Is DXC Technology Co. overvalued or undervalued?

As of 14 May 2025, DXC Technology Co. has moved from a grade of risky to attractive, indicating a significant improvement in its valuation outlook. The company is currently considered undervalued. Key ratios include a P/E ratio of 6, an EV to EBITDA of 2.80, and a PEG ratio of 0.03, all of which suggest that the stock is trading at a discount compared to its earnings growth potential.
In comparison to its peers, DXC Technology Co. has a P/E of 5.88, while ExlService Holdings, Inc. is valued at a much higher P/E of 37.17, highlighting the disparity in market perception. Additionally, DXC's EV to EBITDA ratio of 2.78 is significantly lower than the industry average, reinforcing the undervaluation narrative. Despite recent underperformance against the S&P 500, with a year-to-date return of -26.78% compared to the index's 2.44%, the company's attractive valuation metrics suggest potential for recovery and growth.