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DXC Technology (DXC)
NYSE:DXC
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DXC Technology
(NYSE:DXC)
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Rating:71Outperform
Price Target:
$16.00
▲(12.12% Upside)
DXC Technology's overall stock score is driven by its financial recovery, with improved profitability and reduced leverage being significant strengths. The stock's valuation suggests it may be undervalued, providing potential upside. However, technical indicators show a neutral trend, and ongoing revenue declines pose challenges.
Positive Factors
Debt Reduction
Significant debt reduction enhances financial stability and flexibility, allowing DXC to invest in growth opportunities and weather economic uncertainties.
AI Leadership
Recognition in AI leadership positions DXC as a competitive player in a rapidly growing sector, potentially driving future revenue and client acquisition.
Improved Cash Flow
Improved free cash flow indicates effective capital management, providing resources for strategic investments and enhancing shareholder value.
Negative Factors
Revenue Decline
Ongoing revenue decline suggests challenges in market competitiveness and demand, potentially impacting long-term growth and profitability.
Adjusted EBIT Margin Decrease
A decrease in EBIT margin indicates pressure on operational efficiency, which could affect profitability if not addressed through cost management or revenue growth.
Deferred GIS Deals
Deferral of large deals in the GIS segment may lead to short-term revenue gaps and signal potential issues in client acquisition or retention strategies.
DXC Technology (DXC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.50B
Dividend YieldN/A
Average Volume (3M)1.65M
Price to Earnings (P/E)6.8
Beta (1Y)0.97
Revenue Growth-4.93%
EPS Growth497.03%
CountryUS
Employees130,000
SectorTechnology
Sector Strength88
IndustryInformation Technology Services
Share Statistics
EPS (TTM)0.68
Shares Outstanding178,998,670
10 Day Avg. Volume1,712,437
30 Day Avg. Volume1,646,214
Financial Highlights & Ratios
PEG Ratio0.02
Price to Book (P/B)0.95
Price to Sales (P/S)0.24
P/FCF Ratio3.75
Enterprise Value/Market Cap2.43
Enterprise Value/Revenue0.48
Enterprise Value/Gross Profit1.93
Enterprise Value/Ebitda2.82
Forecast
1Y Price Target
$15.38Price Target Upside7.78% Upside
Rating ConsensusHold
Number of Analyst Covering9
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 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 Key Performance Indicators (KPIs)
DXC Technology Earnings Call Summary
Earnings Call Date:Jul 31, 2025
(Q1-2026)
| % Change Since: |
Next Earnings Date:Oct 29, 2025
Earnings Call Sentiment Neutral
The earnings call presented a balanced view with strong bookings growth and recognition in AI leadership as positives. However, the revenue decline and challenges in the GIS segment, along with a decrease in adjusted EBIT margin, indicate areas needing improvement. Overall, the company shows potential for growth, but current challenges suggest a neutral outlook.Q1-2026 Updates
Positive Updates
Bookings Growth and Strong Pipeline
Bookings increased 14% year-over-year, marking the third consecutive quarter of double-digit growth, with a trailing 12-month book-to-bill ratio of 1.06. Strong bookings in Europe and Asia Pacific driven by public sector strength.
Recognition as Emerging AI Leader
DXC was recognized by Gartner as an Emerging Leader in Generative AI Consulting and Implementation Services, highlighting the strength of their AI capabilities.
Strategic Partnerships and AI Integration
DXC entered a strategic partnership with Boomi to enhance AI-driven integration automation, improving end-to-end connectivity for clients.
Improved Free Cash Flow
Free cash flow increased to $97 million from $45 million in the previous year, driven by lower capital requirements and efficient capital management.
Positive Internal AI Implementation
Internal use of AI has resulted in significant operational improvements, including a 70% reduction in security investigation time and a 30% reduction in marketing content creation time.
Negative Updates
Revenue Decline
Total revenue declined 4.3% year-to-year on an organic basis, with CES and GIS segments showing year-over-year declines of 4.4% and 5.7% respectively.
Adjusted EBIT Margin Decrease
Adjusted EBIT margin decreased slightly by 10 basis points year-over-year to 6.8%.
Non-GAAP EPS Decline
Non-GAAP EPS fell from $0.75 last year to $0.68, mainly due to lower adjusted EBIT and higher taxes.
Deferred GIS Deals
Bookings for GIS were affected by the deferral of several large deals, resulting in a book-to-bill ratio of 0.7 for the quarter.
Company Guidance
During the call, DXC Technology provided guidance for the second quarter and full fiscal year 2026, highlighting several key metrics. The company expects total organic revenue to decline between 3% and 5% for the fiscal year, with reported revenue projected to be between $12.6 billion and $12.9 billion, benefiting from currency tailwinds. The adjusted EBIT margin is anticipated to be between 7% and 8%, while non-GAAP diluted EPS is expected to range from $2.85 to $3.35, reflecting an increase from the prior guide due to higher revenue projections. For the second quarter, DXC forecasts organic revenue to decline 3.5% to 4.5%, with an adjusted EBIT margin of 6.5% to 7.5% and non-GAAP diluted EPS between $0.65 and $0.75. The company also aims to generate approximately $600 million in free cash flow for the full year, emphasizing their confidence in achieving these targets despite economic uncertainties.DXC Technology Financial Statement Overview
Summary
DXC Technology's financial performance is improving with better profitability, reduced leverage, and strong cash flow management. However, the consistent decline in revenue remains a concern despite positive margins and reduced debt levels.Income Statement
DXC Technology has shown a consistent decline in revenue over the past several years, with a noticeable drop from $19.58 billion in 2020 to $12.87 billion in 2025. The gross profit margin has remained stable, but the net profit margin has improved significantly from a loss to 3.02% in 2025, indicating better cost management and operational efficiency. EBIT and EBITDA margins have been volatile, but recent improvements signal a positive trend.68
Positive
Balance Sheet
The company's balance sheet shows a reduction in total debt from $11.49 billion in 2020 to $1.55 billion in 2025, significantly improving the debt-to-equity ratio. Stockholders' equity has increased, leading to a healthier equity ratio and enhancing financial stability. However, the total assets have decreased over the years, which might limit future growth opportunities.72
Positive
Cash Flow
DXC Technology's cash flow from operations has remained strong, with a noticeable improvement in free cash flow, now at $1.15 billion in 2025. The free cash flow to net income ratio is robust, indicating efficient cash generation relative to net earnings. The company has effectively managed capital expenditures, contributing to positive free cash flow growth.75
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 12.79B | 12.87B | 13.67B | 14.43B | 16.27B | 17.73B |
| Gross Profit | 3.16B | 3.10B | 3.09B | 3.18B | 3.58B | 3.64B |
| EBITDA | 2.17B | 2.21B | 1.81B | 942.00M | 3.17B | 3.07B |
| Net Income | 379.00M | 389.00M | 91.00M | -566.00M | 718.00M | -146.00M |
Balance Sheet | ||||||
| Total Assets | 13.44B | 13.21B | 13.87B | 15.85B | 20.14B | 22.04B |
| Cash, Cash Equivalents and Short-Term Investments | 1.79B | 1.80B | 1.22B | 1.86B | 2.67B | 2.97B |
| Total Debt | 4.80B | 4.55B | 4.87B | 5.37B | 6.17B | 6.97B |
| Total Liabilities | 10.01B | 9.71B | 10.80B | 12.03B | 14.76B | 16.73B |
| Stockholders Equity | 3.17B | 3.23B | 2.81B | 3.50B | 5.05B | 5.31B |
Cash Flow | ||||||
| Free Cash Flow | 742.00M | 822.00M | 954.00M | 960.00M | 952.00M | -391.00M |
| Operating Cash Flow | 1.03B | 1.40B | 1.36B | 1.42B | 1.50B | 124.00M |
| Investing Cash Flow | -232.00M | -512.00M | -491.00M | -635.00M | -60.00M | 4.67B |
| Financing Cash Flow | -408.00M | -317.00M | -1.49B | -1.51B | -1.82B | -5.48B |
DXC Technology Technical Analysis
Positive
14.27
Price Trends
14.06
Positive
14.80
Negative
16.94
Negative
Market Momentum
0.02
Positive
51.55
Neutral
26.50
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DXC, the sentiment is Positive. The current price of 14.27 is above the 20-day moving average (MA) of 14.27, above the 50-day MA of 14.06, and below the 200-day MA of 16.94, indicating a neutral trend. The MACD of 0.02 indicates Positive momentum. The RSI at 51.55 is Neutral, neither overbought nor oversold. The STOCH value of 26.50 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DXC.
DXC Technology Risk Analysis
DXC Technology disclosed 38 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 (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | 71.71B | 22.87 | 28.18% | 2.89% | 4.52% | -0.22% | |
76 Outperform | 7.28B | 13.86 | 20.81% | 1.60% | 7.37% | -14.64% | |
74 Outperform | 34.20B | 14.22 | 15.93% | 1.75% | 6.34% | 12.16% | |
71 Outperform | $2.50B | 6.82 | 12.60% | ― | -4.93% | 497.03% | |
68 Neutral | 8.55B | 22.23 | 10.94% | ― | 9.73% | -0.29% | |
61 Neutral | 7.35B | 25.74 | 23.99% | ― | -3.44% | 0.00% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
Performance Comparison
DXC
DXC Technology
14.27
-6.79
-32.24%
CTSH
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70.26
-3.78
-5.11%
EPAM
Epam Systems
155.87
-42.19
-21.30%
G
Genpact
41.30
3.38
8.91%
INFY
Infosys
17.57
-4.63
-20.86%
KD
Kyndryl Holdings Incorporation
31.48
7.73
32.55%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.