DXC Boosts Portfolio With Blackout Partnership: How to Play the Stock

Core Insights - DXC Technology's shares have increased by 17% over the past six months, outperforming the Zacks Computer and Technology sector's return of 7.7% and its industry peers Amdocs and Science Applications International [1] - The company's extensive local presence and global sales capabilities provide a competitive edge in client service, allowing for customized solutions that meet specific market demands [2] Strategic Partnerships - DXC Technology has partnered with Blackout Technologies to enhance data security for enterprises, focusing on securing mobile devices and protecting sensitive data [3] - The collaboration aims to limit unauthorized use of smart devices during business hours, ensuring compliance with legal mandates and improving productivity [4] - An extended partnership with ServiceNow aims to accelerate the adoption of generative artificial intelligence (GenAI) through a Center of Excellence that combines both companies' expertise [6][7] - A partnership with Accelya is set to enhance system integrations for airlines, improving operational efficiency and customer experience [8][9] Financial Guidance - DXC anticipates a revenue decline of 5.5-4.5% but has raised its full-year adjusted EBIT margin outlook to 7-7.5% from the previous 6.5-7% [11] - The expected full-year non-GAAP diluted EPS has been revised to a range of $3 to $3.25, up from $2.75-$3, with Zacks Consensus Estimates for revenues and earnings at $12.98 billion and $3.18 per share, respectively [11] Valuation - DXC Technology stock is currently considered undervalued, with a Zacks Value Style Score of A and a forward 12-month Price/Sales ratio of 0.30X compared to the industry's 10.81X [12] - The combination of innovative technology solutions and long-term growth potential, along with a discounted valuation, makes the stock attractive for investors [12][13]