COGNIZANT TECH SOLUTIONS-A (CTSH) Stock Fundamental Analysis
USA - NASDAQ:CTSH - US1924461023 - Common Stock
74.66 USD
+1.85 (+2.54%)
74.96 USD
+0.3 (+0.4%)
We assign a fundamental rating of 7 out of 10 to CTSH. CTSH was compared to 85 industry peers in the IT Services industry. Both the health and profitability get an excellent rating, making CTSH a very profitable company, without any liquidiy or solvency issues. CTSH has a decent growth rate and is not valued too expensively. These ratings could make CTSH a good candidate for quality investing.
1. Profitability
1.1 Basic Checks
In the past year CTSH was profitable.
CTSH had a positive operating cash flow in the past year.
In the past 5 years CTSH has always been profitable.
In the past 5 years CTSH always reported a positive cash flow from operatings.
1.2 Ratios
CTSH has a better Return On Assets (10.57%) than 89.41% of its industry peers.
Looking at the Return On Equity, with a value of 14.28%, CTSH is in the better half of the industry, outperforming 77.65% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 14.88%, CTSH belongs to the top of the industry, outperforming 87.06% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for CTSH is significantly below the industry average of 27.96%.
The last Return On Invested Capital (14.88%) for CTSH is above the 3 year average (14.72%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.57% | ||
| ROE | 14.28% | ||
| ROIC | 14.88% |
ROA(3y)11.85%
ROA(5y)11.15%
ROE(3y)16.74%
ROE(5y)16.18%
ROIC(3y)14.72%
ROIC(5y)14.56%
1.3 Margins
With a decent Profit Margin value of 10.20%, CTSH is doing good in the industry, outperforming 77.65% of the companies in the same industry.
CTSH's Profit Margin has been stable in the last couple of years.
CTSH's Operating Margin of 15.70% is amongst the best of the industry. CTSH outperforms 83.53% of its industry peers.
In the last couple of years the Operating Margin of CTSH has remained more or less at the same level.
The Gross Margin of CTSH (34.06%) is comparable to the rest of the industry.
In the last couple of years the Gross Margin of CTSH has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 15.7% | ||
| PM (TTM) | 10.2% | ||
| GM | 34.06% |
OM growth 3Y-0.1%
OM growth 5Y-0.74%
PM growth 3Y-0.57%
PM growth 5Y0.67%
GM growth 3Y-2.71%
GM growth 5Y-1.29%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so CTSH is still creating some value.
Compared to 1 year ago, CTSH has less shares outstanding
Compared to 5 years ago, CTSH has less shares outstanding
CTSH has a worse debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 7.07 indicates that CTSH is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 7.07, CTSH belongs to the top of the industry, outperforming 83.53% of the companies in the same industry.
CTSH has a debt to FCF ratio of 0.22. This is a very positive value and a sign of high solvency as it would only need 0.22 years to pay back of all of its debts.
CTSH's Debt to FCF ratio of 0.22 is amongst the best of the industry. CTSH outperforms 89.41% of its industry peers.
CTSH has a Debt/Equity ratio of 0.04. This is a healthy value indicating a solid balance between debt and equity.
Looking at the Debt to Equity ratio, with a value of 0.04, CTSH is in the better half of the industry, outperforming 72.94% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.04 | ||
| Debt/FCF | 0.22 | ||
| Altman-Z | 7.07 |
ROIC/WACC1.69
WACC8.78%
2.3 Liquidity
A Current Ratio of 2.36 indicates that CTSH has no problem at all paying its short term obligations.
CTSH has a Current ratio of 2.36. This is in the better half of the industry: CTSH outperforms 72.94% of its industry peers.
A Quick Ratio of 2.36 indicates that CTSH has no problem at all paying its short term obligations.
With a decent Quick ratio value of 2.36, CTSH is doing good in the industry, outperforming 74.12% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.36 | ||
| Quick Ratio | 2.36 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 8.90% over the past year.
The Earnings Per Share has been growing slightly by 3.50% on average over the past years.
CTSH shows a small growth in Revenue. In the last year, the Revenue has grown by 7.44%.
The Revenue has been growing slightly by 3.29% on average over the past years.
EPS 1Y (TTM)8.9%
EPS 3Y4.86%
EPS 5Y3.5%
EPS Q2Q%11.2%
Revenue 1Y (TTM)7.44%
Revenue growth 3Y2.17%
Revenue growth 5Y3.29%
Sales Q2Q%7.36%
3.2 Future
CTSH is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 9.23% yearly.
CTSH is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.89% yearly.
EPS Next Y12.32%
EPS Next 2Y9.73%
EPS Next 3Y9.5%
EPS Next 5Y9.23%
Revenue Next Year6.81%
Revenue Next 2Y5.76%
Revenue Next 3Y5.74%
Revenue Next 5Y4.89%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 14.53 indicates a correct valuation of CTSH.
Based on the Price/Earnings ratio, CTSH is valued a bit cheaper than the industry average as 76.47% of the companies are valued more expensively.
When comparing the Price/Earnings ratio of CTSH to the average of the S&P500 Index (26.13), we can say CTSH is valued slightly cheaper.
The Price/Forward Earnings ratio is 13.06, which indicates a correct valuation of CTSH.
CTSH's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. CTSH is cheaper than 77.65% of the companies in the same industry.
CTSH's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 22.35.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.53 | ||
| Fwd PE | 13.06 |
4.2 Price Multiples
CTSH's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. CTSH is cheaper than 80.00% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of CTSH indicates a rather cheap valuation: CTSH is cheaper than 83.53% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 13.75 | ||
| EV/EBITDA | 9.06 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
CTSH has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)1.18
PEG (5Y)4.15
EPS Next 2Y9.73%
EPS Next 3Y9.5%
5. Dividend
5.1 Amount
CTSH has a Yearly Dividend Yield of 1.66%. Purely for dividend investing, there may be better candidates out there.
CTSH's Dividend Yield is rather good when compared to the industry average which is at 2.58. CTSH pays more dividend than 85.88% of the companies in the same industry.
Compared to the average S&P500 Dividend Yield of 2.39, CTSH is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.66% |
5.2 History
On average, the dividend of CTSH grows each year by 8.46%, which is quite nice.
CTSH has been paying a dividend for over 5 years, so it has already some track record.
As CTSH did not decrease their dividend in the past 5 years, we can say the dividend looks stable.
Dividend Growth(5Y)8.46%
Div Incr Years5
Div Non Decr Years7
5.3 Sustainability
28.62% of the earnings are spent on dividend by CTSH. This is a low number and sustainable payout ratio.
CTSH's earnings are growing around the same pace than its dividend. As long as the earnings growth is kept the dividend growth is sustainable.
DP28.62%
EPS Next 2Y9.73%
EPS Next 3Y9.5%
74.66
+1.85 (+2.54%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners101.96%
Inst Owner Change0.07%
Ins Owners0.1%
Ins Owner Change1.05%
Market Cap36.46B
Revenue(TTM)20.86B
Net Income(TTM)2.13B
Analysts72.35
Price Target85.97 (15.15%)
Short Float %5.65%
Short Ratio6.98
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.66% |
Yearly Dividend1.21
Dividend Growth(5Y)8.46%
DP28.62%
Div Incr Years5
Div Non Decr Years7
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)3.25%
Min EPS beat(2)1.85%
Max EPS beat(2)4.65%
EPS beat(4)4
Avg EPS beat(4)3.22%
Min EPS beat(4)0.64%
Max EPS beat(4)5.75%
EPS beat(8)7
Avg EPS beat(8)4.16%
EPS beat(12)10
Avg EPS beat(12)4%
EPS beat(16)13
Avg EPS beat(16)3.49%
Revenue beat(2)0
Avg Revenue beat(2)-0.51%
Min Revenue beat(2)-0.87%
Max Revenue beat(2)-0.15%
Revenue beat(4)0
Avg Revenue beat(4)-1.15%
Min Revenue beat(4)-1.82%
Max Revenue beat(4)-0.15%
Revenue beat(8)0
Avg Revenue beat(8)-1.21%
Revenue beat(12)0
Avg Revenue beat(12)-1.16%
Revenue beat(16)0
Avg Revenue beat(16)-1.55%
PT rev (1m)-2.91%
PT rev (3m)-3.76%
EPS NQ rev (1m)0.21%
EPS NQ rev (3m)1.4%
EPS NY rev (1m)0.8%
EPS NY rev (3m)1.58%
Revenue NQ rev (1m)0.13%
Revenue NQ rev (3m)0.99%
Revenue NY rev (1m)-0.02%
Revenue NY rev (3m)0.66%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.53 | ||
| Fwd PE | 13.06 | ||
| P/S | 1.75 | ||
| P/FCF | 13.75 | ||
| P/OCF | 12.38 | ||
| P/B | 2.45 | ||
| P/tB | 5.77 | ||
| EV/EBITDA | 9.06 |
EPS(TTM)5.14
EY6.88%
EPS(NY)5.72
Fwd EY7.66%
FCF(TTM)5.43
FCFY7.27%
OCF(TTM)6.03
OCFY8.08%
SpS42.7
BVpS30.5
TBVpS12.95
PEG (NY)1.18
PEG (5Y)4.15
Graham Number59.39
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.57% | ||
| ROE | 14.28% | ||
| ROCE | 19.6% | ||
| ROIC | 14.88% | ||
| ROICexc | 17.32% | ||
| ROICexgc | 43.02% | ||
| OM | 15.7% | ||
| PM (TTM) | 10.2% | ||
| GM | 34.06% | ||
| FCFM | 12.71% |
ROA(3y)11.85%
ROA(5y)11.15%
ROE(3y)16.74%
ROE(5y)16.18%
ROIC(3y)14.72%
ROIC(5y)14.56%
ROICexc(3y)17.57%
ROICexc(5y)17.67%
ROICexgc(3y)42.32%
ROICexgc(5y)42.39%
ROCE(3y)19.4%
ROCE(5y)19.19%
ROICexgc growth 3Y-3.2%
ROICexgc growth 5Y-0.62%
ROICexc growth 3Y-4.44%
ROICexc growth 5Y-4.72%
OM growth 3Y-0.1%
OM growth 5Y-0.74%
PM growth 3Y-0.57%
PM growth 5Y0.67%
GM growth 3Y-2.71%
GM growth 5Y-1.29%
F-Score7
Asset Turnover1.04
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.04 | ||
| Debt/FCF | 0.22 | ||
| Debt/EBITDA | 0.14 | ||
| Cap/Depr | 53.16% | ||
| Cap/Sales | 1.41% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 76.95% | ||
| Profit Quality | 124.58% | ||
| Current Ratio | 2.36 | ||
| Quick Ratio | 2.36 | ||
| Altman-Z | 7.07 |
F-Score7
WACC8.78%
ROIC/WACC1.69
Cap/Depr(3y)56.75%
Cap/Depr(5y)58.01%
Cap/Sales(3y)1.62%
Cap/Sales(5y)1.75%
Profit Quality(3y)91.3%
Profit Quality(5y)117.2%
High Growth Momentum
Growth
EPS 1Y (TTM)8.9%
EPS 3Y4.86%
EPS 5Y3.5%
EPS Q2Q%11.2%
EPS Next Y12.32%
EPS Next 2Y9.73%
EPS Next 3Y9.5%
EPS Next 5Y9.23%
Revenue 1Y (TTM)7.44%
Revenue growth 3Y2.17%
Revenue growth 5Y3.29%
Sales Q2Q%7.36%
Revenue Next Year6.81%
Revenue Next 2Y5.76%
Revenue Next 3Y5.74%
Revenue Next 5Y4.89%
EBIT growth 1Y9.5%
EBIT growth 3Y2.07%
EBIT growth 5Y2.53%
EBIT Next Year28.81%
EBIT Next 3Y13.14%
EBIT Next 5Y10.18%
FCF growth 1Y34.84%
FCF growth 3Y-6.23%
FCF growth 5Y-2.81%
OCF growth 1Y28.32%
OCF growth 3Y-5.22%
OCF growth 5Y-3.2%
COGNIZANT TECH SOLUTIONS-A / CTSH FAQ
Can you provide the ChartMill fundamental rating for COGNIZANT TECH SOLUTIONS-A?
ChartMill assigns a fundamental rating of 7 / 10 to CTSH.
What is the valuation status for CTSH stock?
ChartMill assigns a valuation rating of 6 / 10 to COGNIZANT TECH SOLUTIONS-A (CTSH). This can be considered as Fairly Valued.
What is the profitability of CTSH stock?
COGNIZANT TECH SOLUTIONS-A (CTSH) has a profitability rating of 7 / 10.
What is the valuation of COGNIZANT TECH SOLUTIONS-A based on its PE and PB ratios?
The Price/Earnings (PE) ratio for COGNIZANT TECH SOLUTIONS-A (CTSH) is 14.53 and the Price/Book (PB) ratio is 2.45.
Can you provide the dividend sustainability for CTSH stock?
The dividend rating of COGNIZANT TECH SOLUTIONS-A (CTSH) is 6 / 10 and the dividend payout ratio is 28.62%.