On Dec 2, Zacks Investment Research updated the research report on information technology firm Unisys Corporation UIS.
The information technology industry is presently undergoing a transition phase, forging new disruptive trends in cloud mobility, Big Data, social computing and increasing awareness of cyber security. In order to capitalize on the trends, Unisys is rationalizing its services and solution portfolio by shifting its offerings to cloud-based and software-as-a-service delivery models. The company is concentrating on business opportunities in fewer, more profitable markets in the IT marketplace.
In order to drive future growth, Unisys is focusing its resources and investments in four targeted, high-potential market areas, including security (IT security and physical security); data center transformation and outsourcing services; end-user outsourcing and support services; and applications modernization and outsourcing services. As it seeks to keep up with the evolution in the IT industry, the company’s services unit looks set to take advantage of growth prospects in higher-margin services. The company has also secured quite a few contracts in these segments that should propel top-line growth in the coming quarters.
Unisys has also been restructuring its business to improve profitability. This restructuring strategy includes selling non-core businesses and revamping its sales strategy, while investing in a few higher-growth areas such as outsourcing. We expect the company to continue with its cost-control initiatives and put greater effort toward sales growth, as it strives to overcome its operational weaknesses. Unisys is focusing more on building specialized industry skills and resources required to win industry-specific project opportunities.
The company is investing heavily in developing a team dedicated to pursuing growth opportunities for application-managed services both for existing and new clients. These application-based managed services capability will enable this Zacks Rank #3 (Hold) stock to more effectively pursue long-term outsourcing opportunities, as well as associated application modernization and implementation project work.
Some better-ranked stocks in the IT services industry that look promising at the moment include CDW Corporation. CDW, Computer Task Group Inc CTG, and EPAM Systems, Inc. EPAM, each carrying a Zacks Rank #2 (Buy).
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