DXC Technology Company
Exchange: NYSESector: TechnologyIndustry: Information Technology Services
DXC Technology is a leading enterprise technology and innovation partner delivering software, services, and solutions to global enterprises and public sector organizations — helping them harness AI to drive outcomes at a time of exponential change with speed. With deep expertise in Managed Infrastructure Services, Application Modernization, and Industry-Specific Software Solutions, DXC modernizes, secures, and operates some of the world's most complex technology estates.
Current Price
$9.43
-21.48%GoodMoat Value
$118.18
1153.3% undervaluedProfile
Valuation (TTM)
Market Cap$1.60B
P/E88.94
EV$4.70B
P/B0.54
Shares Out169.76M
P/Sales0.13
Revenue$12.64B
EV/EBITDA2.41
DXC Technology Company (DXC) Stock Analysis
GoodMoat Analysis
DXC Technology appears deeply undervalued on a price-to-earnings basis, but its business fundamentals raise significant concerns. The company's negative revenue growth, low margins, and high debt suggest a weak competitive moat and poor quality profile, which likely fails the initial gate of the investment framework. The extreme disconnect between its low price and the platform's high target price makes it a compelling, albeit high-risk, subject for further investigation.
Read full analysis
DXC Technology is an IT services company providing technology consulting and outsourcing. A moat analysis using the GoodMoat framework reveals significant weaknesses. The company shows no revenue growth, with a -1.0% YoY decline, and operates on thin profit and operating margins of 3.3% and 5.4%, respectively. These metrics, combined with a high debt-to-equity ratio of 1.41, suggest the business lacks the pricing power, scale privilege, or switching costs that constitute a durable competitive advantage. A formal Moat Score would likely be low (<5), and its Quality Indicators would be predominantly 'Weak,' failing the initial 'Moat & Quality Gate' (Step 1) of the Decision Framework.
However, the valuation is extreme. The stock trades at a P/E of just 4.94x and boasts a staggering free cash flow yield of 62.7%, indicating the market prices it as a deeply troubled business. This creates a stark contrast with the GoodMoat Target price of $47.94, which implies a massive margin of safety. For a value investor, this represents a classic 'cigar butt' scenario: the price is very low, but the business itself is of poor quality. The critical question for further investigation is whether the company's challenges are permanent or if a turnaround or asset sale could unlock value far above the current market price, justifying the high-risk profile.
Analysis based on data as of 2024-05-15.
Market Cap$1.60B
Current Price$9.43
P/E Ratio88.94
Forward P/E—
PEG Ratio-0.57
EPS$0.10
Book Value$17.32
P/B Ratio0.54
DXC Financial Charts
FCF vs CAPEX
FCFCAPEX
Forward estimates use -10.4% FCF growth (CAGR)
Cash vs Debt
Net Debt: 2.5B
Revenue
19.6B
FY20
17.7B
FY21
16.3B
FY22
14.4B
FY23
13.7B
FY24
12.9B
FY25
12.6B
FY26
Net Income
—
FY20
—
FY21
718M
FY22
—
FY23
91M
FY24
389M
FY25
18M
FY26
DXC 52-Week Range
$9.43
$16.94
50-Day MA: $12.15200-Day MA: $13.47
Did you know?
Profit margin stands at 0.1%.
DXC Technology Company (DXC) Financial Summary
DXC Technology Company (DXC) is a Technology company in the Information Technology Services industry, listed on NYSE. The stock currently trades at $9.43 with a market capitalization of $1.60B.
Key valuation metrics include a P/E ratio of 88.94, price-to-book ratio of 0.54, and EPS of $0.10. The company reports a profit margin of 0.1% and return on equity of 0.6%.
DXC Key Financial Metrics
| Metric | Value |
|---|---|
| Market Cap | $1.60B |
| P/E Ratio | 88.94 |
| EPS | $0.10 |
| P/B Ratio | 0.54 |
| P/S Ratio | 0.13 |
| EV/EBITDA | 2.41 |
| Profit Margin | 0.1% |
| Return on Equity | 0.6% |
| Debt/Equity | 1.44 |
DXC Revenue & Earnings History
| Year | Revenue | Net Income |
|---|---|---|
| FY20 | $19.58B | $-5.37B |
| FY21 | $17.73B | $-149.00M |
| FY22 | $16.27B | $718.00M |
| FY23 | $14.43B | $-568.00M |
| FY24 | $13.67B | $91.00M |
| FY25 | $12.87B | $389.00M |
| FY26 | $12.64B | $18.00M |
DXC Technology Company (DXC) Valuation
Based on GoodMoat's DCF model, DXC Technology Company has a fair value estimate of $118.18. At the current price of $9.43, the stock appears 92.0% undervalued relative to our intrinsic value estimate.
DXC Quality Indicators
DXC Technology Company maintains a profit margin of 0.1% and an operating margin of 2.8%. Return on equity stands at 0.6%. The current ratio is 1.36. Debt-to-equity ratio is 1.44.
About DXC Technology Company
DXC Technology is a leading enterprise technology and innovation partner delivering software, services, and solutions to global enterprises and public sector organizations — helping them harness AI to drive outcomes at a time of exponential change with speed. With deep expertise in Managed Infrastructure Services, Application Modernization, and Industry-Specific Software Solutions, DXC modernizes, secures, and operates some of the world's most complex technology estates.
DXC Free Cash Flow
DXC Technology Company generated $1.07B in trailing twelve-month free cash flow, representing an FCF yield of 66.90%. This strong FCF yield suggests the company generates substantial cash relative to its market value.
DXC Shares Outstanding
DXC Technology Company has 0.17 billion shares outstanding at a share price of $9.43, giving it a market capitalization of $1.60B.