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Dxc Technology Company (DXC)
:DXC
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DXC Technology
(NYSE:DXC)
Rating:70Outperform
Price Target:
$17.50
▲(7.76%Upside)
Positive Factors
Business Development
B2B at greater than 1.0x for the first time in 7 quarters as GTM changes yield uptick in conversion and win rates.
Cost Management
Margin outperformance in the quarter is largely attributed to disciplined cost management, uplifted by a one-time benefit from equity compensation savings.
Financial Performance
Two consecutive quarters of book-to-bill greater than 1.0x in the back-half of FY25 is encouraging.
Negative Factors
Earnings Impact
The needed investments weigh on margin and this flows through to earnings per share, which is below Street expectations.
Growth Expectations
FY26 growth targets underwhelm investors and suggest a more gradual return to growth than expected.
Macro Environment
Initial FY26 guidance and 1Q forecast missed consensus, reflecting a challenging macro environment and ongoing organizational changes.
DXC Technology (DXC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.96B
Dividend YieldN/A
Average Volume (3M)1.85M
Price to Earnings (P/E)7.7
Beta (1Y)1.06
Revenue Growth-5.82%
EPS Growth469.88%
CountryUS
Employees130,000
SectorTechnology
Sector Strength87
IndustryInformation Technology Services
Share Statistics
EPS (TTM)0.84
Shares Outstanding181,960,780
10 Day Avg. Volume2,094,618
30 Day Avg. Volume1,853,923
Financial Highlights & Ratios
PEG Ratio0.01
Price to Book (P/B)0.84
Price to Sales (P/S)0.00
P/FCF Ratio3.53
Enterprise Value/Market Cap0.92
Enterprise Value/Revenue0.05
Enterprise Value/Gross Profit0.97
Enterprise Value/Ebitda0.39
Forecast
1Y Price Target
$16.71Price Target Upside2.89% Upside
Rating ConsensusHold
Number of Analyst Covering8
DXC Technology Business Overview & Revenue Model
Company DescriptionDXC Technology (DXC) is a global IT services company that helps clients harness the power of innovation to thrive on change. Operating across several sectors, including insurance, healthcare, travel, transportation, and financial services, DXC offers a comprehensive range of technology solutions. Its core services include IT outsourcing, cloud services, cybersecurity, data analytics, and application development and management. The company leverages its extensive expertise to deliver transformative digital solutions that drive business outcomes for its clients.
How the Company Makes MoneyDXC Technology generates revenue primarily through its extensive portfolio of IT services and solutions. The company's revenue model is centered around providing IT outsourcing services, including infrastructure management, application development and management, and business process services. Cloud and platform services also constitute a significant part of its earnings, as businesses increasingly migrate to cloud-based systems. Additionally, DXC earns from offering cybersecurity services and consulting, which are crucial in the digital age. Key partnerships with technology giants like Microsoft, AWS, and VMware enhance its service offerings and expand its market reach, thereby contributing significantly to its revenue streams.
DXC Technology Earnings Call Summary
Earnings Call Date:May 14, 2025
(Q4-2025)
| % Change Since: -1.93%|
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.DXC Technology Financial Statement Overview
Summary
DXC Technology shows financial recovery with improved profitability and reduced debt. Despite revenue decline, positive margins and better cash flow management highlight strategic improvements.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 | 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 | 2.78B | 3.10B | 3.09B | 3.18B | 3.58B | 3.64B |
| EBITDA | 1.61B | 2.21B | 1.81B | 942.00M | 3.17B | 3.07B |
| Net Income | -75.00M | 389.00M | 91.00M | -566.00M | 718.00M | -146.00M |
Balance Sheet | ||||||
| Total Assets | 13.03B | 13.21B | 13.87B | 15.85B | 20.14B | 22.04B |
| Cash, Cash Equivalents and Short-Term Investments | 1.72B | 1.80B | 1.22B | 1.86B | 2.67B | 2.97B |
| Total Debt | 4.50B | 1.55B | 4.87B | 5.37B | 6.17B | 6.97B |
| Total Liabilities | 9.78B | 9.71B | 10.80B | 12.03B | 14.76B | 16.73B |
| Stockholders Equity | 2.99B | 3.23B | 2.81B | 3.50B | 5.05B | 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
Neutral
16.24
Price Trends
15.51
Positive
16.44
Negative
18.73
Negative
Market Momentum
0.07
Negative
59.38
Neutral
91.33
Negative
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 16.24 is above the 20-day moving average (MA) of 15.45, above the 50-day MA of 15.51, and below the 200-day MA of 18.73, indicating a neutral trend. The MACD of 0.07 indicates Negative momentum. The RSI at 59.38 is Neutral, neither overbought nor oversold. The STOCH value of 91.33 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 (56)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $8.03B | 15.63 | 22.21% | 1.48% | 7.31% | -15.86% | |
76 Outperform | $3.03B | 16.83 | 21.21% | ― | -0.64% | 30.96% | |
73 Outperform | $3.65B | 15.69 | 5.59% | 2.33% | 11.31% | -16.02% | |
70 Outperform | $2.96B | 7.71 | 12.88% | ― | -5.82% | 469.88% | |
66 Neutral | $2.31B | 15.07 | 8.65% | ― | -8.05% | -18.60% | |
56 Neutral | HK$13.54B | 4.87 | -5.76% | 5.64% | 8.06% | -42.52% | |
52 Neutral | $10.05B | 41.92 | 22.47% | ― | -8.20% | ― |
* Technology Sector Average
Performance Comparison
DXC
DXC Technology
16.24
-2.51
-13.39%
G
Genpact
45.92
15.06
48.80%
ASGN
ASGN
52.84
-34.37
-39.41%
WNS
WNS
65.38
11.46
21.25%
CNXC
Concentrix
57.16
-7.24
-11.24%
KD
Kyndryl Holdings Incorporation
43.41
17.41
66.96%
DXC Technology Corporate Events
Executive/Board Changes
DXC Technology Approves Special Equity Awards for Executives
Neutral
May 14, 2025
On May 13, 2025, DXC Technology‘s Board of Directors approved special one-time equity awards for CEO Raul Fernandez and CFO Robert Del Bene, aimed at retaining their leadership for an additional three years. These awards, primarily performance-based, are designed to align executive interests with shareholders and incentivize long-term company performance by tying compensation to key financial metrics and shareholder returns.
The most recent analyst rating on (DXC) stock is a Sell with a $22.00 price target. To see the full list of analyst forecasts on DXC Technology stock, see the DXC Stock Forecast page.
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.