UIS vs. DXC: Which IT Services Stock is the Better Buy Now?

Unisys Corporation UIS and DXC Technology Company DXC are two legacy players in the global IT services space, both undergoing significant transformations to stay relevant in an era driven by digital modernization, cloud migration and AI-driven solutions. For investors seeking exposure to the IT services sector, the key question is: Which of these under-the-radar tech stocks offers a more compelling risk-reward profile right now? Let us break down the fundamentals, growth outlook and valuation to determine the better buy.Case for UISUnisys is showing encouraging momentum in business development, particularly through significant growth in total contract value, which rose 50% sequentially and more than 80% year over year in first-quarter 2025. Much of this was fueled by new logos and demand for its device subscription services (DSS), which offer streamlined, AI-friendly device provisioning and endpoint management.Large wins, including a contract to manage 380,000 devices for a global tech firm, are expected to ramp up revenues over time. Additionally, field service volumes are benefiting from a delayed but strengthening PC refresh cycle linked to Windows 11 upgrades, enhancing infrastructure services demand.The company’s Cloud, Applications & Infrastructure segment is also benefiting from heightened demand for cybersecurity and application modernization. Unisys launched its first post-quantum cryptography solution and signed a notable security services deal with a major Latin American power distributor.Furthermore, it is advancing AI adoption through agentic AI and its service experience accelerator, which leverages generative AI and workflow automation. These tech-forward efforts are helping reposition Unisys as a more relevant, solution-oriented partner to enterprise and government clients.Unisys’ broader strategic execution is guided by its “Clear Path Forward 2050” framework, which focuses on expanding proprietary software capabilities, modernizing infrastructure, and delivering specialized consulting and managed services. The strategy has gained traction, as reflected in improved industry recognition, Dell Titanium partner status and a growing backlog of $2.9 billion. Strong cost discipline, increasing associate utilization, and a resilient portfolio of long-term, geographically diversified contracts are further supporting financial stability and margin improvement.Although Unisys has been positive about its long-term prospects, it is facing short-term revenue challenges due to delays in its license and support business, along with reduced discretionary spending in its other segments. Overall, macroeconomic uncertainties continue to cause some deal delays, which may marginally affect short-term revenue recognition.Case for DXCDXC Technology is gaining momentum in its turnaround, driven by operational discipline and leadership changes under CEO Raul Fernandez. The company reported a strong book-to-bill ratio of 1.2 in fourth-quarter fiscal 2025, reflecting solid demand and a 20% year-over-year increase in bookings. Wins like the Carnival Cruise Line deal highlight improved competitiveness in securing large, strategic contracts, particularly in its Consulting & Engineering Services segment.The company is also capitalizing on the enterprise shift toward AI. By integrating GenAI into modernization, testing and automation offerings, DXC is delivering tangible value to clients. Its ability to combine infrastructure expertise with AI-driven solutions positions it well in a rapidly evolving tech landscape. Its scale and cross-industry experience enhance its appeal for complex transformation projects.Financially, DXC Technology ended fiscal 2025 on a stronger footing, with $1.8 billion in cash and $687 million in free cash flow. Debt reduction and improved working capital discipline are enabling reinvestment in growth initiatives. Planned share repurchases and long-term equity incentives for executives signal growing confidence in the company’s strategic direction.How Does Zacks Consensus Estimate Compare for UIS & DXC?The Zacks Consensus Estimate for Unisys’ 2025 EPS implies a year-over-year increase of 28.9%. Earnings estimates for 2025 have been unchanged in the past 60 days. Image Source: Zacks Investment Research The Zacks Consensus Estimate for DXC Technology’s fiscal 2026 EPS indicates a year-over-year decline of 11.1%. However, earnings estimates for 2025 have witnessed upward revisions of 0.7% in the past 60 days. Image Source: Zacks Investment Research Price Performance & ValuationThe UIS stock has declined 30% in the year-to-date period. Meanwhile, DXC shares have dropped 27%.Price Performance Image Source: Zacks Investment Research UIS is trading at a forward 12-month price-to-earnings ratio of 4.54X, below its one-year median of 10.29X. DXC’s forward sales multiple sits at 4.79X, below its median of 6.27X over the same time frame.P/E (F12M) Image Source: Zacks Investment Research End NotesDXC Technology appears to be the more compelling choice over Unisys at this juncture due to its clearer trajectory toward operational stabilization and strategic execution. Under refreshed leadership, DXC is showing signs of effective turnaround through stronger deal wins, particularly in high-value segments like Consulting & Engineering Services. Its focus on integrating AI into core modernization and automation offerings enhances its relevance in today's tech landscape.Furthermore, DXC Technology’s disciplined financial management and commitment to shareholder returns reflect growing internal confidence. While Unisys has promising growth drivers, including innovation in cybersecurity and device services, its near-term revenue headwinds and execution risks make DXC’s improving fundamentals and strategic consistency more attractive for investors seeking stability and long-term growth potential in IT services.DXC currently carries a Zacks Rank #2 (Buy), whereas UIS has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.#1 Semiconductor Stock to Buy (Not NVDA)The incredible demand for data is fueling the market's next digital gold rush. As data centers continue to be built and constantly upgraded, the companies that provide the hardware for these behemoths will become the NVIDIAs of tomorrow.One under-the-radar chipmaker is uniquely positioned to take advantage of the next growth stage of this market. It specializes in semiconductor products that titans like NVIDIA don't build. It's just beginning to enter the spotlight, which is exactly where you want to be.See This Stock Now for Free >>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 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