Can Unisys Capitalize Early With Looming Quantum Threats?

Core Insights - Unisys Corporation is introducing its first Post-Quantum Cryptography solution to address vulnerabilities in encryption frameworks as quantum computing advances [1][9] - The company's strategy aligns with its "Clear Path Forward 2050" roadmap, focusing on modernizing client infrastructure with quantum-resilient security and AI-enabled services [2] - Despite an 11.4% year-over-year revenue decline in Q1, Unisys reported an 80% increase in new business total contract value (TCV), indicating strong future growth potential [3][9] Financial Performance - Unisys' balance sheet remains strong with $393 million in cash and improving free cash flow, while management maintains full-year guidance with expectations of tailwinds in high-margin segments [3] - Earnings estimates for 2025 and 2026 suggest significant year-over-year growth of 28.9% and 120.7%, respectively, indicating positive future earnings potential [14] Competitive Landscape - Unisys faces competition from DXC Technology and Leidos Holdings, both of which are also investing in post-quantum security and AI-driven solutions [5][6] - DXC Technology focuses on modernizing IT infrastructure and securing hybrid environments, while Leidos expands its cybersecurity capabilities through government contracts that include quantum threat mitigation [5][6] Stock Performance - Unisys shares have increased by 9.6% over the past three months, outperforming the Zacks Computers - IT Services industry but underperforming the broader Zacks Computer and Technology sector and the S&P 500 index [7] - The stock is currently trading at a discounted valuation compared to industry peers, with a forward 12-month price-to-sales (P/S) ratio of 0.16 [11]