Unisys UIS shares have increased 29.8% year to date, underperforming the Zacks Computer & Technology sector’s appreciation of 33.1% but outperforming the Zacks Computers – IT Services industry’s return of 19.4%.

UIS shares have also outperformed peers like Accenture ACN, Roper Technologies ROP and Cerence CRNC in the same time frame. While ACN and ROP shares have increased 2.5% and 0.6%, respectively, CRNC shares have lost 54.4% year to date.

UIS’s performance can be attributed to strong market demand for AI and cloud transformation, UIS’s innovative solutions and improved operational efficiency.

Innovative Solutions Portfolio Aids UIS Prospects

Unisys’ innovation-driven approach positions it to meet the growing demand for AI-enabled solutions. With over 120 active AI projects spanning diverse industries, Unisys delivers tailored, cutting-edge offerings. UIS’ generative AI-powered tools, like the Unisys Service Experience Accelerator and custom education companions, address specific client needs while enhancing operational capabilities.

Unisys’ advancements in logistics optimization are noteworthy. It is leveraging AI and quantum annealing to enhance its cargo solutions, thus expanding its footprint in the travel and transportation sectors.

Unisys is also benefiting from strong growth in new business Total Contract Value (TCV), driven by increased new client acquisitions and expansion of existing client relationships. This momentum, combined with UIS’ focus on operational efficiency, has boosted gross margin and non-GAAP profitability.

Industry recognition, such as inclusion in Avasant’s Digital Services RadarView, underscores Unisys’s standing as a trusted name.

UIS’ Earnings Estimates Indicate Y/Y Losses

For 2024, UIS expects revenue growth in constant currency to range between a decrease of 1.5% and an increase of 1.5%. In reported terms, revenue growth is expected to be between a decrease of 1% and an increase of 2%. It is expected to be a result of UIS’ portfolio streamlining efforts, higher legal and environmental costs and fluctuations in working capital.

UIS has updated its non-GAAP operating margin guidance range to 6.5% - 8.5%, up from its previous estimate of 5.5% - 7.5%, primarily due to higher expected L&S revenues.

The Zacks Consensus Estimate for fourth-quarter 2024 revenues is pegged at $564 million, indicating 1.15% year-over-year growth. The consensus mark for earnings is currently pegged at 9 cents per share, unchanged over the past 90 days, and indicating a year-over-year loss of 82.35%.

The Zacks Consensus Estimate for 2024 revenues is pegged at $2.03 billion, indicating 0.58% year-over-year growth. The consensus mark for earnings is currently pegged at 31 cents per share, unchanged over the past 30 days, and indicating a year-over-year loss of 48.33%.

UIS shares have beaten the Zacks Consensus Estimate in three of the trailing four quarters and missed once, the average surprise being 50.58%.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

What Should Investors Do With UIS Stock?

UIS benefits from its innovative portfolio, strong growth in new business TCV and operational efficiency, positioning it as a competitive player.

UIS currently has a Zacks Rank #2 (Buy) and Growth Score of B, a favorable combination that offers a strong investment opportunity, per the Zacks proprietary methodology. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Accenture PLC (ACN) : Free Stock Analysis Report

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