Maxim Group analyst Matthew Galinko has maintained their neutral stance on UIS stock, giving a Hold rating on May 8.
Matthew Galinko has given his Hold rating due to a combination of factors impacting Unisys’s financial performance and future outlook. Although Unisys’s first-quarter results for 2024 showcased revenues that fell short of expectations, the adjusted EBITDA was better than anticipated, indicating effective cost management despite a challenging revenue mix. The company’s revenue declined by 5.5% year-over-year in this quarter, which was largely attributed to a significant drop in License & Support revenue. This decline was set against a particularly strong prior year comparison, making the decrease more pronounced.
Despite these challenges, there’s an expectation of revenue growth in the second half of 2024, driven by the contribution of new client acquisitions and the maturation of projects in the pipeline. However, Galinko has slightly lowered revenue estimates for 2024 and 2025 due to the anticipated back-end loaded nature of this growth. Unisys’s financial position, with a relatively stable cash and debt situation, suggests no immediate capital raise is necessary. The Hold rating reflects a balanced risk/reward profile, with the prospect of flat revenue growth and a potential decline in non-GAAP operating margin due to the current revenue mix.
In another report released on May 8, Canaccord Genuity also maintained a Hold rating on the stock with a $5.00 price target.
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Unisys (UIS) Company Description:
Unisys Corp. is a global information technology company that builds high-performance, security-centric solutions for clients across the government, financial services and commercial markets. It operates through the following segments: Services and Technology. The Services segment consists of cloud and infrastructure services, application services, and business process outsourcing services. The Technology segment designs and develops software and offers hardware and other related products. The company was founded in 1986 and is headquartered in Blue Bell, PA.
