DXC Technology Company

DXC Technology Company (NYSE: DXC) is a vendor-neutral IT services provider that went public in April 2017. Computer Sciences Corporation (CSC) and Hewlett Packard Enterprise's Services unit were combined to form DXC. It enables global enterprises to execute mission-critical systems and operations across public, private, and hybrid clouds while modernizing IT, optimizing data structures, and assuring security.

Key Highlights:

• The company reported a 4.64% fall in revenues to USD 4.09 billion in Q3FY22 (ended December 31, 2021) compared to USD 4.29 billion in Q3FY21.
• The company also reported a sharp decline in the bottom line to USD 102 million in Q3FY22 from USD 1.10 billion in Q3FY21.
• EBITDA and net margins were 16.6% and 2.5%, respectively, lower than the industry median of 18.9% and 6.9%.
• On the other hand, DXC's cash conversion cycle is unusually long, at 62.1 days in Q3FY22, against the industry median of 30.2 days. As of Q3FY22, it has a debt-to-equity ratio of 1.04x, indicating a higher risk to lenders and investors.
• Stock is currently trading between its crucial long-term as well as short-term 50-day and 200-day DMA support levels.
• Stock is currently leaning towards the mid-band of the 52-week range of USD 24.20 to USD 44.18.
• Over the past month and three months, DXC stock price has climbed 14.36% and 11.12%, respectively.

Three-Year Technical Price Chart (as of February 22, 2022; at 2:04 PM ET). Source: REFINITIV; Analysis by Kalkine Group

Conclusion: Considering the company's fall in fundaments, solid margins, slightly higher debt, and other technical indicators, we recommend a "Watch" rating on the stock at the current price of USD 34.93, down 1.94% as of February 22, 2022, at 2:04 PM ET.

*The reference data in this report has been partly sourced from REFINITIV.

Exterran Corporation

Exterran Corporation (NYSE: EXTN) provides compression, production products, and services to integrated oil and natural gas companies, the national oil and natural gas companies, independent oil and natural gas producers, and oil and natural gas processors, gatherers, and pipeline operators for the production and transportation of oil and natural gas.

Key Highlights:

• The company reported a 4.84% fall in total revenues to USD 161.30 million in Q3FY21 (ended September 30, 2021) compared to USD 169.51 million in Q3FY20.
• Net losses for Q3FY21 decreased to USD 16.30 million from USD 17.72 million reported in Q3FY20, attributable to high operating expenditure.
• On the other hand, EXTN's cash conversion cycle is unusually long, at 186.5 days in Q3FY21, against the industry median of 76.2 days. As of Q3FY21, it has a debt-to-equity ratio of 2.66x, indicating a higher risk to lenders and investors.
• EXTN and Enerflex Ltd., a single supplier of electric power generation equipment, announced a business merger on January 24, 2022, to form a top integrated global energy infrastructure provider. Enerflex Ltd will be the company's last name after the transaction.
• The stock is currently trading above its critical short-term (50-day) and long-term (200-day) DMA support levels, and the RSI is at 65.77, indicating an overbought zone.
• It is leaning towards the higher-band of the 52-week range of USD 2.67 to USD 6.17.
• The stock price is volatile in nature and has risen 91.00% in the past month.

Three-Year Technical Price Chart (as of February 22, 2022; 2:07 PM ET). Source: REFINITIV; Analysis by Kalkine Group

Conclusion: Considering the company's significant losses, volatility in stock prices, inorganic endeavors, and other technical indicators, we recommend a "Watch" rating on the stock at the current price of USD 5.73, down 1.38% as of February 22, 2022, at 2:07 PM ET.

*The reference data in this report has been partly sourced from REFINITIV.