Investors in DXC Technology Company (NYSE:DXC) had a good week, as its shares rose 3.8% to close at US$22.35 following the release of its quarterly results. Revenues were US$3.2b, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at US$0.31, an impressive 118% ahead of estimates. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for DXC Technology

Taking into account the latest results, the eleven analysts covering DXC Technology provided consensus estimates of US$12.4b revenue in 2026, which would reflect a perceptible 5.5% decline over the past 12 months. Earnings are expected to improve, with DXC Technology forecast to report a statutory profit of US$1.31 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$12.7b and earnings per share (EPS) of US$1.19 in 2026. While revenue forecasts have been revised downwards, the analysts look to have become more optimistic on the company's cost base, given the decent improvement in to the earnings per share numbers.

There's been a 5.5% lift in the price target to US$23.56, with the analysts signalling that the higher earnings forecasts are more relevant to the business than the weaker revenue estimates. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic DXC Technology analyst has a price target of US$27.00 per share, while the most pessimistic values it at US$22.00. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the DXC Technology's past performance and to peers in the same industry. We would also point out that the forecast 4.4% annualised revenue decline to the end of 2026 is better than the historical trend, which saw revenues shrink 9.0% annually over the past five years By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 9.4% per year. So it's pretty clear that, while it does have declining revenues, the analysts also expect DXC Technology to suffer worse than the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards DXC Technology following these results. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Still, earnings are more important to the intrinsic value of the business. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that in mind, we wouldn't be too quick to come to a conclusion on DXC Technology. Long-term earnings power is much more important than next year's profits. We have forecasts for DXC Technology going out to 2027, and you can see them free on our platform here.

It is also worth noting that we have found 1 warning sign for DXC Technology that you need to take into consideration.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.