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DXC Technology Co (DXC) Stock

DXC Technology Co Stock Details, Movements and Public Alerts

DXC Technology Co (DXC): The $3 Billion IT Services Turnaround Story Trading at 6.6x P/E

Under CEO Raul Fernandez's leadership since late 2023, DXC Technology is executing a comprehensive turnaround after years of underperformance post-merger integration struggles. Fernandez—former private equity investor and entrepreneur who built multiple IT services companies—brings operational focus and urgency. His priorities include portfolio rationalization (exiting low-margin commodity businesses), sales force transformation (addressing chronic revenue decline), margin improvement (targeting 10%+ EBIT from current 7%), and debt reduction (paying down $4 billion term loan). DXC's service portfolio spans cloud transformation (DXC Modern Workplace, DXC Cloud Right), application modernization, IT outsourcing, security services, and analytics/engineering—serving 6,000+ customers including major banks, insurers, manufacturers, and government agencies requiring mission-critical IT infrastructure.

52-Week Range

$23.75 - $12.24

-45.43% from high · +5.88% from low

Avg Daily Volume

2,168,901

20-day average

100-day avg: 1,883,855

Fundamentals

Valuation Metrics

P/E Ratio (TTM)

6.59

Below market average

Forward P/E

4.78

Earnings expected to grow

PEG Ratio

0.28

Potentially undervalued

Price to Book

0.78

EV/EBITDA

2.42

EPS (TTM)

$2.02

Price to Sales

0.18

Beta

1.09

Similar volatility to market

How is DXC valued relative to its earnings and growth?
DXC Technology Co trades at a P/E ratio of 6.59, which is below the market average of approximately 20. This lower valuation could indicate the market has modest growth expectations, or it might represent an undervalued opportunity if the fundamentals are strong. Looking ahead, the forward P/E of 4.78 is lower than the current P/E, indicating analysts expect earnings to grow over the next year. The PEG ratio of 0.28 suggests the stock may be undervalued relative to its growth rate.
What is DXC's risk profile compared to the market?
With a beta of 1.09, DXC Technology Co is roughly as volatile as the market, moving in line with broad market trends. This moderate beta suggests the stock offers market-level returns without excessive volatility. The price-to-book ratio of 0.78 indicates the stock trades below its accounting value, which could signal value or distress.

Performance & Growth

Profit Margin

2.93%

Operating Margin

5.09%

EBITDA

$1.91B

Return on Equity

11.70%

Return on Assets

3.91%

Revenue Growth (YoY)

-2.50%

Earnings Growth (YoY)

-13.00%

How profitable and efficient is DXC's business model?
DXC Technology Co achieves a profit margin of 2.93%, meaning it retains $2.93 from every $100 in revenue after all expenses. This relatively low margin suggests the company operates in a competitive environment or high-cost industry where profitability is challenging. The operating margin of 5.09% reveals how efficiently the company runs its core business operations before interest and taxes. With ROE at 11.70% and ROA at 3.91%, the company achieves moderate returns on invested capital.
What are DXC's recent growth trends?
DXC Technology Co's revenue declined by 2.50% year-over-year, indicating challenges in maintaining sales momentum. This contraction may reflect market headwinds, competitive pressures, or strategic transitions. Earnings decreased by 13.00% year-over-year, reflecting the bottom-line impact of business performance. These growth metrics should be evaluated against INFORMATION TECHNOLOGY SERVICES industry averages for proper context.

Company Size & Market

Market Cap

$2.3B

Revenue (TTM)

$12.71B

Revenue/Share (TTM)

$70.57

Shares Outstanding

174.13M

Book Value/Share

$17.60

Asset Type

Common Stock

What is DXC's market capitalization and position?
DXC Technology Co has a market capitalization of $2.3B, classifying it as a mid-cap stock ($2B-$10B). Mid-caps often represent companies in their growth phase, offering higher growth potential than large-caps but with more stability than small-caps. They can be attractive takeover targets and may become tomorrow's large-caps. With 174.13M shares outstanding, the company's ownership is relatively concentrated. As a participant in the INFORMATION TECHNOLOGY SERVICES industry, it competes with other firms in this sector.
How does DXC's price compare to its book value?
DXC Technology Co's book value per share is $17.60, while the current stock price is $12.96, resulting in a price-to-book (P/B) ratio of 0.74. Trading below book value can indicate the market perceives challenges ahead, or it might represent a value opportunity if the assets are quality and earnings can recover. Value investors often screen for P/B ratios below 1.0. As a common stock, this represents equity ownership with voting rights.

Analyst Ratings

Analyst Target Price

$14.50

11.88% upside potential

Analyst Recommendations

Strong Buy

0

Buy

0

Hold

7

Sell

1

Strong Sell

1

How reliable are analyst predictions for DXC?
9 analysts cover DXC with 0% recommending buy/strong buy ratings. Analyst predictions have mixed reliability - studies show consensus rarely beats market returns consistently. The bearish sentiment could create opportunity if analysts are wrong. The consensus target of $14.50 implies 11.9% upside, but targets are often adjusted to follow price moves rather than predict them.
What is the Wall Street consensus on DXC?
Current analyst recommendations:007 Hold, 1 Sell, 1 Strong Sell. The bearish sentiment indicates concerns, but contrarian investors sometimes find opportunities when Wall Street is negative.Remember that analyst opinions often lag price movements and can be influenced by investment banking relationships.

Fundamentals last updated: Nov 15, 2025, 02:05 AM

Technical Indicators

RSI (14-day)

43.54

Neutral

50-Day Moving Average

$13.59

-4.64% below MA-50

200-Day Moving Average

$15.39

-15.79% below MA-200

MACD Line

-0.04

MACD Signal

-0.03

MACD Histogram

-0.02

Bearish

What does DXC's RSI value tell investors?
The RSI (Relative Strength Index) for DXC is currently 43.54, indicating the stock is in neutral territory (40-60 range). Neither buyers nor sellers have clear control, suggesting consolidation or balanced market forces. Combined with the price being below the 50-day moving average, this confirms bearish conditions.
How should traders interpret DXC's MACD and moving average crossovers?
MACD analysis shows the MACD line at -0.04 below the signal line at -0.03, with histogram at -0.02. This bearish crossover indicates downward pressure. The narrow histogram suggests a potential trend change ahead. The 50-day MA ($13.59) is below the 200-day MA ($15.39), forming a death cross pattern that often warns of extended weakness. Price is currently below both MAs, confirming weakness.

Indicators last updated: Nov 17, 2025, 12:39 AM

Active Alerts

Alert Condition
Price falls below
Threshold
$12.00
Created
Oct 3, 2025, 08:22 AM

DXC Technology Co (DXC) Stock Analysis 2025: Complete Investment Guide

When Raul Fernandez took DXC's helm in late 2023, he inherited a troubled legacy: DXC formed from 2017 CSC-HPE Enterprise Services merger never achieved promised synergies, suffering years of revenue decline, margin compression, and serial restructuring charges. Fernandez's challenge: stabilize revenue erosion, improve operational execution, and restore investor credibility. Early signs show promise—DXC narrowed revenue decline to mid-single digits while expanding margins 100+ basis points. For deep value investors, DXC's 6.6x P/E valuation prices in terminal decline despite $12 billion revenue base, Fortune 500 customer relationships, and potential for margin normalization. This is speculative turnaround requiring sector expertise and risk tolerance—not widow-and-orphan holding.

Business Model & Competitive Moat

DXC generates revenue through multi-year IT services contracts providing application development/maintenance, infrastructure outsourcing, cloud migration, cybersecurity, and business process services. The business model emphasizes long-term relationships—typical contracts span 3-7 years with annual renewal options—creating recurring revenue visibility. DXC's competitive positioning: second-tier IT services provider behind Accenture, IBM, Cognizant but larger than niche specialists. Competitive moats include customer switching costs (deep infrastructure integration creating exit barriers), security clearances for government work, offshore delivery capabilities (India, Philippines labor arbitrage), and industry vertical expertise (banking, insurance, healthcare). However, commodity nature of much IT outsourcing limits pricing power while cloud shift toward hyperscale providers (AWS, Azure, Google) reduces demand for traditional hosting/infrastructure services.

Financial Performance

  • •Revenue: $12.5 billion declining mid-single digits annually from customer attrition and portfolio exits
  • •Profitability: 7% EBIT margin compressed from 10%+ historically, targeting recovery to 9-10%
  • •Free Cash Flow: $900M annually supporting debt reduction and potential share buybacks
  • •Book Value: $8 billion vs. $3 billion market cap suggesting asset value if liquidated
  • •Valuation: 6.6x P/E (5x forward) reflects terminal decline fears despite stabilization efforts

Growth Catalysts

  • •Revenue Stabilization: Slowing decline from -8% to -3% would re-rate valuation 30-50%
  • •Margin Expansion: Achieving 10%+ EBIT (vs. 7% current) adds $350M+ annual earnings
  • •Portfolio Simplification: Exiting low-margin businesses improving overall profitability mix
  • •AI Services Demand: Enterprise AI adoption requiring professional services (integration, training)
  • •Debt Reduction: $4B term loan paydown reducing interest expense and bankruptcy concerns

Risks & Challenges

  • •Continued Revenue Decline: Customer losses accelerating versus stabilizing invalidating turnaround thesis
  • •Execution Risk: Raul Fernandez unproven as public company CEO despite private equity background
  • •Competitive Pressure: Accenture, Cognizant winning share through superior delivery and digital capabilities
  • •Debt Burden: $4B debt creating bankruptcy risk if operating performance deteriorates further
  • •Cloud Disruption: Hyperscale migration reducing demand for traditional infrastructure outsourcing

Competitive Landscape

DXC competes in the fragmented $1+ trillion global IT services market against consulting firms (Accenture, Deloitte, PwC), legacy IT services (IBM, Cognizant, Infosys), cloud specialists (Rackspace, Cloudflare), and India-based offshore providers (Tata Consultancy, Wipro, HCL). DXC occupies uncomfortable middle ground—too small versus Accenture's scale and brand, lacking offshore cost structure of Indian competitors, missing cloud-native capabilities of digital specialists. Competitors gain share: Accenture growing mid-single digits capturing digital transformation budgets, Cognizant winning legacy modernization deals, Indian offshore providers undercutting on price. DXC's differentiation attempts focus on industry vertical depth (insurance, banking expertise) and government security clearances, though neither creates sustainable moat. The turnaround requires demonstrating execution credibility—revenue stabilization, margin improvement, customer retention—before investors reward with multiple expansion. Similar predecessors (Unisys, Xerox) spent decades in value traps despite repeated restructuring.

Who Is This Stock Suitable For?

Perfect For

  • ✓Deep value investors seeking extreme discount with turnaround expertise
  • ✓Contrarian portfolios betting on management execution vs. market pessimism
  • ✓Special situations specialists analyzing restructuring/asset value plays
  • ✓Risk-tolerant allocators (maximum 1-2% position sizing given execution risk)

Less Suitable For

  • ✗Growth investors (revenue declining, not growing)
  • ✗Income investors (no dividend, cash flow directed at debt reduction)
  • ✗Risk-averse portfolios (debt burden, execution risk, competitive pressure)
  • ✗ESG investors (minimal ESG disclosure, legacy tech services model)

Investment Thesis

DXC Technology merits a SPECULATIVE BUY rating exclusively for deep value specialists with IT services sector expertise. The 6.6x P/E valuation (5x forward)—75% discount to tech sector—prices in terminal decline despite $12 billion revenue base and 6,000+ enterprise customers. Raul Fernandez brings operational urgency lacking under prior management, while early margin progress (expanding from 6% to 7%+ EBIT) demonstrates traction. The bull case requires revenue stabilization (decline moderating to -2% by 2026) plus margin recovery to 10% creating $1.2B EBIT—justifying $6-8 billion market cap (2x-2.5x current). Near-term catalysts include asset sales (divesting non-core businesses), debt paydown (reducing bankruptcy concerns), and customer wins (demonstrating competitive viability). However, this is value trap risk requiring strict discipline: if revenue decline accelerates or margins compress further, exit immediately. Position sizing critical: maximum 2% allocation given binary outcome risk. This is NOT core holding but rather asymmetric speculation on operational turnaround at distressed valuation.

Conclusion

Position as maximum 1-2% speculative allocation for value specialists only. DXC historically traded at 10-15x P/E before perpetual restructuring; current 6.6x extreme discount. Consider accumulating below 5x P/E if further selling occurs, but maintain strict stop-loss at 20% drawdown given value trap risk. The asymmetry: $12B revenue company trading at $3B market cap creates 3x-4x upside if turnaround executes versus 40% downside if decline accelerates. Requires quarterly monitoring—exit immediately if revenue decline reaccelerates or debt covenants tighten.
Bull Case
$40 (100%+ upside)
Base Case
$28 (40% upside)
Bear Case
$12 (40% downside)

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