DXC

DXC Technology Company

TMT, Industrial/Transportation


Presented:12/21/2016
Price:$61.05
Cap:$8.78B
Current Price:$20.37
Cap:$3.68B

Presented

Date12/21/2016
Price$61.05
Market Cap$8.78B
Ent Value$10.04B
P/E RatioN/A
Book Value$14.50
Div Yield0%
Shares O/S143.78M
Ave Daily Vol1,871,682
Short Int7.82%

Current

Price$20.37
Market Cap$3.68B
DXC Technology Company. provides information technology solutions. It operates through the Global Business Services, Global Infrastructure Services segments. The Global Business Services segment provides technology solutions including consulting, applications services, and software. The Global Infrastructure Services segment provides managed and virtual desktop solutions, unified communications and collaboration services, data center management, cyber security, cloud solutions, cloudmail and storage as a Service, compute and managed storage solutions. The company was founded by Roy Nutt and Fletcher Roseberry Jones on April 16, 1959 and is headquartered in Tysons, VA.

On April 3, 2017 Hewlett Packard Enterprise (HPE) announced that it successfully completed the separation of its Enterprise Services business, and merged it with Computer Sciences Corporation (CSC) to create DXC Technology (DXC).

Publicly traded companies mentioned herein: Accenture PLC (ACN), Computer Sciences Corporation (CSC), Cognizant Technology Solutions Corp (CTSH), CSRA Inc (CSRA), Hewlett Packard Enterprise Co (HPE), Tata Consultancy Services Ltd (TCS IN)

Highlights

The presenter is long shares of Computer Sciences Corporation (CSC) at $61 and likes the setup ahead of the planned merger with HPE’s Enterprise Services division. The stock has performed well since the deal was announced (+20%), and is up almost 90% year-to-date, but given the scale of the pro forma IT service company ($26 billion in combined revenue) and substantial cost cutting opportunity the risk/ reward continues to favor bulls. Excluding capital deployment, his model is forecasting annual run-rate EPS of $8 in fiscal 2019, and if the stock can trade at a reasonable multiple (10x) it should trade up to $80+ over the next 12-18 months.

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Idea Discussion

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