CTSH  Cognizant Technology Solutions...

Exchange

NASDAQ

Sector

Technology

Industry

EDP Services

Market Cap.

43.87B

Vuru Grade

73.71/100

Current Price

$74.27
+0.33 (+0.45%)

Growth Price

$44.52
Overvalued by 40.05%

Stability Price

$25.73
Overvalued by 65.35%

Company Metrics

  • P/E 23.83
  • P/S 3.09
  • P/B 4.16
  • EPS 3.12
  • Cash ROIC 31.63%
  • Cash Ratio 2.14
  • Dividend 0.6 / 0.81%
  • Avg. Vol. 2.88M
  • Shares 590.68M
  • Market Cap. 43.87B

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

Cognizant Technology Solutions (CTSH) Q2 2017 Results - Earnings Call Transcript
Seeking Alpha - Aug 3, 2017
Ladies and gentlemen, welcome to the Cognizant Technology Solutions second quarter 2017 earnings conference call. All lines have been placed on mute to prevent any background noise.
Cognizant shrugs off healthcare worry, tightens FY revenue view - Reuters
Cognizant Technology Rides the Digital Enterprise Wave - Motley Fool
June 2018 Options Now Available For Cognizant Technology Solutions (CTSH)
Nasdaq - Oct 10, 2017
Investors in Cognizant Technology Solutions Corp. (Symbol: CTSH) saw new options become available today, for the June 2018 expiration.
Cognizant Technology Solutions Corp (NASDAQ:CTSH) 2017 Q2 Sentiment - WeeklyHub
Cognizant Technology Solutions Corp (NASDAQ:CTSH) Institutional Investors ... - BZ Weekly
Analysts take a look at Cognizant Technology Solutions Corp (NASDAQ:CTSH ...
BZ Weekly - 6 hours ago
Investors sentiment decreased to 0.76 in Q2 2017. Its down 0.15, from 0.91 in 2017Q1. It is negative, as 53 investors sold Cognizant Technology Solutions Corp shares while 330 reduced holdings. 86 funds opened positions while 205 raised stakes. 503.05 ...
Cognizant Technology Solutions Corporation (CTSH) Moves Higher on Volume Spike ...
Equities.com - Oct 4, 2017
Cognizant Technology Solutions Corporation has a P/B ratio of 4.09. It also has a P/E ratio of 23.2. Cognizant Technology Solutions Corp is an IT services provider. The company provides services such as technology consulting, application outsourcing, ...
Could Cognizant Technology Solutions Corp (CTSH) Go Down After Touching Record ... - Weekly Register
EPS for Cognizant Technology Solutions Corp (CTSH) Expected At $0.85
WeeklyHub - Oct 14, 2017
Investors sentiment decreased to 0.76 in 2017 Q2. Its down 0.15, from 0.91 in 2017Q1. It worsened, as 53 investors sold Cognizant Technology Solutions Corp shares while 330 reduced holdings. 86 funds opened positions while 205 raised stakes. 503.05 ...
The best days of IT are still ahead: Cognizant Technology Solutions CEO
Forbes India - Sep 25, 2017
This includes the acquisition of US-based TriZetto Corp two years ago, which D'Souza, 49, says has helped Cognizant's health care unit touch 160 million Americans in some way. The $2.7 billion buy is an example of how technology's rapid evolution is ...
Pennant Capital Management LLC Cut Stake in Cognizant Technology Solutio (CTSH ... - WeeklyHub
Dalton Investments LLC Acquires 21800 Shares of Cognizant Technology Solutions ... - The Ledger Gazette
After Reaching Milestone, Is Cognizant Tech Solutions Class A (NASDAQ:CTSH)'s ...
BZ Weekly - Oct 18, 2017
Investors sentiment decreased to 0.76 in Q2 2017. Its down 0.15, from 0.91 in 2017Q1. It turned negative, as 53 investors sold Cognizant Technology Solutions Corp shares while 330 reduced holdings. 86 funds opened positions while 205 raised stakes.
Cognizant Technology Solutions Corporation - Іnsіdеr Cаr Nеws
State Street Corp Decreases Stake in Cognizant Technology Solutions ... - The Ledger Gazette
Zacks: Analysts Anticipate Cognizant Technology Solutions Corp (CTSH) to ...
StockNewsTimes - Sep 29, 2017
Cognizant Technology Solutions Corp logo Equities research analysts predict that Cognizant Technology Solutions Corp (NASDAQ:CTSH) will post earnings per share of $0.95 for the current fiscal quarter, according to Zacks Investment Research.
Insiders are Gradually Selling Cognizant Technology Solutions Corporation ... - Hi-tech Beacon
Insider Selling: Cognizant Technology Solutions Corporation (NASDAQ:CTSH ... - The Ledger Gazette
Cognizant Technology Solutions Corp (CTSH) Can't Burn Your Long Portfolio ...
BZ Weekly - Oct 8, 2017
Investors sentiment decreased to 0.76 in 2017 Q2. Its down 0.15, from 0.91 in 2017Q1. It is negative, as 53 investors sold Cognizant Technology Solutions Corp shares while 330 reduced holdings. 86 funds opened positions while 205 raised stakes. 503.05 ...
Exxon Mobil (XOM) Shareholder Wetherby Asset Management Cut Its Holding by ...
BZ Weekly - Oct 18, 2017
M Holdings Securities Inc decreased its stake in Cognizant Technology Solutions Corp Cl A (CTSH) by 41.2% based on its latest 2017Q2 regulatory filing with the SEC.
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.

$74.27 Current Price

$44.52 Growth Price (DCF)

Overvalued by 40.05%


Growth Rate Assumed by Market: 32.94%


Future Free Cash Flow Growth Rate: 15.0%


Discount Rate: 15.0%


Show Free Cash Flow numbers

$25.73 Stability Price (EPV)

Overvalued by 65.35%


Discount Rate: 15.0%

$8.58 NCA Price

Overvalued by 88.45%

$100.47 Book Price

Undervalued by 35.28%


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 $31.63 of cash for every $100 invested.
Figures in USD. Fiscal year ends in December
20122013201420152016
Free Cash Flow 838.12M 1.16B 1.26B 1.88B 1.32B
divided by
Invested Capital 2.28B 2.69B 5.35B 5.40B 6.68B
Cash ROIC 36.75% 43.25% 23.56% 34.81% 19.79%

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 $18.45 of Earnings for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in December
20122013201420152016
Net Income 1.05B 1.23B 1.44B 1.62B 1.55B
divided by
Stockholders' Equity 4.85B 6.14B 7.74B 9.28B 10.73B
Return on Equity 21.66% 20.02% 18.59% 17.50% 14.48%

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
2007200820092010201120122013201420152016
Free Cash Flow 161.85M 260.30M 595.69M 579.14M 586.93M 838.12M 1.16B 1.26B 1.88B 1.32B

Very Strong Balance Sheet

CTSH has more Cash than its Total Liabilities, resulting in $2.77 Net Cash per share. In other words, if you buy CTSH today, the price you're paying for shares is actually $71.50 because $2.77 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
2007200820092010201120122013201420152016
Cash 670.43M 762.58M 1.40B 2.23B 2.43B 2.86B 3.75B 3.77B 4.95B 5.17B
Current Assets 1.24B 1.47B 2.31B 3.52B 4.09B 4.81B 6.15B 6.75B 7.91B 8.60B
Total Assets 1.84B 2.37B 3.34B 4.58B 5.51B 6.52B 8.21B 11.72B 13.07B 14.26B
Current Liabilities 340.68M 387.58M 646.61M 930.73M 1.21B 1.38B 1.77B 2.59B 2.71B 2.42B
Total Liabilities 370.10M 408.98M 685.06M 998.64M 1.56B 1.67B 2.07B 3.98B 3.79B 3.53B
Stockholder' Equity 1.47B 1.97B 2.65B 3.58B 3.95B 4.85B 6.14B 7.74B 9.28B 10.73B
Current Ratio 3.65 3.79 3.57 3.78 3.38 3.50 3.46 2.60 2.91 3.56
TL-to-TA 0.20 0.17 0.21 0.22 0.28 0.26 0.25 0.34 0.29 0.25

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
2007200820092010201120122013201420152016
Retained Earnings 999.56M 1.43B 1.97B 2.70B 3.58B 4.63B 5.86B 7.30B 8.93B 10.48B
Retained Earnings Growth - 43.10% 37.40% 37.32% 32.74% 29.34% 26.51% 24.55% 22.24% 17.40%

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.

$14.52 of every $100 of Revenue have been pure profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Net Income 350.13M 430.85M 534.96M 733.54M 883.62M 1.05B 1.23B 1.44B 1.62B 1.55B
divided by
Revenue 2.14B 2.82B 3.28B 4.59B 6.12B 7.35B 8.84B 10.26B 12.42B 13.49B
Net Profit Margin 16.40% 15.30% 16.32% 15.97% 14.44% 14.31% 13.89% 14.02% 13.08% 11.51%

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.

$47.58 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
2007200820092010201120122013201420152016
Gross Profit 929.54M 1.24B 1.43B 1.94B 6.12B 3.07B 3.58B 4.12B 4.98B 5.38B
divided by
Revenue 2.14B 2.82B 3.28B 4.59B 6.12B 7.35B 8.84B 10.26B 12.42B 13.49B
Gross Margin 43.53% 44.15% 43.59% 42.20% 100.00% 41.76% 40.46% 40.16% 40.08% 39.88%

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.

26.76% 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
2007200820092010201120122013201420152016
Capital Expenditure 182.47M 169.41M 76.64M 185.51M 288.22M 334.47M 261.63M 212.20M 272.80M 300.00M
divided by
Net Income 350.13M 430.85M 534.96M 733.54M 883.62M 1.05B 1.23B 1.44B 1.62B 1.55B
Capital Expenditure Ratio 52.11% 39.32% 14.33% 25.29% 32.62% 31.82% 21.30% 14.74% 16.80% 19.32%

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
2007200820092010201120122013201420152016
Dividend Paid - - - - - - - - - -
divided by
Shares Outstanding 303.59M 298.94M 301.12M 309.14M 310.35M 611.72M 609.66M 612.49M 613.30M 610.00M
Dividend Paid Per Share - - - - - - - - - -
Price at Year End 34.92 17.69 45.48 73.84 64.31 72.31 100.09 53.36 61.00 56.03
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
2007200820092010201120122013201420152016
Shares Outstanding 303.59M 298.94M 301.12M 309.14M 310.35M 611.72M 609.66M 612.49M 613.30M 610.00M
Stock Bought Back - 1.56% -0.72% -2.59% -0.39% -49.27% 0.34% -0.46% -0.13% 0.54%
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