Stock Analysis
Statistically speaking, long term investing is a profitable endeavour. But unfortunately, some companies simply don't succeed. Zooming in on an example, the DXC Technology Company (NYSE:DXC) share price dropped 72% in the last half decade. That's an unpleasant experience for long term holders. Even worse, it's down 9.3% in about a month, which isn't fun at all.
If the past week is anything to go by, investor sentiment for DXC Technology isn't positive, so let's see if there's a mismatch between fundamentals and the share price.
See our latest analysis for DXC Technology
To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.
DXC Technology became profitable within the last five years. That would generally be considered a positive, so we are surprised to see the share price is down. Other metrics might give us a better handle on how its value is changing over time.
It could be that the revenue decline of 4.4% per year is viewed as evidence that DXC Technology is shrinking. This has probably encouraged some shareholders to sell down the stock.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
DXC Technology is well known by investors, and plenty of clever analysts have tried to predict the future profit levels. If you are thinking of buying or selling DXC Technology stock, you should check out this free report showing analyst consensus estimates for future profits.
We'd be remiss not to mention the difference between DXC Technology's total shareholder return (TSR) and its share price return. The TSR attempts to capture the value of dividends (as if they were reinvested) as well as any spin-offs or discounted capital raisings offered to shareholders. Its history of dividend payouts mean that DXC Technology's TSR, which was a 66% drop over the last 5 years, was not as bad as the share price return.
Although it hurts that DXC Technology returned a loss of 15% in the last twelve months, the broader market was actually worse, returning a loss of 19%. What is more upsetting is the 11% per annum loss investors have suffered over the last half decade. This sort of share price action isn't particularly encouraging, but at least the losses are slowing. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Even so, be aware that DXC Technology is showing 1 warning sign in our investment analysis , you should know about…
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
What are the risks and opportunities for DXC Technology?
NYSE:DXC
DXC Technology
DXC Technology Company, together with its subsidiaries, provides information technology services and solutions primarily in North America, Europe, Asia, and Australia.
Rewards
Trading at 54.1% below our estimate of its fair value
Earnings are forecast to grow 7.59% per year
Earnings grew by 94.1% over the past year
Risks
Significant insider selling over the past 3 months
Share Price
Market Cap
1Y Return
Further research on
DXC Technology
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
DXC Technology Company, together with its subsidiaries, provides information technology services and solutions primarily in North America, Europe, Asia, and Australia.
The Snowflake is a visual investment summary with the score of each axis being calculated by 6 checks in 5 areas.
Read more about these checks in the individual report sections or in our analysis model.
Undervalued with solid track record.
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