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DXC Technology (DXC)
NYSE:DXC
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DXC Technology
(NYSE:DXC)
46Neutral
Positive Factors
Bookings and Growth
Two consecutive quarters of book-to-bill >1.0x in the back-half of FY25 is encouraging.
Cost Management
Margin outperformance in the quarter is largely attributed to disciplined cost management, uplifted by a one-time +50bp benefit from equity compensation savings.
Negative Factors
Earnings and Margins
The needed investments weigh on margin and this flows through to earnings per share, which is below Street expectations.
Growth Guidance
Lower-than-expected FY26 growth guidance could indicate potential deal pushouts in response to macroeconomic pressure.
Organizational Challenges
Management acknowledged that needed rebuild across functions remains 'extensive', indicating ongoing challenges within the organization.
DXC Technology (DXC) vs. S&P 500 (SPY)
Market Cap
$2.77B
Dividend YieldN/A
Average Volume (3M)1.66M
Price to Earnings (P/E)7.2
Beta (1Y)1.06
Revenue Growth-5.65%
EPS Growth78.20%
CountryUS
Employees130,000
SectorTechnology
Sector Strength76
IndustryInformation Technology Services
Share Statistics
EPS (TTM)0.84
Shares Outstanding181,266,300
10 Day Avg. Volume1,790,994
30 Day Avg. Volume1,655,304
Financial Highlights & Ratios
PEG Ratio0.01
Price to Book (P/B)0.79
Price to Sales (P/S)0.00
P/FCF Ratio3.30
Enterprise Value/Market Cap0.91
Enterprise Value/Revenue0.05
Enterprise Value/Gross Profit1.03
Enterprise Value/Ebitda0.22
Forecast
1Y Price Target
$16.50Price Target Upside8.06% Upside
Rating ConsensusHold
Number of Analyst Covering7
DXC Technology Business Overview & Revenue Model
Company DescriptionDXC 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 a portfolio of analytics services and extensive partner ecosystem that help its customers to gain rapid insights, automate operations, and accelerate their digital transformation journeys; and software engineering, consulting, and data analytics solutions that enable businesses to run and manage their mission-critical functions, transform their operations, and develop new ways of doing business. It also uses various technologies and methods to accelerate the creation, modernization, delivery, and maintenance of secure applications allowing customers to innovate faster while reducing risk, time to market, and total cost of ownership. In addition, this segment offers business process services, which include integration and optimization of front and back office processes, and agile process automation. The GIS segment adapts legacy apps to cloud, migrate the right workloads, and securely manage their multi-cloud environments; and offers security solutions help predict attacks, proactively respond to threats, and ensure compliance, as well as to protect data, applications, and infrastructure. It also provides IT outsourcing services to help customers securely and cost-effectively run mission-critical systems and IT infrastructure. In addition, this segment offers workplace services to fit its customer's employee, business, and IT needs from intelligent collaboration; and modern device management, digital support services, and mobility services. DXC Technology Company is headquartered in Ashburn, Virginia.
How the Company Makes MoneyDXC Technology makes money primarily through its comprehensive portfolio of IT services and solutions. The company's revenue streams include IT outsourcing, where it manages clients' IT infrastructure and operations, and consulting services, which provide strategic guidance and implementation support for digital transformation. Additionally, DXC generates income from its cloud and platform services, offering clients cloud migration, management, and optimization solutions. The company also earns revenue from application services, which involve application development, modernization, and maintenance. Significant partnerships with technology providers and industry alliances enhance DXC's offerings and contribute to its earnings by expanding its reach and capabilities in delivering advanced solutions to its clients.
DXC Technology Financial Statement Overview
Summary
DXC Technology faces significant challenges in profitability and revenue growth, as reflected in its income statement. The balance sheet reflects a manageable debt level, but overall financial stability could be threatened by ongoing profit issues. Cash flow performance is mixed, with strong operating cash flow but inconsistent free cash flow growth.Income Statement
DXC Technology exhibits declining revenue trends, with a negative net profit margin for the TTM, indicating challenges in profitability. The gross profit margin is negative, suggesting cost control issues. Positive EBITDA margin indicates some operational efficiency.40
Negative
Balance Sheet
The company has a moderate debt-to-equity ratio, which could indicate manageable leverage but poses potential risk if profitability issues persist. Return on equity is weak, reflecting poor net income performance. However, the equity ratio is reasonable, indicating a stable proportion of equity financing.50
Neutral
Cash Flow
DXC shows a positive operating cash flow, which is a good sign of core business strength. However, free cash flow growth has been inconsistent, and the operating cash flow to net income ratio indicates discrepancies between cash generation and accounting profitability.55
Neutral
| Breakdown | |||||
| TTM | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 13.09B | 12.87B | 13.67B | 14.43B | 16.27B | 17.73B | Gross Profit |
| 2.46B | 0.00 | 3.09B | 3.18B | 3.58B | 3.64B | EBIT |
| 532.00M | 0.00 | 466.00M | -659.00M | 1.60B | -397.00M | EBITDA |
| 1.61B | 2.17B | 1.81B | 942.00M | 3.17B | 3.07B | Net Income Common Stockholders |
| -75.00M | 389.00M | 91.00M | -566.00M | 718.00M | -146.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 1.72B | 1.80B | 1.22B | 1.86B | 2.67B | 2.97B | Total Assets |
| 13.03B | 13.21B | 13.87B | 15.85B | 20.14B | 22.04B | Total Debt |
| 4.50B | 1.55B | 4.87B | 5.37B | 6.17B | 6.97B | Net Debt |
| 2.78B | -245.00M | 3.64B | 3.51B | 3.50B | 4.00B | Total Liabilities |
| 9.78B | 9.71B | 10.80B | 12.03B | 14.76B | 16.73B | Stockholders Equity |
| 2.99B | 3.23B | 2.81B | 3.82B | 5.38B | 5.31B |
| Cash Flow | Free Cash Flow | ||||
| 838.00M | 1.15B | 954.00M | 960.00M | 952.00M | -391.00M | Operating Cash Flow |
| 1.36B | 1.40B | 1.36B | 1.42B | 1.50B | 124.00M | Investing Cash Flow |
| -467.00M | -512.00M | -491.00M | -635.00M | -60.00M | 4.67B | Financing Cash Flow |
| -867.00M | -317.00M | -1.49B | -1.51B | -1.82B | -5.48B |
DXC Technology Technical Analysis
Negative
15.27
Price Trends
16.11
Negative
18.19
Negative
19.48
Negative
Market Momentum
0.05
Negative
43.58
Neutral
56.87
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DXC, the sentiment is Negative. The current price of 15.27 is below the 20-day moving average (MA) of 15.68, below the 50-day MA of 16.11, and below the 200-day MA of 19.48, indicating a bearish trend. The MACD of 0.05 indicates Negative momentum. The RSI at 43.58 is Neutral, neither overbought nor oversold. The STOCH value of 56.87 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DXC.
DXC Technology Risk Analysis
DXC Technology disclosed 40 risk factors in its most recent earnings report. DXC Technology reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
DXC Technology Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $7.73B | 15.04 | 22.21% | 1.42% | 7.31% | -15.86% | |
74 Outperform | $3.59B | 14.08 | 6.34% | 2.31% | 21.67% | -17.91% | |
72 Outperform | $2.60B | 14.41 | 21.21% | ― | -0.64% | 30.96% | |
66 Neutral | $2.48B | 16.15 | 8.65% | ― | -8.05% | -18.60% | |
60 Neutral | $11.59B | 10.39 | -7.23% | 2.94% | 7.46% | -10.76% | |
52 Neutral | $9.41B | 39.12 | 12.09% | ― | -8.20% | ― | |
46 Neutral | $2.77B | 7.25 | 12.88% | ― | -5.65% | 78.20% |
* Technology Sector Average
Performance Comparison
DXC
DXC Technology
15.27
-0.94
-5.80%
G
Genpact
44.19
10.35
30.59%
ASGN
ASGN
56.63
-43.24
-43.30%
WNS
WNS
55.96
3.94
7.57%
CNXC
Concentrix
56.22
-8.24
-12.78%
KD
Kyndryl Holdings Incorporation
40.46
12.62
45.33%
DXC Technology Earnings Call Summary
Earnings Call Date:May 14, 2025
(Q4-2025)
| % Change Since: -7.79%|
Next Earnings Date:Jul 30, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed performance for DXC Technology, with significant achievements in bookings and strategic initiatives, including key leadership alignments and a major contract win with Carnival Cruise Line. However, these positive developments were offset by continued revenue declines, profit margin reductions, and conservative fiscal 2026 guidance, reflecting ongoing challenges in certain segments and market conditions.Q4-2025 Updates
Positive Updates
Increase in Bookings
DXC Technology reported a significant increase in bookings, up more than 20% year-over-year, resulting in a book-to-bill ratio of 1.2. The second half of the year saw a bookings growth rate of 24%.
Leadership Stability and Strategic Alignment
DXC Technology announced equity grants to ensure the continued leadership of Raul Fernandez and Rob Del Bene through fiscal year 2028, aligning compensation with long-term shareholder value creation.
Carnival Cruise Line Win
DXC Technology secured a critical infrastructure management contract with Carnival Cruise Line, highlighting its capabilities and competitive advantage.
Strong Full Year Book-to-Bill Ratio
For the full fiscal year 2025, DXC achieved a book-to-bill ratio of 1.03, indicating a strong performance in securing contracts relative to revenue.
Focus on AI Capabilities
DXC Technology emphasized its strategic positioning to leverage AI, with early but strong track records in client base transformations.
Improved Free Cash Flow Management
DXC Technology reported free cash flow of $687 million, above expectations, driven by better working capital management and lower restructuring spend.
Negative Updates
Revenue Decline
Fourth quarter revenue declined 4.2% year-over-year on an organic basis, with total revenue for the fiscal year down 4.6%.
Decline in Profit Margins
Adjusted EBIT margin for the fourth quarter was 7.3%, down 110 basis points year-over-year, driven by investments in the workforce and sales force.
Continued Challenges in GIS Segment
The GIS segment experienced a revenue decline of 6% year-over-year organically, although this was an improvement over previous declines.
Negative Revenue Guidance for Fiscal 2026
DXC Technology expects total organic revenue to decline by 3% to 5% in fiscal year 2026.
Lower Earnings Per Share
Non-GAAP EPS for the fourth quarter was $0.84, down from $0.97 in the previous year.
Company Guidance
During the DXC Technology Fourth Quarter and Fiscal Year End 2025 Earnings Call, the company provided guidance for fiscal 2026, projecting organic revenue to decline between 3% to 5%, with GBS expected to decrease by low single digits and GIS by mid-single digits. Adjusted EBIT margin is anticipated to be between 7% and 8%, while non-GAAP diluted EPS is forecasted to range from $2.75 to $3.25. The company also expects free cash flow for fiscal 2026 to be around $600 million, reflecting EBIT guidance and increased restructuring spending. For the first quarter of fiscal 2026, DXC forecasts organic revenue to decline by 4.0% to 5.5% and anticipates an adjusted EBIT margin between 6% and 7%, with non-GAAP diluted EPS expected to be between $0.55 and $0.65. The company is focusing on investing in sales, marketing, and new leadership to drive sustainable, profitable growth, and plans to return $150 million to shareholders through share repurchases.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.