CTSH  Cognizant Technology Solutions...

Exchange

NASDAQ

Sector

Technology

Industry

EDP Services

Market Cap.

35.18B

Vuru Grade

75.11/100

Current Price

$57.96
-0.14 (-0.24%)

Growth Price

$51.80
Overvalued by 10.62%

Stability Price

$37.97
Overvalued by 34.49%

Company Metrics

  • P/E 22.73
  • P/S 2.61
  • P/B 3.29
  • EPS 2.55
  • Cash ROIC 33.97%
  • Cash Ratio 1.82
  • Dividend 0 / 0%
  • Avg. Vol. 6.36M
  • Shares 606.97M
  • Market Cap. 35.18B

Company Description

Cognizant Technology Solutions Corporation provides information technology (IT) consulting and technology services, as well as outsourcing services in North America, Europe, and Asia. Its IT consulting and technology services include business and knowledge process consulting; IT strategy consulting; technology consulting; application design, development, integration, and re-engineering, such as co... more


Download 10 Years of Financial Statements:
Income Statement   Balance Sheet   Cash Flow

News

Wedbush Encouraged on Cognizant Technology Solutions Corp (CTSH) Following CFO ...
Smarter Analyst - Feb 17, 2017
Following Cognizant Technology Solutions Corp (NASDAQ:CTSH) CFO's “bullish” presentation at a rival's conference Wednesday evening, Wedbush analyst Moshe Katri is out with a positive take on the information technology and consulting firm.
Cognizant Technology Solutions Corp (CTSH) Position Cut by Suncoast Equity ... - BNB Daily (blog)
Brokerages Set Cognizant Technology Solutions Corp (CTSH) Target Price at $61.85 - Chaffey Breeze
Oppenheimer Trims Price Target for Cognizant Technology Solutions Corp (CTSH ...
Smarter Analyst - Feb 6, 2017
Oppenheimer analyst Glenn Greene offers an introspective into Cognizant Technology Solutions Corp (NASDAQ:CTSH) ahead of fourth-quarter results due this Wednesday, February 8th before market open, and what earnings will mean to the firm in a new ...
Cognizant Technology Solutions Corporation (CTSH) Moves Lower on Volume Spike ... - Equities.com
Why to Keeping Eye on Oracle Corporation (ORCL), Cognizant Technology ... - StockNewsJournal
Cognizant: It's Time To Reward The Shareholders
Seeking Alpha - Feb 10, 2017
Cognizant also reiterated its emphasis on what it describes as digital solutions and some of that emphasis appears to have resonated with conference call listeners.
Cognizant Technology shakes up board under activist pressure - MarketWatch
Cantor Expects Cognizant Technology Solutions Corp (CTSH) to Return to Above ... - Smarter Analyst
Franklin Resources Inc Buys Time Warner, Cognizant Technology Solutions ...
Nasdaq - Feb 16, 2017
Franklin Resources Inc initiated holdings in LivaNova PLC. The purchase prices were between $41.35 and $60.44, with an estimated average price of $49.13.
Cortland Associates Inc Buys Cognizant Technology Solutions Corp, Centene Corp ...
Nasdaq - Jan 27, 2017
Cortland Associates Inc initiated holdings in Progressive Corp. The purchase prices were between $30.88 and $35.74, with an estimated average price of $33.07.
Cognizant Reports Fourth Quarter and Full Year 2016 Results
PR Newswire (press release) - Feb 8, 2017
"As we enter 2017, the time is right for us to accelerate the shift to digital services and solutions to meet the growing demands from our clients to transform their business models in the face of the rapid business and technology shifts disrupting ...
Alan Fournier Buys Cognizant Technology Solutions, The Michaels, Procter ...
Nasdaq - Feb 15, 2017
Alan Fournier initiated holdings in Cognizant Technology Solutions Corp. The purchase prices were between $49.71 and $57.1, with an estimated average price of $53.52.
Highfields Capital Management Lp Buys Teva Pharmaceutical Industries, FedEx ... - GuruFocus.com
Cognizant Technology Solutions Corporation (CTSH) Moves Lower on Volume Spike ...
Equities.com - Feb 14, 2017
Cognizant Technology Solutions Corporation (CTSH) traded on unusually high volume on Feb. 14, as the stock lost 0.49% to close at $57.36.
Trading Options During Earnings in Cognizant Technology Solutions Corporation ... - CML News
Impact of Brokerage Rating on Cognizant Technology Solutions Corporation(CTSH) - Highland Mirror
Richard Pzena Buys Cognizant Technology Solutions, Cigna, Hilton Worldwide ...
GuruFocus.com - Feb 10, 2017
New York, NY, based Investment company Richard Pzena buys Cognizant Technology Solutions, Cigna, Hilton Worldwide Holdings, McKesson, Essendant, Allstate, Aspen Insurance Holdings, Masonite International, Owens & Minor, TriMas, sells Seagate Technology ...
Cognizant Technology Solutions Enters Oversold Territory (CTSH)
Nasdaq - Jan 31, 2017
In trading on Tuesday, shares of Cognizant Technology Solutions Corp. (Symbol: CTSH) entered into oversold territory, hitting an RSI reading of 28.4, after changing hands as low as $51.52 per share.
Growth Rate Assumed by Market

We did a reverse valuation to calculate the growth rate the market is assuming for CTSH to be considered fairly valued at its current market price. It's useful to compare this to the growth rate we're assuming for the Growth Price.

Future Free Cash Flow Growth Rate

This is the annual growth rate we've applied to calculate CTSH's Free Cash Flow for the next 10 years. To calculate it, we looked at several time periods of the last 10 years. Feel free to adjust it, but we limit the initial growth rate to 20% and slow it down over the years. Otherwise, long-term sustainability issues come into play.

Discount Rate

The discount rate is the annual rate of return an investor requires to take the risk of investing in a single stock. To account for that risk, this should be above 8-10%, as this is the avg. annual rate of return for the S&P500 over the past 100 years.

$57.96 Current Price

$51.80 Growth Price (DCF)

Overvalued by 10.62%


Growth Rate Assumed by Market: 18.74%


Future Free Cash Flow Growth Rate: 15.0%


Discount Rate: 15.0%


Show Free Cash Flow numbers

$37.97 Stability Price (EPV)

Overvalued by 34.49%


Discount Rate: 15.0%

$6.79 NCA Price

Overvalued by 88.29%

$95.52 Book Price

Undervalued by 64.80%


Excellent Cash Return on Invested Capital over the past 5 years

CTSH has efficiently invested its financial resources in buildings, projects, and equipment, resulting in strong returns. Annual Reports can be useful in identifying the cause of one-time events and future sustainability.

CTSH has created $33.97 of cash for every $100 invested.
Figures in USD. Fiscal year ends in December
20112012201320142015
Free Cash Flow 586.93M 838.12M 1.16B 1.26B 1.88B
divided by
Invested Capital 1.87B 2.28B 2.69B 5.35B 5.40B
Cash ROIC 31.45% 36.75% 43.25% 23.56% 34.81%

Excellent Return on Equity over the past 5 years

Over the past 5 years, CTSH has generated strong profits with money shareholders have invested. This is considered one of the best indicators of quality management. Beware of extremely high Return on Equity (> 50%) as this is often unsustainable.

CTSH has generated $20.03 of Earnings for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in December
20112012201320142015
Net Income 883.62M 1.05B 1.23B 1.44B 1.62B
divided by
Stockholders' Equity 3.95B 4.85B 6.14B 7.74B 9.28B
Return on Equity 22.35% 21.66% 20.02% 18.59% 17.50%

Excellent Business Performance over the past 10 years

CTSH has been able to maintain profitability in good times and bad. This could mean CTSH has an extremely strong business or has the ability to scale down costs when needed. This should be a fairly resilient business, but double check for future sustainability by looking at its Risk Factors in the Annual Report.

CTSH has created positive free cash flow for 9 or more of the past 10 years.
Figures in USD. Fiscal year ends in December
2006200720082009201020112012201320142015
Free Cash Flow 148.14M 161.85M 260.30M 595.69M 579.14M 586.93M 838.12M 1.16B 1.26B 1.88B

Very Strong Balance Sheet

CTSH has more Cash than its Total Liabilities, resulting in $1.91 Net Cash per share. In other words, if you buy CTSH today, the price you're paying for shares is actually $56.05 because $1.91 of Cash is included in the current share price. This much Cash is very healthy. It can help CTSH sustain itself in the face of any economic turmoil and makes a stock buyback more of a possibility.
Figures in USD. Fiscal year ends in December
2006200720082009201020112012201320142015
Cash 648.16M 670.43M 762.58M 1.40B 2.23B 2.43B 2.86B 3.75B 3.77B 4.95B
Current Assets 1.04B 1.24B 1.47B 2.31B 3.52B 4.09B 4.81B 6.15B 6.75B 7.91B
Total Assets 1.33B 1.84B 2.37B 3.34B 4.58B 5.51B 6.52B 8.21B 11.72B 13.07B
Current Liabilities 249.50M 340.68M 387.58M 646.61M 930.73M 1.21B 1.38B 1.77B 2.59B 2.71B
Total Liabilities 252.48M 370.10M 408.98M 685.06M 998.64M 1.56B 1.67B 2.07B 3.98B 3.79B
Stockholder' Equity 1.07B 1.47B 1.97B 2.65B 3.58B 3.95B 4.85B 6.14B 7.74B 9.28B
Current Ratio 4.17 3.65 3.79 3.57 3.78 3.38 3.50 3.46 2.60 2.91
TL-to-TA 0.19 0.20 0.17 0.21 0.22 0.28 0.26 0.25 0.34 0.29

Consistent Reinvestment of Profits over the past 10 years

CTSH has consistently retained profits. This may put CTSH in a strong position to invest for the future, by buying new machinery, investing in R&D or a number of other options. By effectively using these earnings, CTSH can greatly improve their long-term economic picture.
Figures in USD. Fiscal year ends in December
2006200720082009201020112012201320142015
Retained Earnings 650.28M 999.56M 1.43B 1.97B 2.70B 3.58B 4.63B 5.86B 7.30B 8.93B
Retained Earnings Growth - 53.71% 43.10% 37.40% 37.32% 32.74% 29.34% 26.51% 24.55% 22.24%

Potential Competitive Advantage over the past 10 years

CTSH potentially has a competitive advantage. This could be strong branding, the ability to keep costs low, or some other characteristic that is hard to replicate. Look at its future prospects to determine sustainability and whether the economic moat will strengthen.

$15.01 of every $100 of Revenue have been pure profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2006200720082009201020112012201320142015
Net Income 232.80M 350.13M 430.85M 534.96M 733.54M 883.62M 1.05B 1.23B 1.44B 1.62B
divided by
Revenue 1.42B 2.14B 2.82B 3.28B 4.59B 6.12B 7.35B 8.84B 10.26B 12.42B
Net Profit Margin 16.34% 16.40% 15.30% 16.32% 15.97% 14.44% 14.31% 13.89% 14.02% 13.08%

Varying Pricing Power over the past 10 years

CTSH has maintained substantial gross margins, suggesting that they have been able to set prices without consideration of the cost of goods sold. However, there is a substantial variation in their Gross Profit Margins from year-to-year, which indicates inconsistent performance. Look at reasons for this inconsistency to determine the likelihood of future sustainability.

$48.06 of every $100 worth of sales have been Gross Profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2006200720082009201020112012201320142015
Gross Profit 636.34M 929.54M 1.24B 1.43B 1.94B 6.12B 3.07B 3.58B 4.12B 4.98B
divided by
Revenue 1.42B 2.14B 2.82B 3.28B 4.59B 6.12B 7.35B 8.84B 10.26B 12.42B
Gross Margin 44.68% 43.53% 44.15% 43.59% 42.20% 100.00% 41.76% 40.46% 40.16% 40.08%

Medium Capital Intensity over the past 10 years

CTSH has used a reasonable amount of their financial resources to invest in facilities and equipment required to produce its goods and services. This isn't perfect, but it shouldn't be an area of concern unless this number is strongly trending upwards.

29.33% of Profits are being spent on Capital Expenditures, like Property, Plant, & Equipment, required to run the business.
Figures in USD. Fiscal year ends in December
2006200720082009201020112012201320142015
Capital Expenditure 104.73M 182.47M 169.41M 76.64M 185.51M 288.22M 334.47M 261.63M 212.20M 272.80M
divided by
Net Income 232.80M 350.13M 430.85M 534.96M 733.54M 883.62M 1.05B 1.23B 1.44B 1.62B
Capital Expenditure Ratio 44.99% 52.11% 39.32% 14.33% 25.29% 32.62% 31.82% 21.30% 14.74% 16.80%

No Dividend History over the past 10 years

CTSH has never distributed dividends or has recently suspended their dividend distribution.
Figures in USD. Fiscal year ends in December
2006200720082009201020112012201320142015
Dividend Paid - - - - - - - - - -
divided by
Shares Outstanding 301.12M 303.59M 298.94M 301.12M 309.14M 310.35M 611.72M 609.66M 612.49M 613.30M
Dividend Paid Per Share - - - - - - - - - -
Price at Year End 38.58 34.92 17.69 45.48 73.84 64.31 72.31 100.09 53.36 61.00
Dividend Yield - - - - - - - - - -

History of Stock Buybacks over the past 10 years

CTSH has some history of delivering increased value for shareholders in the form of stock buybacks. These have helped improve financial metrics and increase each shareholders' relative ownership stake in the company, due to fewer shares outstanding and holding the same number of shares.
Figures in USD. Fiscal year ends in December
2006200720082009201020112012201320142015
Shares Outstanding 301.12M 303.59M 298.94M 301.12M 309.14M 310.35M 611.72M 609.66M 612.49M 613.30M
Stock Bought Back - -0.81% 1.56% -0.72% -2.59% -0.39% -49.27% 0.34% -0.46% -0.13%
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