DXC Technology Company Fundamental Analysis (NYSE: DXC)
DXC Technology Company Fundamental Analysis (NYSE: DXC)
DXC Technology Company (NYSE: DXC) shows weak financial fundamentals with a PE ratio of 14.43, profit margin of 0.99%, and ROE of 4.06%. The company generates $12.4B in annual revenue with weak year-over-year growth of -5.82%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 23.9/100 based on profitability, valuation, growth, and balance sheet metrics. The F grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze DXC's fundamental strength across five key dimensions:
Efficiency Score
WeakDXC struggles to generate sufficient returns from assets.
Valuation Score
ExcellentDXC trades at attractive valuation levels.
Growth Score
WeakDXC faces weak or negative growth trends.
Financial Health Score
ModerateDXC shows balanced financial health with some risks.
Profitability Score
WeakDXC struggles to sustain strong margins.
Key Financial Metrics
Is DXC Expensive or Cheap?
P/E Ratio
DXC trades at 14.43 times earnings. This suggests potential undervaluation.
PEG Ratio
When adjusting for growth, DXC's PEG of -0.23 indicates potential undervaluation.
Price to Book
The market values DXC Technology Company at 0.58 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at -0.28 times EBITDA. This is generally considered low.
How Well Does DXC Make Money?
Net Profit Margin
For every $100 in sales, DXC Technology Company keeps $0.99 as profit after all expenses.
Operating Margin
Core operations generate 3.41 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $4.06 in profit for every $100 of shareholder equity.
ROA
DXC Technology Company generates $0.96 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
DXC Technology Company produces operating cash flow of $1.47B, showing steady but balanced cash generation.
Free Cash Flow
DXC Technology Company generates strong free cash flow of $1.25B, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $7.69 in free cash annually.
FCF Yield
DXC converts 70.38% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
14.43
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-0.23
vs 25 benchmark
P/B Ratio
Price to book value ratio
0.58
vs 25 benchmark
P/S Ratio
Price to sales ratio
0.14
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
1.37
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.41
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.04
vs 25 benchmark
ROA
Return on assets percentage
0.010
vs 25 benchmark
ROCE
Return on capital employed
0.05
vs 25 benchmark
How DXC Stacks Against Its Sector Peers
| Metric | DXC Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 14.43 | 35.21 | Better (Cheaper) |
| ROE | 4.06% | 727.00% | Weak |
| Net Margin | 0.99% | -130589.00% (disorted) | Weak |
| Debt/Equity | 1.37 | 0.40 | Weak (High Leverage) |
| Current Ratio | 1.41 | 5.88 | Neutral |
| ROA | 0.96% | 253.00% | Weak |
DXC outperforms its industry in 1 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews DXC Technology Company's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
-5.91%
Industry Style: Growth, Innovation, High Beta
DecliningEPS CAGR
110.37%
Industry Style: Growth, Innovation, High Beta
High GrowthFCF CAGR
-14.87%
Industry Style: Growth, Innovation, High Beta
Declining