Is Unisys Stock a Buy, Sell or Hold at 0.19X Price/Sales Ratio?

Core Viewpoint - Unisys (UIS) is currently undervalued in the Zacks Computer & Technology sector, with a strong Value Score of A and a forward 12-month Price/Sales (P/S) ratio of 0.19X, significantly lower than the sector average of 6.14X [1][3] Group 1: Financial Performance and Valuation - UIS stock is trading at a discount compared to peers like Accenture (3.33X), CyberArk (11.04X), and CoStar Group (9.71X) [1] - The Zacks Consensus Estimate for 2024 earnings is 24 cents per share, with a steady estimate for the third-quarter loss at 4 cents per share [7] - Unisys shares have returned 99% over the past 12 months, outperforming the sector's 46.7% and the industry's 35.1% [8] Group 2: Business Prospects and Growth Drivers - Unisys is experiencing strong demand for AI and cloud transformation, with new business signings increasing by 25% year-over-year in the first half of 2024 [4] - The company has a backlog of $2.8 billion, up 4% year-over-year, indicating robust future revenue potential [4] - Digital Workplace Solutions (DWS) revenues are expected to grow sequentially in the second half of 2024 and into 2025, driven by new logo wins [4] Group 3: Revenue Guidance and Expectations - For 2024, Unisys expects revenues to grow between negative 1.5% and positive 1.5% in constant currency, with DWS showing strong growth potential [6] - License and Support (L&S) revenues are projected to average $370 million from 2024 to 2026, with expectations of $375 million for the full year [5][6] - Free cash flow for 2024 is anticipated to be $10 million, with capital expenditures between $85 million and $95 million [6] Group 4: Market Position and Sentiment - Unisys has been recognized as a leader in the Future of Work Services Report by Information Services Group (ISG) and Avasant's Digital Workplace Services 2024 RadarView [4] - The stock is currently trading above the 200-day moving average, indicating a bullish trend [8][9] - UIS holds a Zacks Rank 2 (Buy), reflecting positive market sentiment [9]