What Happened?
Shares of IT services provider DXC Technology (NYSE: DXC) fell 6.3% in the afternoon session after its negative momentum continued as analysts at both Susquehanna and Stifel lowered their price targets on the company's shares. Susquehanna reduced its price target to $14 from $16, while Stifel cut its target to $14 from a previous $15. Both firms maintained their ratings on the stock, with Susquehanna keeping a Neutral rating and Stifel reaffirming its Hold rating. The price target cuts appeared to outweigh some positive news for the company.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy DXC? Access our full analysis report here.
What Is The Market Telling Us
DXC’s shares are quite volatile and have had 16 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 3 days ago when the stock gained 7.5% on the news that it reported decent third-quarter 2025 results, where a miss on headline earnings was offset by strong underlying profitability and cash generation. The company's revenue of $3.16 billion met Wall Street's expectations but was down 2.5% year-over-year, while its GAAP earnings per share of $0.20 missed the consensus estimate of $0.25. Despite these headline numbers, investors were encouraged by other key metrics. Adjusted EBITDA, a measure of operational profitability, came in at $457 million, beating forecasts. The standout figure was free cash flow, which reached a robust $411 million, marking a significant improvement from the prior year when the free cash flow margin was just 1.5% compared to 13% this quarter. The stock's jump suggested investors focused on the strong cash performance as a sign of operational health, looking past the slight revenue decline and earnings shortfall.
DXC is down 32.8% since the beginning of the year, and at $13.27 per share, it is trading 41.9% below its 52-week high of $22.83 from November 2024. Investors who bought $1,000 worth of DXC’s shares 5 years ago would now be looking at an investment worth $679.47.
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