Should You Buy, Sell, or Hold Unisys Stock Before Q2 Earnings?

Unisys Corporation UIS is scheduled to release second-quarter 2025 results on July 30.The Zacks Consensus Estimate for UIS’ second-quarter bottom line is pegged at a loss of 34 cents, indicating a decline of 312.5% from earnings per share (EPS) of 16 cents reported in the prior-year quarter. The consensus mark has remained unchanged over the past 30 days.UIS Earnings Estimate TrendImage Source: Zacks Investment ResearchThe consensus mark for second-quarter revenues is pegged at $442.5 million, indicating a fall of 7.5% from the year-ago quarter’s reported figure.The company has an impressive earnings surprise history. UIS’ earnings outpaced the Zacks Consensus Estimate in three of the trailing four quarters and missed on one occasion, the average surprise being 46.9%.UIS Earnings Surprise HistoryImage Source: Zacks Investment ResearchQ2 Earnings Whispers for UIS StockOur proven model does not conclusively predict an earnings beat for Unisys this time. A stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to beat earnings. However, that is not the case here. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.Unisys has an Earnings ESP of 0.00% and a Zacks Rank #3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.Factors Shaping UIS’ Upcoming ResultsUnisys’ second-quarter performance is expected to have reflected the company’s continued progress on strategic backlog conversion, enhanced field services momentum, and ramp-up of digital workplace offerings. Sequential improvement in Ex-L&S revenue, coupled with strength in Device Subscription Services (DSS) and AI-driven enterprise solutions, likely supported performance in the to-be-reported quarter.For the second quarter, Unisys projects approximately $375 million in Ex-L&S revenues, indicating mid-single-digit sequential growth. Given renewal timing dynamics, Ex-L&S revenues are expected to remain comparable on a sequential basis, with 35% of the year’s Ex-L&S revenues expected in the first half and 65% in the second half.Strength in signings — particularly multi-year infrastructure and modernization contracts — is expected to have aided the company’s performance in the second quarter. Growth in enterprise storage and increased demand for PC refreshes, supported by Windows 11 transition and AI compatibility needs, may have lifted field service volumes. Meanwhile, the ramp-up of DSS contract signings likely contributed to top-line traction, especially in the Digital Workplace Solutions segment.Unisys’ investments in next-gen offerings such as Post-Quantum Cryptography advisory, Service Experience Accelerator, and agentic AI frameworks are expected to have driven early-stage growth in the Cloud, Applications & Infrastructure (CA&I) segment. Strategic signings in managed security services and data modernization, especially within financial services and Latin American power distribution, may have supported the company’s performance in the second quarter.However, timing-related headwinds from license and support (L&S) renewals and softness in discretionary public sector project work, especially among state, local and higher education clients, may have tempered revenue growth in parts of the portfolio. Additionally, cautious client budgeting and extended decision-making cycles — driven by macro and geopolitical uncertainty — may have delayed in-quarter revenue conversion from new pipeline deals.Margins for the quarter may have faced moderate pressure as the company ramped labor and training costs ahead of expected hardware deployment and delivery acceleration. While Unisys continues to benefit from structural SG&A reductions, incremental hiring to support enterprise storage and liquid cooling solutions may have tempered near-term margin expansion.UIS Stock Price Performance & ValuationUnisys shares have gained 9.3% in the past three months, outperforming the Zacks Computers - IT Services industry’s growth of 3.6%. Industry players like C3.ai AI and Leidos Holdings LDOS have gained 15.2% and 12%, respectively, while DXC Technology Company DXC has lost 8.6% in the same time frame.UIS Three-Month Price PerformanceImage Source: Zacks Investment ResearchFrom a valuation perspective, Unisys stock is currently trading at a discount. UIS is currently trading at a forward 12-month price-to-sales (P/S) multiple of 0.15X, below the industry average of 18.58X. Other industry players, such as C3.ai, Leidos Holdings and DXC Technology, have P/S ratios of 7.1X, 1.2X and 0.21X, respectively.Image Source: Zacks Investment ResearchInvestment Considerations for UIS StockUnisys is positioning itself to capture a larger share of enterprise IT spend by expanding its presence in high-growth areas such as digital workplace services, cybersecurity and AI-enabled solutions. The company’s transformation strategy emphasizes deeper client penetration through device subscription services, next-gen compute offerings, and secure data platforms. Strong momentum in new business signings, including high-volume DSS contracts and expanded security engagements, reflects growing demand for Unisys’ differentiated solutions. Strategic alliances with technology partners, improved delivery efficiency, and a renewed focus on recurring high-margin License & Support revenue further enhance the company's visibility into long-term cash generation and margin expansion.However, Unisys faces transitional challenges tied to the timing of contract ramp-ups, hardware-driven revenue mix, and macro-sensitive public sector engagements. Upfront investments in workforce training, infrastructure field services, and advanced AI frameworks may exert near-term pressure on gross margins as revenue scales. External factors such as delayed decision-making in state and local government contracts, as well as broader geopolitical and trade uncertainties, could influence client spending behavior. While management remains confident in its full-year revenue and profitability outlook, execution on backlog conversion and margin stabilization remains vital.How Should You Play UIS Pre-Q2 Earnings?Unisys’ upcoming second-quarter results will reflect both its strategic progress and the inherent challenges of a business in transformation. While the company is making headway in high-growth segments like digital workplace services, AI-led solutions, and cybersecurity, short-term pressures from license renewal timing, cautious public sector spending, and upfront investment costs may weigh on margins and revenue momentum.Valuation remains compelling, with UIS trading at a significant discount to peers, and recent contract wins suggest long-term growth potential. However, the near-term earnings trajectory appears uncertain, particularly given the projected year-over-year EPS decline and modest revenue contraction.Given this mixed backdrop, Unisys stock appears best suited for a Hold stance at this juncture. Investors may consider staying on the sidelines until greater clarity emerges after the second-quarter earnings release.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the favorite stock to gain +100% or more in the months ahead. They includeStock #1: A Disruptive Force with Notable Growth and ResilienceStock #2: Bullish Signs Signaling to Buy the DipStock #3: One of the Most Compelling Investments in the MarketStock #4: Leader In a Red-Hot Industry Poised for GrowthStock #5: Modern Omni-Channel Platform Coiled to SpringMost of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor. While not all picks can be winners, previous recommendations have soared +171%, +209% and +232%.Download Atomic Opportunity: Nuclear Energy's Comeback free today.Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Unisys Corporation (UIS): Free Stock Analysis Report C3.ai, Inc. (AI): Free Stock Analysis Report Leidos Holdings, Inc. (LDOS): Free Stock Analysis Report DXC Technology Company. (DXC): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks