DXC

DXC Technology Company

TMT, Event Driven/Special Sit


Presented:03/20/2018
Price:$107.31
Cap:$31.10B
Current Price:$20.37
Cap:$3.68B

Presented

Date03/20/2018
Price$107.31
Market Cap$31.10B
Ent Value$33.48B
P/E Ratio35.07x
Book Value$44.96
Div Yield0.67%
Shares O/S289.77M
Ave Daily Vol1,627,415
Short Int1.98%

Current

Price$20.37
Market Cap$3.68B
DXC Technology Co. provides technology consulting, outsourcing and support services. It services include analytics, application, business process, cloud, consulting, enterprise and cloud applications, security, workplace and mobility, and industries. The company was founded on May 19, 2016 and is headquartered in Tysons, VA.

Publicly traded companies mentioned herein: Accenture PLC (ACN), CACI International Inc (CACI), CSRA Inc (CSRA), DXC Technology Co (DXC), General Dynamics (GD), Hewlett Packard Enterprise Co (HPE), International Business Machines Corp (IBM), Micro Focus International plc (MRCO LN; MFGP)

Highlights

The presenter is long DXC Technology (DXC) and said that Chairman, President, and CEO Mike Lawrie has an excellent track record of both transforming businesses and increasing shareholder value. With a near-term catalyst in the form of the spin-off of Perspecta (the USPS business that came with HPE), and enough levers to pull internally, DXC could earn $10.50 per share in fiscal 2020. Given previous guidance, it looks to the presenter like shareholders will get the SpinCo for “free”, and could see upside to $130+ (using a 12x - 13x P/E multiple), with ~$12/ share of additional value for the spin-off of Perspecta (assuming it trades at ~10x EBITDA, which could prove to be conservative).

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Idea Discussion

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