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Cognizant Technology Solutions

Nasdaq:CTSH
Snowflake Description

Excellent balance sheet with moderate growth potential.

The Snowflake is generated from 30 checks in 5 different areas, read more below.
CTSH
Nasdaq
$48B
Market Cap
  1. Home
  2. US
  3. Software
Company description

Cognizant Technology Solutions Corporation, a professional services company, provides consulting and technology, and outsourcing services worldwide. The last earnings update was 108 days ago. More info.


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CTSH Share Price and Events
Price Volatility
CTSH
Industry
5yr Volatility vs Market
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CTSH Value

 Is Cognizant Technology Solutions undervalued based on future cash flows and its price relative to the stock market?

Value is all about what a company is worth versus what price it is available for. If you went into a grocery store and all the bananas were on sale at half price, they could be considered undervalued.
INTRINSIC VALUE BASED ON FUTURE CASH FLOWS
Here we compare the current share price of Cognizant Technology Solutions to its discounted cash flow analysis.value.

The discounted cash flow value is simply looking at what the company is worth today, based on estimates of how much money it is expected to make in the future.
Raw Data

Below are the data sources, inputs and calculation used to determine the intrinsic value for Cognizant Technology Solutions.

NasdaqGS:CTSH Discounted Cash Flow Data Sources
Data Point Source Value
Valuation Model 2 Stage Free Cash Flow to Equity
Levered Free Cash Flow Average of 30 Analyst Estimates (S&P Global) See below
Discount Rate (Cost of Equity) See below 9.5%
Perpetual Growth Rate 10-Year US Government Bond Rate 3%

An important part of a discounted cash flow is the discount rate, below we explain how it has been calculated.

Calculation of Discount Rate/ Cost of Equity for NasdaqGS:CTSH
Data Point Calculation/ Source Result
Risk-Free Rate 10-Year US Govt Bond Rate 3%
Equity Risk Premium S&P Global 7.1%
IT Unlevered Beta Simply Wall St/ S&P Global 0.91
Re-levered Beta = Unlevered beta (1 + (1- tax rate) (Debt/Equity))
= 0.914 (1 + (1- 21%) (1.61%))
0.926
Levered Beta Levered Beta limited to 0.8 to 2.0
(practical range for a stable firm)
0.93
Discount Rate/ Cost of Equity = Cost of Equity = Risk Free Rate + (Levered Beta * Equity Risk Premium)
= 2.95% + (0.926 * 7.05%)
9.47%

Discounted Cash Flow Calculation for NasdaqGS:CTSH using 2 Stage Free Cash Flow to Equity Model

The calculations below outline how an intrinsic value for Cognizant Technology Solutions is arrived at by discounting future cash flows to their present value using the 2 stage method. We use analyst's estimates of cash flows going forward 5 years for the 1st stage, the 2nd stage assumes the company grows at a stable rate into perpetuity.

NasdaqGS:CTSH DCF 1st Stage: Next 5 year cash flow forecast
2018 2019 2020 2021 2022
Levered FCF (USD, Millions) 2,138.59 2,349.88 2,622.76 1,529.00 1,933.00
Source Analyst x7 Analyst x8 Analyst x5 Analyst x1 Analyst x1
Present Value
Discounted (@ 9.47%)
1,953.50 1,960.73 1,999.02 1,064.51 1,229.31
Present value of next 5 years cash flows $8,207
NasdaqGS:CTSH DCF 2nd Stage: Terminal Value
Calculation Result
Terminal Value = FCF2022 × (1 + g) ÷ (Discount Rate – g)
= $1,933 × (1 + 2.95%) ÷ (9.47% – 2.95%)
$30,499
Present Value of Terminal Value = Terminal Value ÷ (1 + r)5
= $30,499 ÷ (1 + 9.47%)5
$19,396
NasdaqGS:CTSH Total Equity Value
Calculation Result
Total Equity Value = Present value of next 5 years cash flows + Terminal Value
= $8,207 + $19,396
$27,603
Equity Value per Share
(USD)
= Total value / Shares Outstanding
= $27,603 / 586
$47.11
NasdaqGS:CTSH Discount to Share Price
Calculation Result
Value per share (USD) From above. $47.11
Current discount Discount to share price of $82.74
= -1 x ($82.74 - $47.11) / $47.11
-75.6%

Learn more about our DCF calculations in Simply Wall St’s analysis model .

  • The current share price of Cognizant Technology Solutions is above its future cash flow value.
Often investors are willing to pay a premium for a company that has a high dividend or the potential for future growth.
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing when they are out of season, or how much your home is worth.

The amount the stock market is willing to pay for Cognizant Technology Solutions's earnings, growth and assets is considered below, and whether this is a fair price.
Price based on past earnings
Are Cognizant Technology Solutions's earnings available for a low price, and how does this compare to other companies in the same industry?
Raw Data
NasdaqGS:CTSH PE (Price to Earnings) Ratio Data Sources
Data Point Source Value
Earnings Per Share * Company Filings () in USD $2.49
NasdaqGS:CTSH Share Price ** NasdaqGS (2018-07-17) in USD $82.74
United States of America IT Industry PE Ratio Median Figure of 119 Publicly-Listed IT Companies 24.71x
United States of America Market PE Ratio Median Figure of 7,808 Publicly-Listed Companies 18.38x

* Trailing twelve months (TTM) annual GAAP earnings per share excluding extraordinary items.

** Primary Listing of Cognizant Technology Solutions.

NasdaqGS:CTSH PE (Price to Earnings) Ratio Calculation
Calculation Outcome
PE Ratio

= NasdaqGS:CTSH Share Price ÷ EPS (both in USD)

= 82.74 ÷ 2.49

33.19x

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Cognizant Technology Solutions is overvalued based on earnings compared to the US IT industry average.
  • Cognizant Technology Solutions is overvalued based on earnings compared to the United States of America market.
Price based on expected Growth
Does Cognizant Technology Solutions's expected growth come at a high price?
Raw Data
NasdaqGS:CTSH PEG (Price to Earnings to Growth) Ratio Data Sources
Data Point Source Value
PE Ratio See PE Ratio Section 33.19x
Net Income Annual Growth Rate See Future Growth Section.
Line of Best Fit* through Consensus Estimate Earnings of 30 Analysts
10.9%per year
United States of America IT Industry PEG Ratio Median Figure of 93 Publicly-Listed IT Companies 2.26x
United States of America Market PEG Ratio Median Figure of 5,905 Publicly-Listed Companies 1.6x

*Line of best fit is calculated by linear regression .

NasdaqGS:CTSH PEG (Price to Earnings to Growth) Ratio Calculation
Calculation Outcome
PEG Ratio

= PE Ratio ÷ Net Income Annual Growth Rate

= 33.19x ÷ 10.9%

3.04x

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Cognizant Technology Solutions is poor value based on expected growth next year.
Price based on value of assets
What value do investors place on Cognizant Technology Solutions's assets?
Raw Data
NasdaqGS:CTSH PB (Price to Book) Ratio Data Sources
Data Point Source Value
Book Value per Share Company Filings () in USD $18.75
NasdaqGS:CTSH Share Price * NasdaqGS (2018-07-17) in USD $82.74
United States of America IT Industry PB Ratio Median Figure of 197 Publicly-Listed IT Companies 3.19x
United States of America Market PB Ratio Median Figure of 13,225 Publicly-Listed Companies 1.73x
NasdaqGS:CTSH PB (Price to Book) Ratio Calculation
Calculation Outcome
PB Ratio

= NasdaqGS:CTSH Share Price ÷ Book Value per Share (both in USD)

= 82.74 ÷ 18.75

4.41x

* Primary Listing of Cognizant Technology Solutions.

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Cognizant Technology Solutions is overvalued based on assets compared to the US IT industry average.
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Value checks
We assess Cognizant Technology Solutions's value by looking at:
  1. Is the discounted cash flow value less than 20%, or 40% of the share price? (2 checks) ( Click here or on bar chart for details of DCF calculation. )
  2. Is the PE ratio less than the market average, and/ or less than the IT industry average (and greater than 0)? (2 checks)
  3. Is the PEG ratio within a reasonable range (0 to 1)? (1 check)
  4. Is the PB ratio less than the IT industry average (and greater than 0)? (1 check)
  5. Cognizant Technology Solutions has a total score of 0/6, see the detailed checks below.

    Note: We use GAAP Earnings per Share in all our calculations including PE and PEG Ratio.

    Full details on the Value part of the Simply Wall St company analysis model.

CTSH Future Performance

 How is Cognizant Technology Solutions expected to perform in the next 1 to 3 years based on estimates from 30 analysts?

The future performance of a company is measured in the same way as past performance, by looking at estimated growth and how much profit it is expected to make.

Future estimates come from professional analysts. Just like forecasting the weather, they don’t always get it right!
Annual Growth Rate
10.9%
Expected annual growth in earnings.
Earnings growth vs Low Risk Savings
Is Cognizant Technology Solutions expected to grow at an attractive rate?
  • Cognizant Technology Solutions's earnings growth is expected to exceed the low risk savings rate of 3%.
Growth vs Market Checks
  • Cognizant Technology Solutions's earnings growth is positive but not above the United States of America market average.
  • Cognizant Technology Solutions's revenue growth is expected to exceed the United States of America market average.
Annual Growth Rates Comparison
Raw Data
NasdaqGS:CTSH Future Growth Rates Data Sources
Data Point Source Value (per year)
NasdaqGS:CTSH Future Earnings Growth Rate Line of Best Fit* through Consensus Estimate Earnings of 30 Analysts 10.9%
NasdaqGS:CTSH Future Revenue Growth Rate Line of Best Fit* through Consensus Estimate Revenue of 30 Analysts 7.3%
United States of America IT Industry Earnings Growth Rate Market Cap Weighted Average 15%
United States of America IT Industry Revenue Growth Rate Market Cap Weighted Average 8.3%
United States of America Market Earnings Growth Rate Market Cap Weighted Average 11.8%
United States of America Market Revenue Growth Rate Market Cap Weighted Average 6.2%

*Line of best fit is calculated by linear regression .

Industry and Market average data is calculated daily.

Learn more about our growth rate calculations in Simply Wall St’s analysis model.

Analysts growth expectations
Raw Data
NasdaqGS:CTSH Analysts Growth Expectations Data Sources
Data Point Source Value
Past Financials Company Filings (3 months ago) See Below
Future Estimates Average of up to 30 Analyst Estimates (S&P Global) See Below
All numbers in USD Millions and using Trailing twelve months (TTM) annual period rather than quarterly.
NasdaqGS:CTSH Future Estimates Data
Date (Data in USD Millions) Revenue Cash Flow Net Income * Avg. No. Analysts
2022-12-31 20,916 3,608 3,095 1
2021-12-31 19,686 3,323 2,880 1
2020-12-31 19,058 3,223 2,854 12
2019-12-31 17,661 3,012 2,623 29
2018-12-31 16,237 2,608 2,267 30
NasdaqGS:CTSH Past Financials Data
Date (Data in USD Millions) Revenue Cash Flow Net Income *
2018-03-31 15,176 2,518 1,467
2017-12-31 14,810 2,407 1,504
2017-09-30 14,444 2,175 1,938
2017-06-30 14,131 2,005 1,887
2017-03-31 13,831 1,850 1,669
2016-12-31 13,487 1,645 1,553
2016-09-30 13,258 1,731 1,561
2016-06-30 12,992 1,946 1,514
2016-03-31 12,707 2,036 1,682
2015-12-31 12,416 2,187 1,624
2015-09-30 11,926 1,788 1,563
2015-06-30 11,320 1,553 1,522

*GAAP earnings excluding extraordinary items.

Super high growth metrics
High Growth Checks
  • Cognizant Technology Solutions's earnings are expected to grow by 10.9% yearly, however this is not considered high growth (20% yearly).
  • Cognizant Technology Solutions's revenue is expected to grow by 7.3% yearly, however this is not considered high growth (20% yearly).
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can be gauged below. We look back 3 years and see if they were any good at predicting what actually occurred. We also show the highest and lowest estimates looking forward to see if there is a wide range.
Raw Data
NasdaqGS:CTSH Past and Future Earnings per Share
Data Point Source Value
Past Financials Company Filings (3 months ago) See Below
Future Estimates Average of up to 30 Analyst Estimates (S&P Global) See Below

All data from Cognizant Technology Solutions Company Filings, last reported 3 months ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

NasdaqGS:CTSH Future Estimates Data
Date (Data in USD Millions) EPS * EPS High Estimate EPS Low Estimate Avg. No. Analysts
2022-12-31 5.60 5.60 5.60 1.00
2021-12-31 5.15 5.15 5.15 1.00
2020-12-31 4.96 5.13 4.74 4.00
2019-12-31 4.54 4.79 4.28 16.00
2018-12-31 3.88 4.02 3.74 18.00
NasdaqGS:CTSH Past Financials Data
Date (Data in USD Millions) EPS *
2018-03-31 2.49
2017-12-31 2.54
2017-09-30 3.24
2017-06-30 3.13
2017-03-31 2.75
2016-12-31 2.56
2016-09-30 2.57
2016-06-30 2.49
2016-03-31 2.76
2015-12-31 2.67
2015-09-30 2.57
2015-06-30 2.50

*GAAP earnings excluding extraordinary items.

Performance in 3 years
In the same way as past performance we look at the future estimated return (profit) compared to the available funds. We do this looking forward 3 years.
  • Cognizant Technology Solutions is expected to efficiently use shareholders’ funds in the future (Return on Equity greater than 20%).
X
Future performance checks
We assess Cognizant Technology Solutions's future performance by looking at:
  1. Is the annual earnings growth rate expected to beat the low risk savings rate, plus a premium to keep pace with inflation?
  2. Is the annual earnings growth rate expected to beat the average growth rate in earnings of the United States of America market? (1 check)
  3. Is the annual revenue growth rate expected to beat the average growth rate in revenue of the United States of America market? (1 check)
  4. Is the annual earnings growth rate expected to be above 20%? (1 check)
  5. Is the annual revenue growth rate expected to be above 20%? (1 check)
  6. Is the Return on Equity in 3 years expected to be over 20%? (1 check)
Some of the above checks will fail if the company is expected to be loss making in the relevant year.
Cognizant Technology Solutions has a total score of 3/6, see the detailed checks below.

Note 1: We use GAAP Net Income Excluding Exceptional Items for our Earnings in all our calculations.

Full details on the Future part of the Simply Wall St company analysis model.

CTSH Past Performance

  How has Cognizant Technology Solutions performed over the past 5 years?

The past performance of a company can be measured by how much growth it has experienced and how much profit it makes relative to the funds and assets it has available.
Past earnings growth
Below we compare Cognizant Technology Solutions's growth in the last year to its industry (IT).
Past Earnings growth analysis
We also check if the company has grown in the past 5 years, and whether it has maintained that growth in the year.
  • Cognizant Technology Solutions's year on year earnings growth rate has been positive over the past 5 years.
  • Cognizant Technology Solutions's 1-year earnings growth is negative, it can't be compared to the 5-year average.
  • Cognizant Technology Solutions's 1-year earnings growth is negative, it can't be compared to the US IT industry average.
Earnings and Revenue History
Cognizant Technology Solutions's revenue and profit over the past 5 years is shown below, any years where they have experienced a loss will show up in red.
Raw Data

All data from Cognizant Technology Solutions Company Filings, last reported 3 months ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

NasdaqGS:CTSH Past Revenue, Cash Flow and Net Income Data
Date (Data in USD Millions) Revenue Net Income * G+A Expenses R&D Expenses
2018-03-31 15,176.00 1,467.00 2,696.00
2017-12-31 14,810.00 1,504.00 2,661.00
2017-09-30 14,444.00 1,938.00 2,686.00
2017-06-30 14,131.00 1,887.00 2,741.00
2017-03-31 13,831.00 1,669.00 2,733.00
2016-12-31 13,487.00 1,553.00 2,704.00
2016-09-30 13,257.50 1,560.80 2,660.10
2016-06-30 12,991.50 1,514.00 2,586.20
2016-03-31 12,706.60 1,682.10 2,544.20
2015-12-31 12,416.00 1,624.00 2,509.00
2015-09-30 11,925.70 1,563.10 2,412.50
2015-06-30 11,319.80 1,521.50 2,291.50
2015-03-31 10,751.80 1,473.30 2,162.40
2014-12-31 10,263.00 1,439.00 2,037.00
2014-09-30 9,875.99 1,400.73 1,924.90
2014-06-30 9,600.61 1,364.76 1,862.18
2014-03-31 9,244.75 1,293.27 1,799.81
2013-12-31 8,843.20 1,228.60 1,727.60
2013-09-30 8,435.92 1,183.03 1,678.85
2013-06-30 8,021.88 1,140.30 1,620.43
2013-03-31 7,655.86 1,091.82 1,596.67
2012-12-31 7,346.47 1,051.26 1,557.65
2012-09-30 7,061.96 1,012.61 1,508.36
2012-06-30 6,771.23 962.83 1,476.57
2012-03-31 6,461.25 918.94 1,406.51
2011-12-31 6,121.16 883.62 1,328.67
2011-09-30 5,768.05 849.66 1,256.13

*GAAP earnings excluding extraordinary items.

Performance last year
We want to ensure a company is making the most of what it has available. This is done by comparing the return (profit) to a company's available funds, assets and capital.
  • Cognizant Technology Solutions has not efficiently used shareholders’ funds last year (Return on Equity less than 20%).
  • Cognizant Technology Solutions used its assets more efficiently than the US IT industry average last year based on Return on Assets.
  • Cognizant Technology Solutions has improved its use of capital last year versus 3 years ago (Return on Capital Employed).
X
Past performance checks
We assess Cognizant Technology Solutions's performance over the past 5 years by checking for:
  1. Has earnings increased in past 5 years? (1 check)
  2. Has the earnings growth in the last year exceeded that of the IT industry? (1 check)
  3. Is the recent earnings growth over the last year higher than the average annual growth over the past 5 years? (1 check)
  4. Is the Return on Equity (ROE) higher than 20%? (1 check)
  5. Is the Return on Assets (ROA) above industry average? (1 check)
  6. Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent earnings report. Some checks require at least 3 or 5 years worth of data.
Cognizant Technology Solutions has a total score of 3/6, see the detailed checks below.

Note: We use GAAP Net Income excluding extraordinary items in all our calculations.

Full details on the Past part of the Simply Wall St company analysis model.

CTSH Health

 How is Cognizant Technology Solutions's financial health and their level of debt?

A company's financial position is much like your own financial position, it includes everything you own (assets) and owe (liabilities).

The boxes below represent the relative size of what makes up Cognizant Technology Solutions's finances.

The net worth of a company is the difference between its assets and liabilities.
Net Worth
  • Cognizant Technology Solutions is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
  • Cognizant Technology Solutions's cash and other short term assets cover its long term commitments.
Balance sheet
This treemap shows a more detailed breakdown of Cognizant Technology Solutions's finances. If any of them are yellow this indicates they may be out of proportion and red means they relate to one of the checks below.
Assets
Liabilities and shares
The 'shares' portion represents any funds contributed by the owners (shareholders) and any profits.
  • Low level of unsold assets.
  • Debt is covered by short term assets, assets are 11.6x debt.
Historical Debt
Nearly all companies have debt. Debt in itself isn’t bad, however if the debt is too high, or the company can’t afford to pay the interest on its debts this may have impacts in the future.

The graphic below shows equity (available funds) and debt, we ideally want to see the red area (debt) decreasing.

If there is any debt we look at the companies capability to repay it, and whether the level has increased over the past 5 years.
Raw Data

All data from Cognizant Technology Solutions Company Filings, last reported 3 months ago.

NasdaqGS:CTSH Past Debt and Equity Data
Date (Data in USD Millions) Total Equity Total Debt Cash & Short Term Investments
2018-03-31 10,988.00 773.00 4,830.00
2017-12-31 10,669.00 873.00 5,056.00
2017-09-30 10,979.00 823.00 4,713.00
2017-06-30 10,483.00 991.00 4,378.00
2017-03-31 9,983.00 1,209.00 4,274.00
2016-12-31 10,728.00 878.00 5,169.00
2016-09-30 10,292.30 896.60 4,858.60
2016-06-30 9,862.90 908.80 4,481.20
2016-03-31 9,612.30 1,020.90 4,451.70
2015-12-31 9,278.00 1,283.00 4,949.00
2015-09-30 8,827.00 950.00 4,050.70
2015-06-30 8,540.80 1,062.50 3,566.50
2015-03-31 8,178.50 1,075.00 3,349.80
2014-12-31 7,740.20 1,637.50 3,774.70
2014-09-30 7,381.71 0.00 4,618.48
2014-06-30 6,990.83 0.00 4,129.22
2014-03-31 6,622.96 0.00 3,864.98
2013-12-31 6,135.79 0.00 3,747.47
2013-09-30 5,648.28 0.00 3,360.60
2013-06-30 5,323.75 0.00 2,900.57
2013-03-31 5,215.93 0.00 2,744.45
2012-12-31 4,854.38 0.00 2,863.76
2012-09-30 4,572.37 0.00 2,631.75
2012-06-30 4,092.33 0.00 2,346.14
2012-03-31 4,367.25 0.00 2,491.20
2011-12-31 3,952.89 0.00 2,432.26
2011-09-30 3,939.52 0.00 2,291.28
  • Cognizant Technology Solutions's level of debt (7%) compared to net worth is satisfactory (less than 40%).
  • The level of debt compared to net worth has increased over the past 5 years (0% vs 7% today).
  • Debt is well covered by operating cash flow (325.7%, greater than 20% of total debt).
  • Cognizant Technology Solutions earns more interest than it pays, coverage of interest payments is not a concern.
X
Financial health checks
We assess Cognizant Technology Solutions's financial health by checking for:
  1. Are short term assets greater than short term liabilities? (1 check)
  2. Are short term assets greater than long term liabilities? (1 check)
  3. Has the debt to equity ratio increased in the past 5 years? (1 check)
  4. Is the debt to equity ratio over 40%? (1 check)
  5. Is the debt covered by operating cash flow? (1 check)
  6. Are earnings greater than 5x the interest on debt (if company pays interest at all)? (1 check)
  7. Cognizant Technology Solutions has a total score of 5/6, see the detailed checks below.
For companies that are loss making and have been so on average in the past we replace the last 2 checks with:
  1. Does cash and short term investments cover stable operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)
  2. Does cash and short term investments cover growing operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)


Full details on the Health part of the Simply Wall St company analysis model.

CTSH Dividends

 What is Cognizant Technology Solutions's current dividend yield, its reliability and sustainability?

Dividends are regular cash payments to you from the company, similar to a bank paying you interest on a savings account.
Annual Dividend Income
Dividend payments
0.97%
Current annual income from Cognizant Technology Solutions dividends. Estimated to be 1% next year.
If you bought $2,000 of Cognizant Technology Solutions shares you are expected to receive $19 in your first year as a dividend.
Dividend Amount
Here we look how much dividend is being paid, if any. Is it above what you can get in a savings account? It is up there with the best dividend paying companies?
  • Cognizant Technology Solutions's pays a lower dividend yield than the bottom 25% of dividend payers in United States of America (1.49%).
  • Cognizant Technology Solutions's dividend is below the markets top 25% of dividend payers in United States of America (3.98%).
Annualized Historical and Future Dividends
It is important to see if the dividend for a company is stable, and not wildly increasing/decreasing each year. This graph shows you the historical rate to count toward your assessment of the stock.

We also check to see if the dividend has increased in the past 10 years.
Raw Data
NasdaqGS:CTSH Annualized Past and Future Dividends
Data Point Source Value
Past Annualized Dividend Yield S&P Global Market Data See Below
Past Dividends per Share Company Filings/ Annualized Dividend Payments See Below
Future Dividends per Share Estimates Average of up to 30 Analyst Estimates (S&P Global) See Below
United States of America IT Industry Average Dividend Yield Market Cap Weighted Average of 74 Stocks 1.4%
United States of America Market Average Dividend Yield Market Cap Weighted Average of 5856 Stocks 3%
United States of America Minimum Threshold Dividend Yield 10th Percentile 0.8%
United States of America Bottom 25% Dividend Yield 25th Percentile 1.5%
United States of America Top 25% Dividend Yield 75th Percentile 4%

Industry and Market average data is calculated daily.

Note all dividend per share amounts are annualized and not quarterly or other period.

NasdaqGS:CTSH Future Dividends Estimate Data
Date (Data in $) Dividend per Share (annual) Avg. No. Analysts
2022-12-31 0.90 1.00
2021-12-31 0.87 1.00
2020-12-31 0.90 9.00
2019-12-31 0.84 12.00
2018-12-31 0.76 13.00
NasdaqGS:CTSH Past Annualized Dividends Data
Date (Data in $) Dividend per share (annual) Avg. Yield (%)
2018-05-07 0.800 1.028
2018-02-27 0.800 0.980
2018-02-07 0.800 1.002
2017-11-01 0.600 0.815
2017-08-03 0.600 0.832
2017-05-05 0.600 0.895

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • It is too early to tell whether Cognizant Technology Solutions has stable dividend payments.
  • Cognizant Technology Solutions only just started paying a dividend, it is too early to tell if payments are increasing.
Current Payout to shareholders
What portion of Cognizant Technology Solutions's earnings are paid to the shareholders as a dividend.
  • Dividends paid are well covered by net profit (3.8x coverage).
Future Payout to shareholders
  • Dividends after 3 years are expected to be well covered by net profit (6.3x coverage).
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Income/ dividend checks
We assess Cognizant Technology Solutions's dividend by checking for:
  1. Firstly is the company paying a notable dividend (greater than 0.8%) - if not then the rest of the checks are ignored.
  2. Is current dividend yield above the bottom 25% of dividend payers? (1 check)
  3. Is current dividend yield above the top 25% of dividend payers? (1 check)
  4. Have they paid a dividend for 10 years, and during this period has the dividend been volatile (drop of more than 25%)? (1 check)
  5. If they have paid a dividend for 10 years has it increased in this time? (1 check)
  6. How sustainable is the dividend, can Cognizant Technology Solutions afford to pay it from its earnings today and in 3 years (Payout ratio less than 90%)? (2 checks)
  7. Cognizant Technology Solutions has a total score of 2/6, see the detailed checks below.


Full details on the Dividends part of the Simply Wall St company analysis model.

CTSH Management

 What is the CEO of Cognizant Technology Solutions's salary, the management and board of directors tenure and is there insider trading?

Management is one of the most important areas of a company. We look at unreasonable CEO compensation, how long the team and board of directors have been around for and insider trading.
CEO
Frank D'Souza, image provided by Google.
Frank D'Souza
COMPENSATION $12,478,390
AGE 49
TENURE AS CEO 11.5 years
CEO Bio

Mr. Francisco D'Souza, also known as Frank, has been the Chief Executive Officer of Cognizant Technology Solutions Corporation since January 1, 2007 and its Vice Chair since June 2018. Mr. D'Souza serves as the Chief Executive Officer at MediCall Philippines, Inc. He served as the President of Cognizant Technology Solutions Corporation at Pepperweed Advisors, LLC from January 1, 2007 to February 6, 2012. He served as the Chief Operating Officer at Cognizant Technology Solutions Corporation from December 2003 to December 2006, Senior Vice President for North American Operations & Business Development from November 1999 to December 2003 and as its Vice President for North American Operations & Business Development and as Director of North American Operations & Business Development from June 1997 to March 1998. From January 1996 to June 1997, he served as a Consultant to Cognizant Technology Solutions Corp. From February 1995 to December 1995, he served as a Product Manager of Pilot Software. From 1992 to 1995, Mr. D'Souza held various marketing, business development and technology management positions as a Management Associate at The Dun & Bradstreet Corporation. While working at The Dun & Bradstreet Corporation, he was part of the team that established the software development and maintenance business conducted by Cognizant Technology Solutions Corp. He has been a Director of Cognizant Technology Solutions Corporation since January 1, 2007. He serves as a Director at MediCall Philippines. He has been an Independent Director of General Electric Company since February 15, 2013. He serves as a Member of International Advisory Board at Banco Santander, S.A. He served as a Director of Active Decisions, Inc. Mr. D'Souza holds a Bachelor of Business Administration Degree from the University of Macau and a Master of Science degree in Industrial Administration and a Master's degree of Business Administration from Carnegie Mellon University.

CEO Compensation
  • Frank's compensation has increased by more than 20% in the past year.
  • Frank's compensation appears reasonable for a company of this size and profit level.
Management Team Tenure

Average tenure and age of the Cognizant Technology Solutions management team in years:

3.5
Average Tenure
51
Average Age
  • The tenure for the Cognizant Technology Solutions management team is about average.
Management Team

Frank D'Souza

TITLE
Vice Chair & CEO
COMPENSATION
$12M
AGE
49
TENURE
11.5 yrs

Raj Mehta

TITLE
President
COMPENSATION
$8M
AGE
51
TENURE
1.8 yrs

Karen McLoughlin

TITLE
Chief Financial Officer
COMPENSATION
$4M
AGE
53
TENURE
6.4 yrs

Matt Friedrich

TITLE
Executive VP
COMPENSATION
$7M
AGE
51
TENURE
1.2 yrs

Ramakrishna Chintamaneni

TITLE
Executive VP and President of Global Industries & Consulting
COMPENSATION
$4M
AGE
48
TENURE
4.6 yrs

Srinivasan Veeraraghavachary

TITLE
Executive VP & Chief Operating Officer
AGE
58
TENURE
1.9 yrs

Robert Telesmanic

TITLE
Senior VP
AGE
51
TENURE
1.5 yrs

David Nelson

TITLE
VP of Investor Relations & Treasurer
TENURE
9.8 yrs

Malcolm Frank

TITLE
Executive VP of Strategy & Marketing
COMPENSATION
$4M
AGE
51
TENURE
6.4 yrs

James Lennox

TITLE
Executive VP & Chief People Officer
AGE
53
TENURE
2.5 yrs
Board of Directors Tenure

Average tenure and age of the Cognizant Technology Solutions board of directors in years:

4.3
Average Tenure
61
Average Age
  • The tenure for the Cognizant Technology Solutions board of directors is about average.
Board of Directors

John Klein

TITLE
Chairman of the Board
COMPENSATION
$475K
AGE
76
TENURE
14.6 yrs

Frank D'Souza

TITLE
Vice Chair & CEO
COMPENSATION
$12M
AGE
49
TENURE
0.1 yrs

John Fox

TITLE
Independent Director
COMPENSATION
$328K
AGE
75
TENURE
10.6 yrs

Maureen Breakiron-Evans

TITLE
Independent Director
COMPENSATION
$343K
AGE
63
TENURE
9.2 yrs

Michael Patsalos-Fox

TITLE
Independent Director
COMPENSATION
$333K
AGE
65
TENURE
6 yrs

Leo Mackay

TITLE
Independent Director
COMPENSATION
$310K
AGE
56
TENURE
5.8 yrs

Zein Abdalla

TITLE
Independent Director
COMPENSATION
$318K
AGE
59
TENURE
2.8 yrs

Jonathan Chadwick

TITLE
Independent Director
COMPENSATION
$312K
AGE
52
TENURE
2.3 yrs

Betsy Atkins

TITLE
Independent Director
COMPENSATION
$371K
AGE
65
TENURE
1.3 yrs

John Dineen

TITLE
Independent Director
COMPENSATION
$371K
AGE
55
TENURE
1.3 yrs
Recent Insider Trading
  • Cognizant Technology Solutions insiders have only sold shares in the past 3 months.
Who owns this company?
X
Management checks
We assess Cognizant Technology Solutions's management by checking for:
  1. Is the CEO's compensation unreasonable compared to market cap and profit (greater than 0.5% of the company's profit + 0.03% of market cap)? (1 check)
  2. Has the CEO's compensation increased more than 20% whilst the EPS is down more then 20%? (1 check)
  3. Is the average tenure of the management team less than 2 years? (1 check)
  4. Is the average tenure of the board of directors team less than 3 years? (1 check)
  5. Cognizant Technology Solutions has a total score of 0/6, this is not included on the snowflake, see the detailed checks below.


Note: We use the top 6 management executives and board members in our calculations.

Note 2: Insider trading include any internal stakeholders and these transactions .

Full details on the Management part of the Simply Wall St company analysis model.

CTSH News

External News
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Simply Wall St News

What Do Analysts Think About Cognizant Technology Solutions Corporation's (NASDAQ:CTSH) Future?

Based on Cognizant Technology Solutions Corporation's (NASDAQ:CTSH) earnings update in March 2018, … with earnings expected to grow by a high double-digit of 61.04% in the upcoming year, … 5-year average growth rate of 10.15%.

Simply Wall St -

Are Cognizant Technology Solutions Corporation's (NASDAQ:CTSH) Interest Costs Too High?

The size of Cognizant Technology Solutions Corporation (NASDAQ:CTSH), a US$45.68b large-cap, often attracts investors seeking a reliable investment in the stock market. … This article will examine Cognizant Technology Solutions’s financial liquidity and debt levels to get an idea of whether the company can deal with cyclical downturns and maintain funds to accommodate strategic spending for future growth … Note that this information is centred entirely on financial health and is a high-level overview, so I encourage you to look further

Simply Wall St -

Should You Be Tempted To Sell Cognizant Technology Solutions Corporation (NASDAQ:CTSH) Because Of Its PE Ratio?

and want to better understand how you can grow your money by investing in Cognizant Technology Solutions Corporation (NASDAQ:CTSH). … Cognizant Technology Solutions Corporation (NASDAQ:CTSH) is trading with a trailing P/E of 32.4x, which is higher than the industry average of 25x. … See our latest analysis for Cognizant Technology Solutions

Simply Wall St -

Cognizant Technology Solutions Corporation (NASDAQ:CTSH): Can Growth Justify Its June Share Price?

Growth expectations for Cognizant Technology Solutions Corporation (NASDAQ:CTSH) are high, but many investors are starting to ask whether its last close at $76.72 can still be rationalized by the future potential. … Check out our latest analysis for Cognizant Technology Solutions? … According to the analysts covering the company, the following few years should bring about good growth prospects for Cognizant Technology Solutions

Simply Wall St -

Will Cognizant Technology Solutions Corporation (NASDAQ:CTSH) Continue To Underperform Its Industry?

See our latest analysis for Cognizant Technology Solutions Peeling the layers of ROE – trisecting a company’s profitability Return on Equity (ROE) is a measure of Cognizant Technology Solutions’s profit relative to its shareholders’ equity. … Return on Equity = Net Profit ÷ Shareholders Equity ROE is measured against cost of equity in order to determine the efficiency of Cognizant Technology Solutions’s equity capital deployed. … Its appropriate level of leverage means investors can be more confident in the sustainability of Cognizant Technology Solutions’s return with a possible increase should the company decide to increase its debt levels.

Simply Wall St -

Why Cognizant Technology Solutions Corporation (NASDAQ:CTSH) Could Be A Buy

Cognizant Technology Solutions Corporation (NASDAQ:CTSH) saw significant share price volatility over the past couple of months on the NasdaqGS, rising to the highs of $84.83 and falling to the lows of $75.03. … Let’s take a look at Cognizant Technology Solutions’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. … Since Cognizant Technology Solutions’s share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest.

Simply Wall St -

Is Cognizant Technology Solutions Corporation's (NASDAQ:CTSH) PE Ratio A Signal To Sell For Investors?

Formula Price-Earnings Ratio = Price per share ÷ Earnings per share P/E Calculation for CTSH Price per share = $82.17 Earnings per share = $2.536 ∴ Price-Earnings Ratio = $82.17 ÷ $2.536 = 32.4x The P/E ratio itself doesn’t tell you a lot; however, it becomes very insightful when you compare it with other similar companies. … For example, if you are inadvertently comparing riskier firms with CTSH, then CTSH’s P/E would naturally be higher than its peers since investors would reward its lower risk with a higher price. … If this assumption does not hold true, CTSH’s higher P/E ratio may be because firms in our peer group are being undervalued by the market.

Simply Wall St -

Cognizant Technology Solutions Corporation (NASDAQ:CTSH): What Is Driving Margins?

To help investors get a top level understanding, this article will interpret Cognizant Technology Solutions's margin performance to help recognise the underlying make-up of revenue and expenses that is responsible for driving future earnings expectations and what it means for CTSH's returns relative to its competitors. … Margin Calculation for CTSH Profit Margin = Net Income ÷ Revenue ∴ Profit Margin = 1.50 Billion ÷ 14.81 Billion = 10.16% Cognizant Technology Solutions's margin has contracted in the past five years, with a 14.86% average growth in revenue surpassing average net income growth of 11.33%, indicating that that a smaller percentage of revenue is being converted in to net income despite the top line growth. … Understanding what could be driving Cognizant Technology Solutions's future earnings Based on future expectations, CTSH's profit margin will transition into expansion, with annual revenue growth tipped at 7.74% and annual net income growth forecasted at 10.61%.

Simply Wall St -

Calculating The Intrinsic Value Of Cognizant Technology Solutions Corporation (NASDAQ:CTSH)

Today, I will calculate the stock's intrinsic value by taking the expected future cash flows and discounting them to today's value. … 5-year cash flow estimate 2018 2019 2020 2021 2022 Levered FCF ($, Millions) $2,200.89 $2,436.68 $2,894.21 $3,286.96 $3,733.01 Source Analyst x9 Analyst x8 Analyst x4 Extrapolated @ (13.57%) Extrapolated @ (13.57%) Present Value Discounted @ 9.4% $2,011.82 $2,036.01 $2,210.57 $2,294.88 $2,382.41 Present Value of 5-year Cash Flow (PVCF)= $10,936 After calculating the present value of future cash flows in the intial 5-year period we need to calculate the Terminal Value, which accounts for all the future cash flows beyond the first stage. … Terminal Value (TV) = FCF2022 × (1 + g) ÷ (r – g) = $3,733 × (1 + 2.5%) ÷ (9.4% – 2.5%) = $55,215 Present Value of Terminal Value (PVTV) = TV / (1 + r)5 = $55,215 / ( 1 + 9.4%)5 = $35,239 The total value is the sum of cash flows for the next five years and the discounted terminal value, which results in the Total Equity Value, which in this case is $46,174.

Simply Wall St -

Should Cognizant Technology Solutions Corporation's (NASDAQ:CTSH) Recent Earnings Decline Worry You?

After reading Cognizant Technology Solutions Corporation's (NASDAQ:CTSH) latest earnings update (31 December 2017), I found it beneficial to look back at how the company has performed in the past and compare this against the most recent numbers. … For Cognizant Technology Solutions, its latest earnings (trailing twelve month) is US$1.50B, which, against the previous year's figure, has fallen by -3.16%. … Given that these figures may be fairly myopic, I’ve calculated an annualized five-year value for Cognizant Technology Solutions's net income, which stands at US$1.32B This suggests that though earnings growth was negative against last year, over the long run, Cognizant Technology Solutions's profits have been rising on average.

Simply Wall St -

CTSH Company Info

Map
Description

Cognizant Technology Solutions Corporation, a professional services company, provides consulting and technology, and outsourcing services worldwide. The company operates through four segments: Financial Services; Healthcare; Products and Resources; and Communications, Media and Technology. It offers business, process, operations, and technology consulting services; application design and development, and systems integration services; application testing, consulting, and engineering services; and enterprise information management services. The company also develops, licenses, implements, and supports various software products for the healthcare industry, including solutions for health insurance plans, third party benefit administrators, and healthcare providers. In addition, it provides application maintenance services; information technology infrastructure services, such as data center, infrastructure security, network and convergence, end-user computing, and mobility services; and business process services comprising clinical data management, pharmacovigilance, equity research support, commercial operations, and order management services, as well as consulting and platform-based services. The company markets and sells its services directly through its professional staff, senior management, and direct sales personnel. It serves banking and insurance, healthcare and life sciences, manufacturing and logistics, retail and consumer goods, travel and hospitality, energy and utilities, communications and media, and technology industries. The company was founded in 1994 and is headquartered in Teaneck, New Jersey.

Details
Name: Cognizant Technology Solutions Corporation
CTSH
Exchange: NasdaqGS
Founded: 1994
$48,020,274,089
585,898,903
Website: http://www.cognizant.com
Address: Cognizant Technology Solutions Corporation
Glenpointe Centre West,
500 Frank West Burr Boulevard,
Teaneck,
New Jersey, 07666,
United States
Listings
Exchange Symbol Ticker Symbol Security Exchange Country Currency Listed on
NasdaqGS CTSH Class A Common Stock Nasdaq Global Select US USD 19. Jun 1998
DB COZ Class A Common Stock Deutsche Boerse AG DE EUR 19. Jun 1998
LSE 0QZ5 Class A Common Stock London Stock Exchange GB USD 19. Jun 1998
SWX CTSH Class A Common Stock SIX Swiss Exchange CH CHF 19. Jun 1998
WBAG CTSH Class A Common Stock Wiener Boerse AG AT EUR 19. Jun 1998
BMV CTSH * Class A Common Stock Bolsa Mexicana de Valores MX MXN 19. Jun 1998
BOVESPA CTSH34 BDR EA REP 1 COM CL'A' USD0.01 Bolsa de Valores de Sao Paulo BR BRL 25. Apr 2016
Number of employees
Current staff
Staff numbers
261,400
Cognizant Technology Solutions employees.
Industry
IT Consulting and Other Services
Software
Company Analysis and Financial Data Status
Area Date (UTC time)
Company Analysis updated: 2018/07/17 21:18
End of day share price update: 2018/07/17 00:00
Last estimates confirmation: 2018/07/16
Last earnings update: 2018/03/31
Last annual earnings update: 2017/12/31


All dates and times in UTC. All financial data provided by Standard & Poor’s Capital IQ.

Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.