In a world increasingly driven by technology, DXC Technology Company is not just adapting to change; it’s actively shaping the future of IT services. With a robust portfolio spanning analytics, cloud migration, and cybersecurity, DXC stands at the forefront of digital transformation for businesses globally. Its commitment to innovation and quality has earned it a reputation as a trusted partner in navigating complex technological landscapes. As we dive into this investment analysis, I’ll explore whether DXC’s fundamentals still warrant its current market valuation and growth prospects.
Table of contents
Company Description
DXC Technology Company, founded in 1981 and headquartered in Ashburn, Virginia, is a prominent player in the Information Technology Services sector. With a market capitalization of approximately 2.2B, DXC operates primarily across North America, Europe, Asia, and Australia, providing a diverse array of services through its two main segments: Global Business Services (GBS) and Global Infrastructure Services (GIS). The GBS segment focuses on analytics, consulting, and software engineering, aiding clients in digital transformation, while GIS specializes in legacy app modernization and IT outsourcing. With around 130K employees, DXC is strategically positioned to innovate and streamline operations for businesses, shaping the future of IT solutions and enhancing operational efficiency in a rapidly evolving digital landscape.
Fundamental Analysis
In this section, I will analyze DXC Technology Company’s income statement, financial ratios, and dividend payout policy to gauge its financial health and investment potential.
Income Statement
The following table summarizes the income statement for DXC Technology Company over the last five fiscal years, providing insight into its financial performance.
| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue | 16.27B | 16.27B | 14.43B | 13.67B | 12.87B |
| Cost of Revenue | 12.68B | 12.68B | 11.25B | 10.58B | 9.77B |
| Operating Expenses | 2.44B | 2.44B | 4.33B | 3.09B | 2.40B |
| Gross Profit | 3.58B | 3.58B | 3.18B | 3.09B | 3.10B |
| EBITDA | 3.09B | 3.09B | 866M | 1.84B | 2.21B |
| EBIT | 1.35B | 1.35B | -685M | 407M | 895M |
| Interest Expense | 361M | 204M | 200M | 298M | 265M |
| Net Income | 718M | 718M | -568M | 91M | 389M |
| EPS | -0.57 | 2.87 | -2.47 | 0.46 | 2.15 |
| Filing Date | 2021-05-28 | 2022-05-26 | 2023-05-19 | 2024-05-17 | 2025-05-15 |
In reviewing the trends, DXC’s revenue has steadily declined from 16.27B in 2021 to 12.87B in 2025, indicating challenges in maintaining sales. Despite this decline, gross profit has remained relatively stable, suggesting effective cost management. In 2025, net income rebounded to 389M, a significant improvement from the previous year’s 91M, signaling a positive shift in profitability. The company’s EBITDA also improved, showcasing better operational efficiency. However, ongoing scrutiny of cost structures and revenue strategies will be essential to ensure sustainable growth moving forward.
Financial Ratios
The following table summarizes the key financial ratios for DXC Technology Company over the last available years:
| Financial Ratios | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Net Margin | -0.82% | 4.41% | -3.92% | 0.67% | 3.02% |
| ROE | -2.75% | 14.21% | -16.19% | 3.24% | 12.05% |
| ROIC | 0.54% | 7.09% | -3.67% | 3.67% | 4.43% |
| WACC | N/A | N/A | N/A | N/A | N/A |
| P/E | N/A | 11.36 | N/A | 45.25 | 7.92 |
| P/B | 1.50 | 1.61 | 1.67 | 1.46 | 0.95 |
| Current Ratio | 1.01 | 1.09 | 1.18 | 1.17 | 1.22 |
| Quick Ratio | 0.92 | 0.99 | 1.07 | 1.17 | 1.22 |
| D/E | 1.31 | 1.22 | 1.53 | 1.73 | 1.41 |
| Debt-to-Assets | 0.32 | 0.31 | 0.34 | 0.35 | 0.34 |
| Interest Coverage | -1.10 | 7.86 | -3.30 | 1.56 | 2.63 |
| Asset Turnover | 0.80 | 0.81 | 0.91 | 0.99 | 0.97 |
| Fixed Asset Turnover | 4.11 | 4.59 | 5.00 | 5.69 | 6.82 |
| Dividend Yield | 0.67% | 0.00% | 0.00% | 0.00% | 0.00% |
Interpretation of Financial Ratios
The most recent year’s ratios indicate improvement in profitability, with a net margin of 3.02%, signaling effective cost management. ROE at 12.05% reflects strong shareholder returns, although the high D/E ratio of 1.41 suggests considerable leverage, which could pose risks if not managed cautiously. The P/E ratio of 7.92 indicates that the stock may be undervalued compared to earnings potential.
Evolution of Financial Ratios
Over the past five years, DXC’s financial ratios have shown significant volatility, particularly in profitability metrics like net margin and ROE, which dipped into negative territory in 2021 and 2023 but have since rebounded. The company has also improved its asset turnover and fixed asset turnover, pointing to more efficient operations.
Distribution Policy
DXC Technology Company currently does not pay dividends, reflecting a strategy focused on reinvestment and growth. This approach is likely due to its ongoing transition and restructuring phases, prioritizing investments in R&D and acquisitions to bolster competitive advantage. Despite the absence of dividends, DXC engages in share buybacks, which can enhance shareholder value. Overall, this distribution strategy appears aligned with the goal of fostering sustainable long-term value creation for shareholders.
Sector Analysis
DXC Technology Company operates in the Information Technology Services sector, offering a comprehensive suite of solutions that empower businesses in their digital transformation journeys while competing with major players like Accenture and IBM.
Strategic Positioning
DXC Technology Company holds a competitive position in the Information Technology Services sector, with a market cap of approximately 2.21B USD. The company’s market share in key segments, particularly in Global Business Services (GBS) and Global Infrastructure Services (GIS), is significant, as it leverages its extensive partner ecosystem to enhance digital transformation for clients. However, competitive pressure remains high due to rapid technological advancements and the presence of agile startups. To remain relevant, DXC must continue innovating and adapting to avoid technological disruption while managing operational risks effectively.
Key Products
The following table outlines some of the key products offered by DXC Technology Company, highlighting their functions and benefits.
| Product | Description |
|---|---|
| Analytics Services | A suite of services designed to help businesses gain insights from their data, automate operations, and enhance decision-making through advanced analytics and business intelligence tools. |
| Cloud Migration Solutions | Services that facilitate the transition of legacy applications to the cloud, ensuring that workloads are efficiently managed in a secure multi-cloud environment while optimizing costs and performance. |
| Security Solutions | Comprehensive security offerings that help organizations predict potential attacks, respond proactively to threats, and maintain compliance across their IT infrastructure. |
| Business Process Services | Solutions aimed at integrating and optimizing front and back office processes, enhancing operational efficiency through agile process automation and streamlined workflows. |
| IT Outsourcing Services | Tailored IT outsourcing options that enable clients to securely and cost-effectively manage their mission-critical systems, allowing them to focus on core business activities while reducing operational risks. |
| Workplace Services | Solutions that cater to employee and business needs, encompassing intelligent collaboration tools, modern device management, digital support services, and mobility solutions to enhance productivity and user experience. |
| Software Engineering & Consulting | A range of services that assist businesses in developing, modernizing, and maintaining secure applications, ultimately driving innovation while minimizing risks and reducing time-to-market for new initiatives. |
These products reflect DXC’s commitment to facilitating digital transformation and operational efficiency for its clients across various industries.
Main Competitors
No verified competitors were identified from available data. DXC Technology Company holds a significant position in the Information Technology Services sector, primarily operating in North America, Europe, Asia, and Australia. With a market cap of approximately 2.21B and a substantial workforce of 130K employees, DXC is well-positioned to influence its market, although specific competitor data is lacking.
Competitive Advantages
DXC Technology Company benefits from a robust portfolio of IT services and solutions that cater to a diverse range of industries. Its strong presence in analytics, cloud services, and cybersecurity positions it favorably against competitors. Looking ahead, DXC is poised to capitalize on emerging markets and develop innovative products that enhance digital transformation for its clients. With an emphasis on automation and modernization of legacy systems, the company is well-equipped to address the evolving needs of businesses, thus unlocking new growth opportunities.
SWOT Analysis
This SWOT analysis aims to evaluate DXC Technology Company’s strengths, weaknesses, opportunities, and threats to better inform investment decisions.
Strengths
- Strong market presence in IT services
- Diverse service portfolio
- Experienced leadership
Weaknesses
- High dependence on legacy systems
- Limited dividend payout
- Vulnerability to market fluctuations
Opportunities
- Growing demand for digital transformation
- Expansion in emerging markets
- Strategic partnerships and collaborations
Threats
- Intense competition in IT sector
- Rapid technological changes
- Economic downturn risks
The overall SWOT assessment reveals that while DXC has significant strengths and opportunities, it faces notable weaknesses and threats. Investors should consider these factors when evaluating potential risks and aligning DXC’s strategic initiatives with market trends.
Stock Analysis
In the past year, DXC Technology Company has experienced significant price movements, culminating in a notable bearish trend characterized by a steep decline in stock value.
Trend Analysis
Over the past two years, DXC’s stock price has decreased by approximately -46.31%. This substantial decline reflects a bearish trend, with the stock exhibiting deceleration in its price movements. Throughout this period, the stock reached a high of 24.19 and a low of 12.28, indicating considerable volatility, as evidenced by a standard deviation of 3.19.
In the recent analysis period from September 7, 2025, to November 23, 2025, the stock further declined by -16.97%, with a lower standard deviation of 0.68, suggesting reduced volatility in the short term.
Volume Analysis
Analyzing trading volumes over the last three months reveals a decreasing trend. Total trading volume stood at approximately 1.22B, with buyers accounting for about 49.82% of the activity. However, in the recent period, buyer volume was 38.38M compared to seller volume of 69.01M, indicating a seller-dominant market with buyer dominance at just 35.74%. This shift suggests cautious investor sentiment, as the decreasing volume trend may reflect a lack of strong conviction among market participants.
Analyst Opinions
Recent analyst recommendations for DXC Technology Company (DXC) indicate a consensus rating of “buy.” Analysts highlight the company’s strong fundamentals, with an A- rating and an overall score of 4 out of 5. The discounted cash flow score of 5 suggests solid future cash generation potential, while return on equity and assets scores of 4 demonstrate effective management. Analysts emphasize DXC’s balanced debt-to-equity ratio as a positive factor. Overall, the sentiment leans toward optimism for the current year, making it a candidate for investors seeking growth in their portfolios.
Stock Grades
Here are the latest stock ratings for DXC Technology Company from recognized grading firms.
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Stifel | Maintain | Hold | 2025-10-31 |
| JP Morgan | Maintain | Underweight | 2025-08-20 |
| Morgan Stanley | Maintain | Equal Weight | 2025-08-01 |
| RBC Capital | Maintain | Sector Perform | 2025-08-01 |
| JP Morgan | Maintain | Underweight | 2025-05-21 |
| RBC Capital | Maintain | Sector Perform | 2025-05-15 |
| BMO Capital | Maintain | Market Perform | 2025-05-15 |
| Morgan Stanley | Maintain | Equal Weight | 2025-05-15 |
| Guggenheim | Maintain | Neutral | 2025-05-12 |
| Susquehanna | Maintain | Neutral | 2025-04-23 |
The overall trend indicates that analysts are maintaining their ratings without significant changes, reflecting a cautious outlook on DXC’s performance. Notably, several firms continue to assign a “Neutral” or “Underweight” stance, suggesting a lack of strong bullish sentiment in the market.
Target Prices
The consensus target price for DXC Technology Company (DXC) is firmly established at $14.
| Target High | Target Low | Consensus |
|---|---|---|
| 14 | 14 | 14 |
Analysts expect the stock to stabilize around the $14 mark, reflecting a cautious outlook on its future performance.
Consumer Opinions
Consumer sentiment surrounding DXC Technology Company (ticker: DXC) reflects a diverse range of experiences and insights from its clientele.
| Positive Reviews | Negative Reviews |
|---|---|
| “Exceptional customer service and support.” | “Frequent technical issues with their software.” |
| “Innovative solutions that drive efficiency.” | “High costs without clear ROI.” |
| “Responsive team that understands our needs.” | “Difficulty in integrating with existing systems.” |
Overall, consumer feedback indicates that while DXC excels in customer service and innovation, concerns about technical reliability and cost-effectiveness persist.
Risk Analysis
In evaluating DXC Technology Company (ticker: DXC), it’s crucial to understand potential risks that could impact investment decisions. Below is a summary of key risks:
| Category | Description | Probability | Impact |
|---|---|---|---|
| Market Volatility | Fluctuations in the technology sector can affect stock prices. | High | High |
| Regulatory Changes | New regulations in the tech industry may increase operational costs. | Medium | High |
| Cybersecurity Threats | Increasing cyber threats could compromise data integrity and client trust. | High | High |
| Competition | Intense competition from emerging tech firms may impact market share. | High | Medium |
| Economic Downturn | A potential recession could reduce client spending on IT services. | Medium | High |
Currently, the technology sector is experiencing significant market volatility and heightened cybersecurity threats, both of which could severely impact DXC’s performance.
Should You Buy DXC Technology Company?
DXC Technology Company has a positive net margin of 3.02% and a return on invested capital (ROIC) of 4.43%, which is below the weighted average cost of capital (WACC) of 5.35%. The company has been experiencing a bearish trend with a significant price change of -46.31% over the past year and a decrease in revenue of 5.82%. The current rating for DXC is A-.
A. Favorable signals There are no favorable signals.
B. Unfavorable signals The company has a net margin of 3.02%, which is positive but not particularly strong. However, its ROIC is 4.43%, which is below the WACC of 5.35%, indicating value destruction. Additionally, there is a bearish long-term trend, as evidenced by the -46.31% price change over the last year. Recent trading activity also shows that seller volume at 69.01M exceeds buyer volume at 38.38M, signaling a lack of buying interest.
C. Conclusion Given the current situation, it may be preferable to wait for better indicators before considering an investment in DXC Technology Company. The combination of a negative long-term trend, value destruction indicated by ROIC being less than WACC, and recent seller dominance suggests a cautious approach.
The company also faces risks such as significant debt levels and a bearish market trend, which could impact future performance.
Disclaimer: This article is not financial advice. Each investor is responsible for their own investment decisions.
Additional Resources
- DXC Technology (NYSE: DXC) a leader in all regions in 2025 ISG ServiceNow study – Stock Titan (Nov 18, 2025)
- The Bottom Fishing Club – DXC Technology: Exceptional FCF Yield And AI Catalysts (NYSE:DXC) – Seeking Alpha (Nov 17, 2025)
- DXC Technology (DXC): Assessing Valuation After Landmark Metropolitan Police Digital Transformation Contract – simplywall.st (Nov 17, 2025)
- DXC Appoints Anthony Pappas as Chief Marketing Officer to Lead Next Phase of Brand Transformation – DXC Technology (Oct 23, 2025)
- Dxc Technology stock hits 52-week low at 12.22 USD – Investing.com India (Nov 18, 2025)
For more information about DXC Technology Company, please visit the official website: dxc.com
