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DXC – Market expectations are for a material decline in Uniform ROA, but management is confident about their pipeline, cloud business, and free cash flow

  • DXC Technology Company (DXC:USA) currently trades below historical averages relative to UAFRS-based (Uniform) Earnings, with an 11.0x Uniform P/E. At these levels, the market has bearish expectations for the firm, but management is confident about their pipeline, cloud infrastructure business, and free cash flow growth
  • Specifically, generated an excitement marker when saying that they have repurchased $400mn worth of shares. Furthermore, they are confident that their cloud infrastructure business is growing faster than they expected and that their digital pipeline is strong. Moreover, they are confident in their ability to integrate their products into their customers’ existing IT infrastructure and that their adjusted free cash flow was $72mn.