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DXC Technology Company

DXC
33
Information Technology Services · Technology
Price
$9.47
+0.08 (+0.85%)
Market Cap
$1.53B
Winston Score
33
Winston is serious
Below-average fundamentals — multiple weak pillars.

Share count falling — buybacks

30.0% over 4y

The company has reduced its share count over this period, returning value to shareholders through buybacks.

Diluted shares outstanding: 255.2M (2022) → 178.7M (2026)

DXC Technology helps large companies manage their computer systems and technology needs. It provides IT services like cloud computing, cybersecurity, data analytics, and running day-to-day tech operations for clients. Its main customers are big businesses and government agencies across industries like healthcare, banking, and insurance.

DXC makes money by signing long-term service contracts with its clients, essentially acting as an outsourced IT department. The company operates globally, with a large presence in North America, Europe, and Australia, and employs roughly 130,000 people. However, DXC has struggled to grow revenue in recent years as clients reduce outsourcing spending or move work in-house, and its thin margins — reflected in a gross margin below 15% and a near-zero return on invested capital — highlight the key risk: the company must successfully cut costs and win new contracts before further revenue erosion weakens its already fragile financial position.

Winston Score History

Politician Trades

4 trades / 12mo

2 Congressional buys and 2 sells on DXC in the last 12 months.

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Score breakdown

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Quality

Gross Margin
-4.5%
Thin — -4.5% gross margin
Operating Margin
-2.8%
Losing money on operations — -2.8%
ROCE
-1.3%
Weak — -1.3% return on capital

Negative ROIC means the business is losing money on every dollar invested in it.

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Growth

Sales YoY
-1.5%
Shrinking sales (-1.5% YoY)
EPS YoY
N/A
Data not available
EPS Consistency
4/8 quarters
Earnings inconsistent quarter-to-quarter

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Cash Flow

Cash Conversion
518%
Turns 518% of profit into real cash
FCF Margin
8.3%
Modest free cash flow (8.3%)

FCF margin between 0% and 10%. Some cash from sales, but not a lot.

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Stability

Debt / Equity
1.26
Elevated debt (1.26)
Interest Cover
2.34x
Tight — interest eats into profit (2.3x)

Interest coverage between 1 and 3. Profits cover interest, but with little room to spare.

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Valuation

P/E Ratio (TTM)
6.4x
Attractive valuation — P/E 6.4

P/E under 10. The price tag is small relative to last year's profit.

P/E vs Forward
+3.2
GROWING
Earnings expected to grow meaningfully — cheaper on forward P/E (6.4 → 3.2)

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Dividends

Not applicable for this business.
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