DXC Technology (DXC) AI Stock Analysis

• Market Cap: $2.36B
• Dividend Yield: N/A
• Average Volume (3M): 1.95M
• Price to Earnings (P/E): 6.7
• Beta (1Y): 1.00
• Revenue Growth: -4.13%
• EPS Growth: 2143.48%
• Country: US
• Employees: 130,000
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): 0.84
• Shares Outstanding: 174,133,940
• 10 Day Avg. Volume: 2,344,440
• 30 Day Avg. Volume: 1,952,118
• PEG Ratio: 0.02
• Price to Book (P/B): 0.95
• Price to Sales (P/S): 0.24
• P/FCF Ratio: 3.75
• Enterprise Value/Market Cap: 2.34
• Enterprise Value/Revenue: 0.58
• Enterprise Value/Gross Profit: 2.67
• Enterprise Value/Ebitda: 3.85
• 1Y Price Target: $14.71
• Price Target Upside: 8.64% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 7
• EPS Forecast (FY): 3.09
• Revenue Forecast (FY): $12.68B

• Rating: 62 Neutral
• Price Target: $15.00 ▲(10.78% Upside)

DXC Technology's overall stock score reflects a company in recovery mode. The most significant factor is its financial performance, with improved profitability and strong cash flow generation. Valuation is attractive due to a low P/E ratio, but technical indicators suggest caution. The earnings call highlights both opportunities in AI and challenges with revenue decline, balancing the outlook.

Positive Factors

Improved Profitability

The company's improved profitability and cash flow generation indicate better operational efficiency and financial health, which are crucial for long-term stability and growth.

AI Strategy

The focus on AI solutions positions DXC to capitalize on growing demand for AI technologies, potentially driving future revenue growth and enhancing competitive advantage.

Industry Recognition

Recognition as an industry leader enhances DXC's reputation and credibility, potentially attracting more clients and partnerships, supporting long-term business growth.

Negative Factors

Revenue Decline

Consistent revenue decline reflects challenges in maintaining market share and demand, which could impact long-term financial performance and growth prospects.

Disappointing Bookings

Lower-than-expected bookings indicate potential future revenue challenges, impacting the company's ability to sustain growth and meet financial targets.

Debt Levels

High debt levels can limit financial flexibility and increase risk, potentially affecting the company's ability to invest in growth opportunities and weather economic downturns.

DXC Technology Business Overview & Revenue Model

Company Description

DXC Technology (DXC) is a global leader in IT services and solutions, formed from the merger of Computer Sciences Corporation (CSC) and the Enterprise Services segment of Hewlett Packard Enterprise. The company operates in various sectors, including healthcare, financial services, manufacturing, and public sector, providing a comprehensive suite of services such as cloud computing, analytics, application services, enterprise service management, and cybersecurity. DXC aims to help businesses drive innovation and improve their operational efficiency through digital transformation and technology modernization.

How the Company Makes Money

DXC Technology generates revenue primarily through its IT services and solutions, which are delivered on a project basis, through managed services contracts, and via subscription models. Key revenue streams include consulting services, application development and management, cloud services, and infrastructure management. The company also benefits from long-term contracts with clients, providing stable income over extended periods. Significant partnerships with technology providers, such as Microsoft, Amazon Web Services, and Oracle, enhance DXC's service offerings and contribute to revenue growth by enabling access to advanced technologies and expanding its market reach.

DXC Technology Financial Statement Overview

Summary

DXC Technology shows signs of recovery with improved profitability and cash flow generation. Despite declining revenue, the company has managed to maintain a positive net profit margin and improve its EBIT and EBITDA margins. The balance sheet is stabilizing with reduced leverage, although there is still some risk due to debt levels. Strong cash flow generation is a positive indicator of financial health.

Income Statement

DXC Technology's income statement shows a mixed performance. The company has experienced a decline in revenue over the past few years, with a TTM revenue growth rate of -8.31%. Gross profit margins have decreased, indicating pressure on cost management. However, the company has managed to maintain a positive net profit margin of 2.93% in the TTM, recovering from previous losses. The EBIT and EBITDA margins have also shown improvement, suggesting better operational efficiency.

Balance Sheet

The balance sheet reflects a moderate financial position. The debt-to-equity ratio has improved to 0.76 in the TTM, indicating a reduction in leverage. Return on equity remains stable at around 12%, which is a positive sign of profitability. However, the equity ratio is relatively low, suggesting a higher reliance on debt financing. Overall, the balance sheet shows signs of stabilization but still carries some risk due to debt levels.

Cash Flow

Cash flow analysis reveals a strong recovery in free cash flow, with a growth rate of 38% in the TTM. The operating cash flow to net income ratio is healthy, indicating good cash generation relative to earnings. The free cash flow to net income ratio is also strong at 69.42%, reflecting efficient cash management. These metrics suggest that the company is effectively converting its earnings into cash, which is a positive indicator for financial health.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	9.54B	12.87B	13.67B	14.43B	16.27B	17.73B
Gross Profit	2.06B	3.10B	3.09B	3.18B	3.58B	3.64B
EBITDA	1.43B	2.21B	1.81B	942.00M	3.17B	3.07B
Net Income	109.00M	389.00M	91.00M	-566.00M	718.00M	-146.00M
Balance Sheet
Total Assets	13.58B	13.21B	13.87B	15.85B	20.14B	22.04B
Cash, Cash Equivalents and Short-Term Investments	1.89B	1.80B	1.22B	1.86B	2.67B	2.97B
Total Debt	4.69B	4.55B	4.87B	5.37B	6.17B	6.97B
Total Liabilities	10.25B	9.71B	10.80B	12.03B	14.76B	16.73B
Stockholders Equity	3.07B	3.23B	2.81B	3.50B	5.05B	5.31B
Cash Flow
Free Cash Flow	1.02B	822.00M	954.00M	960.00M	952.00M	-391.00M
Operating Cash Flow	1.25B	1.40B	1.36B	1.42B	1.50B	124.00M
Investing Cash Flow	-307.00M	-512.00M	-491.00M	-635.00M	-60.00M	4.67B
Financing Cash Flow	-314.00M	-317.00M	-1.49B	-1.51B	-1.82B	-5.48B

DXC Technology Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 13.54
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DXC, the sentiment is Neutral. The current price of 13.54 is above the 20-day moving average (MA) of 13.27, below the 50-day MA of 13.74, and below the 200-day MA of 15.70, indicating a neutral trend. The MACD of -0.04 indicates Negative momentum. The RSI at 51.09 is Neutral, neither overbought nor oversold. The STOCH value of 49.34 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for DXC.

DXC Technology Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CTSH	80 Outperform	$35.14B	16.88	14.50%	1.72%	7.44%	-4.57%
EPAM	77 Outperform	$8.83B	22.59	11.36%	―	9.73%	-0.29%
INFY	74 Outperform	$68.75B	20.65	29.15%	3.19%	4.62%	1.06%
G	71 Outperform	$6.70B	12.75	21.86%	1.74%	7.37%	-14.64%
DXC	62 Neutral	$2.36B	6.69	12.33%	―	-4.13%	2143.48%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
KD	56 Neutral	$6.34B	22.43	26.55%	―	-3.44%	―

DXC Technology Corporate Events

DXC Technology’s Mixed Earnings Call: AI Gains Amid Revenue Challenges

In a recent earnings call, DXC Technology Company presented a mixed performance, reflecting both promising advancements and significant challenges. The company showcased strong free cash flow and notable progress in its AI strategy and fast track initiatives. However, it also faced hurdles with declining revenue, disappointing bookings, and pressure in key segments. While the positive momentum in AI and industry recognition is encouraging, the financial performance and operational challenges remain areas of concern.

DXC Technology Reports Q2 Fiscal 2026 Results

DXC Technology is a global IT services company that assists businesses in managing their critical systems and modernizing IT infrastructure, with a focus on optimizing data architectures and ensuring security across various cloud environments. In its latest earnings report for the second quarter of fiscal year 2026, DXC Technology reported a total revenue of $3.16 billion, marking a 2.5% decrease compared to the previous year, with a notable increase in free cash flow to $240 million, up by $192 million year-over-year.

DXC Technology’s Earnings Call: Growth Amid Challenges

DXC Technology’s recent earnings call painted a picture of mixed fortunes, with the company experiencing both promising developments and notable challenges. On the positive side, there was significant growth in bookings, free cash flow, and strategic partnerships. However, these were offset by declines in revenue, adjusted EBIT margin, and EPS. The company’s focus on AI integration and leadership enhancements suggests potential for future growth, though current financial hurdles temper the overall optimism.