Will Unisys' DWS Bookings be Able to Offset Discretionary Weakness?
Unisys Corporation UIS is witnessing robust bookings across its Digital Workplace Solutions (DWS) segment, thanks to the market's ongoing focus shift toward AI-driven solutions. It is actively investing in innovations that align with its clients’ requirements across cost optimization, data integration and security, improved asset and employee productivity and AI enablement.
Since 2024, the company has been building a significant pipeline for its Device Subscription Service or DSS (under the DWS segment), and now, into 2025, these prospects seem bright. DSS is a “device-as-a-service” offering that aims to create tangible value for organizations by reducing costs and increasing the efficiency of procurement, provisioning and deployment, while ensuring employee experience enhancement, asset allocation and overall security posture.
During the first quarter of 2025, Unisys witnessed scalable DSS signings, including a large new logo win with a leading global technology supplier, where it will offer quarterly procurement and services for 380,000 devices across 14 countries; and a biotech client to offer modern device management to support more than 21,000 devices across multiple geographic regions. These projects enhance the company’s revenue visibility in the long term and provide an entry point for expansion into higher-margin device-managed services.
However, the DWS segment is witnessing a partial setback (first-quarter 2025 revenues down 7.5% year over year) in the near term due to lingering weakness in discretionary spending, primarily due to a decline in field service volumes. Although lower levels of discretionary project work and declines in third-party volume softened the start of 2025, UIS expects these headwinds to be offset by the second half of 2025 as DSS signings are ramping up, creating value for the long term.
UIS Stock’s Price Performance vs. Other Market Players
Shares of this Pennsylvania-based technology solutions company have inched up 6.5% in the past three months, underperforming the Zacks Computers - IT Services industry, the broader Zacks Computer and Technology sector and the S&P 500 index, as evidenced by the chart below.
Sharing the market space with Unisys, other renowned players like Wipro Limited WIT and DXC Technology Company DXC are gaining from the robust market trends for AI-powered solutions. However, they are comparatively falling behind UIS in capitalizing on the market opportunities. In the past three months, shares of Wipro have gained 5.5% while those of DXC Technology have tumbled 1.4%.
UIS’ Discounted Valuation Trend
UIS stock is currently trading at a discount compared with the industry peers, with a forward 12-month price-to-sales (P/S) ratio of 0.14, as evidenced by the chart below. The discounted valuation of the stock, compared with its peers, advocates for an attractive entry point for investors. That said, in the long term, the valuation could move toward a premium, given the favorable market fundamentals backing the company’s revenue visibility.
Notably, Wipro and DXC Technology are currently trading at a forward 12-month P/S ratio of 2.86 and 0.22, respectively.
EPS Trend of Unisys
Unisys’ earnings estimates for 2025 and 2026 have remained unchanged over the past 60 days. However, the estimated figures for 2025 and 2026 imply year-over-year growth of 28.9% and 120.7%, respectively.
The year-over-year growth trends indicate the company’s movement toward long-term growth backed by its in-house innovation efforts and strong market fundamentals.
UIS stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
This article originally published on Zacks Investment Research (zacks.com).
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