NasdaqGS:CTSH

Stock Analysis Report

Cognizant Technology Solutions

Executive Summary

Cognizant Technology Solutions Corporation, a professional services company, provides consulting and technology, and outsourcing services worldwide.

Snowflake

Fundamentals

Solid track record with excellent balance sheet.


Similar Companies

Share Price & News

How has Cognizant Technology Solutions's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

0.5%

CTSH

1.0%

US IT

1.0%

US Market


1 Year Return

-15.8%

CTSH

24.7%

US IT

6.7%

US Market

Return vs Industry: CTSH underperformed the US IT industry which returned 24.7% over the past year.

Return vs Market: CTSH underperformed the US Market which returned 6.7% over the past year.


Share holder returns

CTSHIndustryMarket
7 Day0.5%1.0%1.0%
30 Day-5.8%-0.3%-1.8%
90 Day-8.1%-2.3%-1.8%
1 Year-14.8%-15.8%26.0%24.7%9.1%6.7%
3 Year24.2%21.0%97.6%89.3%46.1%36.6%
5 Year42.8%39.1%156.0%132.3%66.9%48.6%

Price Volatility Vs. Market

How volatile is Cognizant Technology Solutions's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

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

24%

Discount to future cash flow value


Intrinsic Value Based on Future Cash Flows

Undervalued: CTSH ($60.61) is trading below our estimate of fair value ($79.37)

Significantly Undervalued: CTSH is trading below fair value, but not by a significant amount.


Price Based on Earnings

PE vs Industry: CTSH is good value based on its PE Ratio (16.8x) compared to the IT industry average (36x).

PE vs Market: CTSH is good value based on its PE Ratio (16.8x) compared to the US market (17.5x).


Price Based on Expected Growth

Low PEG Ratio: CTSH is poor value based on its PEG Ratio (1.7x)


Price Based on Value of Assets

PB vs Industry: CTSH is good value based on its PB Ratio (3.2x) compared to the US IT industry average (4.3x).


Next Steps

Future Growth

How is Cognizant Technology Solutions expected to perform in the next 1 to 3 years based on estimates from 29 analysts?

9.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Estimates


Future Annual Growth Analysis

Earnings vs Savings Rate: CTSH's forecast earnings growth (9.6% per year) is above the savings rate (2.7%).

Earnings vs Market: CTSH's earnings (9.6% per year) are forecast to grow slower than the US market (14.5% per year).

High Growth Earnings: CTSH's earnings are forecast to grow, but not significantly.

Revenue vs Market: CTSH's revenue (6.2% per year) is forecast to grow slower than the US market (7.3% per year).

High Growth Revenue: CTSH's revenue (6.2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Estimates


Future Return on Equity

High Future ROE: CTSH's Return on Equity is forecast to be high in 3 years time (21.1%)


Next Steps

Past Performance

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

5.7%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: CTSH's earnings have grown by 5.7% per year over the past 5 years.

Accelerating Growth: CTSH's earnings growth over the past year (42.8%) exceeds its 5-year average (5.7% per year).

Earnings vs Industry: CTSH earnings growth over the past year (42.8%) exceeded the IT industry 8.4%.


Return on Equity

High ROE: CTSH's Return on Equity (19.7%) is considered low.


Return on Assets

ROA vs Industry: CTSH has a higher Return on Assets than the IT industry average last year.


Return on Capital Employed

ROCE Improving: CTSH has improved its Return on Capital Employed over the past 3 years.


Next Steps

Financial Health

How is Cognizant Technology Solutions's financial position?


Financial Position Analysis

Short Term Liabilities: CTSH's short term assets ($7.2B) exceeds its short term liabilities ($2.8B)

Long Term Liabilities: CTSH's short term assets (7.2B) exceeds its long term liabilities (2.1B)


Debt to Equity History and Analysis

Debt Level: CTSH's debt to equity ratio (7.1%) is considered satisfactory

Reducing Debt: Insufficient data to determine if CTSH's debt to equity ratio has reduced over the past 5 years.

Debt Coverage: CTSH's debt is well covered by operating cash flow (322.8%).

Interest Coverage: CTSH earns more interest than it pays, so coverage of interest payments is not a concern.


Balance Sheet

Inventory Level: CTSH has a low level of unsold assets or inventory.

Debt Coverage by Assets: CTSH's debt is covered by short term assets (assets are 9.659510x debt).


Next Steps

Dividend

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

1.58%

Expected Dividend Yield


Dividend Yield vs Market

company1.3%marketbottom25%1.5%markettop25%3.8%industryaverage1.5%forecastin3Years1.6%

Current dividend yield vs market & industry


Dividend Yield and Payments Analysis

Notable Dividend: CTSH's dividend (1.32%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.46%).

High Dividend: CTSH's dividend (1.32%) is low compared to the top 25% of dividend payers in the US market (3.77%).

Stable Dividend: Whilst dividend payments have been stable, CTSH has been paying a dividend for less than 10 years.

Growing Dividend: CTSH's dividend payments have increased, but the company has only paid a dividend for 2 years.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (22.1%), CTSH's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: CTSH's dividends in 3 years are forecast to be well covered by earnings (28.2% payout ratio).


Next Steps

Management

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

3.2yrs

Average management tenure


CEO

Brian Humphries (45yo)

0.5yrs

Tenure

0

Mr. Brian Humphries has been Chief Executive Officer and Director of Cognizant Technology Solutions Corporation since April 1, 2019. Mr. Humphries served as the Chief Executive Officer of Vodafone Business ...


Management Age and Tenure

3.2yrs

Average Tenure

53yo

Average Age

Experienced Management: CTSH's management team is considered experienced (3.2 years average tenure).


Board Age and Tenure

3.8yrs

Average Tenure

58.5yo

Average Age

Experienced Board: CTSH's board of directors are considered experienced (3.8 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

SellUS$7,25814 Jun 19
Malcolm Frank
EntityIndividual
Role
Senior Key Executive
President of Cognizant Digital Business
Shares100
Max PriceUS$72.58
BuyUS$1,160,74224 May 19
Brian Humphries
EntityIndividual
Role
Chief Executive Officer
CEO & Director
Shares19,000
Max PriceUS$61.09
SellUS$1,408,39319 Mar 19
Rajeev Mehta
EntityIndividual
Shares19,664
Max PriceUS$71.62
SellUS$216,25519 Mar 19
Venkat Krishnaswamy
EntityIndividual
Shares3,014
Max PriceUS$71.75
SellUS$1,430,00015 Mar 19
Rajeev Mehta
EntityIndividual
Shares20,000
Max PriceUS$72.00
SellUS$725,00011 Mar 19
Rajeev Mehta
EntityIndividual
Shares10,000
Max PriceUS$72.50
SellUS$114,12617 Dec 18
Gajakarnan Kandiah
EntityIndividual
Shares1,654
Max PriceUS$69.00

Ownership Breakdown


Management Team

  • Larry Bridge

    Senior VP of Healthcare Strategy & Corporate Development

    • Tenure: 0yrs
  • Brian Humphries (45yo)

    CEO & Director

    • Tenure: 0.5yrs
  • Malcolm Frank (52yo)

    President of Cognizant Digital Business

    • Tenure: 0.8yrs
    • Compensation: US$4.68m
  • Matt Friedrich (52yo)

    Executive VP

    • Tenure: 2.4yrs
    • Compensation: US$6.98m
  • Karen McLoughlin (54yo)

    Chief Financial Officer

    • Tenure: 7.7yrs
    • Compensation: US$5.52m
  • Katie Royce

    Global Head of Investor Relations

    • Tenure: 0yrs
  • Dharmendra Sinha (56yo)

    Executive VP & President of Global Client Services

    • Tenure: 5.8yrs
    • Compensation: US$3.16m
  • Srinivasan Veeraraghavachary (59yo)

    Executive VP & Chief Operating Officer

    • Tenure: 3.2yrs
  • Santosh Thomas (50yo)

    Executive VP & President of Global Growth Markets

    • Tenure: 3.2yrs
  • James Lennox (54yo)

    Executive VP & Chief People Officer

    • Tenure: 3.8yrs

Board Members

  • Frank D'Souza (50yo)

    Executive Vice Chairman

    • Tenure: 1.3yrs
    • Compensation: US$14.09m
  • John Klein (77yo)

    Independent Director

    • Tenure: 21.6yrs
    • Compensation: US$478.48k
  • John Fox (76yo)

    Independent Director

    • Tenure: 11.8yrs
    • Compensation: US$331.48k
  • Michael Patsalos-Fox (66yo)

    Independent Chairman

    • Tenure: 1.1yrs
    • Compensation: US$443.10k
  • Leo Mackay (57yo)

    Independent Director

    • Tenure: 7.1yrs
    • Compensation: US$311.98k
  • Maureen Breakiron-Evans (64yo)

    Independent Director

    • Tenure: 10.4yrs
    • Compensation: US$344.48k
  • Brian Humphries (45yo)

    CEO & Director

    • Tenure: 0.5yrs
  • John Dineen (56yo)

    Independent Director

    • Tenure: 2.5yrs
    • Compensation: US$324.42k
  • Jonathan Chadwick (53yo)

    Independent Director

    • Tenure: 3.5yrs
    • Compensation: US$313.48k
  • Zein Abdalla (60yo)

    Independent Director

    • Tenure: 4.1yrs
    • Compensation: US$326.96k

Company Information

Cognizant Technology Solutions Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Cognizant Technology Solutions Corporation
  • Ticker: CTSH
  • Exchange: NasdaqGS
  • Founded: 1994
  • Industry: IT Consulting and Other Services
  • Sector: Software
  • Market Cap: US$33.474b
  • Shares outstanding: 552.29m
  • Website: https://www.cognizant.com

Number of Employees


Location

  • Cognizant Technology Solutions Corporation
  • Glenpointe Centre West
  • 500 Frank West Burr Boulevard
  • Teaneck
  • New Jersey
  • 7666
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
CTSHNasdaqGS (Nasdaq Global Select)YesClass A Common StockUSUSDJun 1998
COZDB (Deutsche Boerse AG)YesClass A Common StockDEEURJun 1998
CTSHSWX (SIX Swiss Exchange)YesClass A Common StockCHCHFJun 1998
0QZ5LSE (London Stock Exchange)YesClass A Common StockGBUSDJun 1998
CTSH *BMV (Bolsa Mexicana de Valores)YesClass A Common StockMXMXNJun 1998
CTSHWBAG (Wiener Boerse AG)YesClass A Common StockATEURJun 1998
CTSH34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EA REP 1 COM CL'A' USD0.01BRBRLApr 2016

Biography

Cognizant Technology Solutions Corporation, a professional services company, provides consulting and technology, and outsourcing services worldwide. The company operates through four segments: Financial Se ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/14 01:04
End of Day Share Price2019/10/11 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


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.

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