Customer Advocacy0yrsUS$3.61m0.023% $1.8m
Edward Ho
Executive VP & GM of Americas2.1yrsUS$3.56m0.00080% $62.6k
Neil Manna
Senior VP2.8yrsno data0.0029% $224.4k
Dan Hushon
CTO & Senior VP7yrsno datano data
Chris Drumgoole
Executive VP & Chief Information Officer0.08yrsno datano data
Shailesh Murali
Head of M&A and Investor Relations0yrsno datano data
Chris Depippo
Vice President of Ethics0yrsno datano data

2.8yrs

Average Tenure

54.5yo

Average Age

Experienced Management: DXC's management team is considered experienced (2.8 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Michael Salvino
CEO, President & Director0.4yrsno data0.00035% $27.4k
David Herzog
Independent Chairman0.08yrsUS$331.66k0.0023% $182.2k
Robert Woods
Independent Director2.8yrsUS$301.66k0.0064% $503.6k
Arthur Money
Member of Cyber Advisory Committee10.4yrsno datano data
Peter Rutland
Lead Independent Director2.8yrsUS$346.66k0.0058% $455.1k
Sachin Lawande
Independent Director2.8yrsUS$301.66k0.0062% $482.5k
John Gordon
Member of Cyber Advisory Committee10.4yrsno datano data
Michael Hayden
Member of Cyber Advisory Committee10.4yrsno datano data
Mukesh Aghi
Independent Director2.8yrsUS$326.66k0.0059% $462.9k
Manoj Singh
Independent Director2.8yrsUS$327.94k0.0023% $180.6k

2.8yrs

Average Tenure

63.5yo

Average Age

Experienced Board: DXC's board of directors are not considered experienced ( 2.8 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

DXC Technology Company's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: DXC Technology Company
  • Ticker: DXC
  • Exchange: NYSE
  • Founded: 1959
  • Industry: IT Consulting and Other Services
  • Sector: Software
  • Market Cap: US$7.820b
  • Shares outstanding: 253.72m
  • Website: https://www.dxc.technology

Number of Employees


Location

  • DXC Technology Company
  • 1775 Tysons Boulevard
  • Tysons
  • Virginia
  • 22102
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
DXCNYSE (New York Stock Exchange)YesCommon StockUSUSDJan 1968
2XTDB (Deutsche Boerse AG)YesCommon StockDEEURJan 1968
DXC *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNJan 1968
0I6ULSE (London Stock Exchange)YesCommon StockGBUSDJan 1968
D1XC34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH REPR 1 COMBRBRLDec 2019

Biography

DXC Technology Company, together with its subsidiaries, provides information technology services and solutions primarily in North America, Europe, Asia, and Australia. It operates in two segments, Global Business Services (GBS) and Global Infrastructure Services (GIS). The GBS segment offers technology solutions comprising enterprise, cloud application, and consulting services; application services; analytics services; business process services; and industry software and solutions. The GIS segment provides cloud and platform services; workplace, mobility, and Internet of Things services; and security solutions. The company was formerly known as Computer Sciences Corporation and changed its name to DXC Technology Company in April 2017 as a result of its merger with the Enterprise Services business of Hewlett Packard Enterprise Company. DXC Technology Company was founded in 1959 and is headquartered in Tysons, Virginia. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/16 02:41
End of Day Share Price2020/02/14 00:00
Earnings2019/12/31
Annual Earnings2019/03/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.