COGNIZANT TECH SOLUTIONS-A (CTSH) Fundamental Analysis & Valuation

NASDAQ:CTSH • US1924461023

Current stock price

61.83 USD
-0.71 (-1.14%)
Last:

This CTSH fundamental analysis includes valuation metrics, fair value assessment, financial health analysis, profitability trends, growth metrics and dividend sustainability analysis.

8

1. CTSH Profitability Analysis

1.1 Basic Checks

  • In the past year CTSH was profitable.
  • CTSH had a positive operating cash flow in the past year.
  • CTSH had positive earnings in each of the past 5 years.
  • In the past 5 years CTSH always reported a positive cash flow from operatings.
CTSH Yearly Net Income VS EBIT VS OCF VS FCFCTSH Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 1B 2B 3B

1.2 Ratios

  • CTSH has a better Return On Assets (10.78%) than 87.50% of its industry peers.
  • Looking at the Return On Equity, with a value of 14.85%, CTSH is in the better half of the industry, outperforming 75.00% of the companies in the same industry.
  • CTSH has a Return On Invested Capital of 14.73%. This is amongst the best in the industry. CTSH outperforms 90.91% of its industry peers.
  • The Average Return On Invested Capital over the past 3 years for CTSH is above the industry average of 11.10%.
  • The last Return On Invested Capital (14.73%) for CTSH is above the 3 year average (14.39%), which is a sign of increasing profitability.
Industry RankSector Rank
ROA 10.78%
ROE 14.85%
ROIC 14.73%
ROA(3y)11.17%
ROA(5y)11.66%
ROE(3y)15.49%
ROE(5y)16.58%
ROIC(3y)14.39%
ROIC(5y)14.72%
CTSH Yearly ROA, ROE, ROICCTSH Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 5 10 15

1.3 Margins

  • The Profit Margin of CTSH (10.56%) is better than 78.41% of its industry peers.
  • CTSH's Profit Margin has improved in the last couple of years.
  • CTSH has a better Operating Margin (15.76%) than 84.09% of its industry peers.
  • CTSH's Operating Margin has improved in the last couple of years.
  • With a Gross Margin value of 33.72%, CTSH perfoms like the industry average, outperforming 48.86% of the companies in the same industry.
  • In the last couple of years the Gross Margin of CTSH has remained more or less at the same level.
Industry RankSector Rank
OM 15.76%
PM (TTM) 10.56%
GM 33.72%
OM growth 3Y1.05%
OM growth 5Y1.86%
PM growth 3Y-3.58%
PM growth 5Y4.79%
GM growth 3Y-2.09%
GM growth 5Y-1.47%
CTSH Yearly Profit, Operating, Gross MarginsCTSH Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 10 20 30 40

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9

2. CTSH Health Analysis

2.1 Basic Checks

  • CTSH has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
  • Compared to 1 year ago, CTSH has less shares outstanding
  • The number of shares outstanding for CTSH has been reduced compared to 5 years ago.
  • Compared to 1 year ago, CTSH has an improved debt to assets ratio.
CTSH Yearly Shares OutstandingCTSH Yearly Shares OutstandingYearly Shares Outstanding 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 200M 400M 600M
CTSH Yearly Total Debt VS Total AssetsCTSH Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 5B 10B 15B 20B

2.2 Solvency

  • CTSH has an Altman-Z score of 5.98. This indicates that CTSH is financially healthy and has little risk of bankruptcy at the moment.
  • With an excellent Altman-Z score value of 5.98, CTSH belongs to the best of the industry, outperforming 86.36% of the companies in the same industry.
  • The Debt to FCF ratio of CTSH is 0.23, which is an excellent value as it means it would take CTSH, only 0.23 years of fcf income to pay off all of its debts.
  • CTSH has a Debt to FCF ratio of 0.23. This is amongst the best in the industry. CTSH outperforms 88.64% of its industry peers.
  • A Debt/Equity ratio of 0.04 indicates that CTSH is not too dependend on debt financing.
  • Looking at the Debt to Equity ratio, with a value of 0.04, CTSH is in the better half of the industry, outperforming 73.86% of the companies in the same industry.
Industry RankSector Rank
Debt/Equity 0.04
Debt/FCF 0.23
Altman-Z 5.98
ROIC/WACC1.58
WACC9.32%
CTSH Yearly LT Debt VS Equity VS FCFCTSH Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 5B 10B 15B

2.3 Liquidity

  • A Current Ratio of 2.14 indicates that CTSH has no problem at all paying its short term obligations.
  • With a decent Current ratio value of 2.14, CTSH is doing good in the industry, outperforming 61.36% of the companies in the same industry.
  • A Quick Ratio of 2.14 indicates that CTSH has no problem at all paying its short term obligations.
  • CTSH has a better Quick ratio (2.14) than 61.36% of its industry peers.
Industry RankSector Rank
Current Ratio 2.14
Quick Ratio 2.14
CTSH Yearly Current Assets VS Current LiabilitesCTSH Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2B 4B 6B 8B

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4

3. CTSH Growth Analysis

3.1 Past

  • The Earnings Per Share has grown by an nice 11.16% over the past year.
  • The Earnings Per Share has been growing by 9.07% on average over the past years. This is quite good.
  • The Revenue has been growing slightly by 6.95% in the past year.
  • The Revenue has been growing slightly by 4.86% on average over the past years.
EPS 1Y (TTM)11.16%
EPS 3Y6.27%
EPS 5Y9.07%
EPS Q2Q%11.57%
Revenue 1Y (TTM)6.95%
Revenue growth 3Y2.8%
Revenue growth 5Y4.86%
Sales Q2Q%4.94%

3.2 Future

  • The Earnings Per Share is expected to grow by 7.90% on average over the next years.
  • CTSH is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.48% yearly.
EPS Next Y9.34%
EPS Next 2Y8.81%
EPS Next 3Y8.87%
EPS Next 5Y7.9%
Revenue Next Year6.19%
Revenue Next 2Y5.61%
Revenue Next 3Y5.64%
Revenue Next 5Y4.48%

3.3 Evolution

  • When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
  • When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
CTSH Yearly Revenue VS EstimatesCTSH Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 5B 10B 15B 20B 25B
CTSH Yearly EPS VS EstimatesCTSH Yearly EPS VS EstimatesYearly EPS VS Estimates 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2 4 6

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7

4. CTSH Valuation Analysis

4.1 Price/Earnings Ratio

  • CTSH is valuated reasonably with a Price/Earnings ratio of 11.71.
  • Based on the Price/Earnings ratio, CTSH is valued a bit cheaper than the industry average as 78.41% of the companies are valued more expensively.
  • The average S&P500 Price/Earnings ratio is at 26.17. CTSH is valued rather cheaply when compared to this.
  • With a Price/Forward Earnings ratio of 10.71, the valuation of CTSH can be described as very reasonable.
  • Based on the Price/Forward Earnings ratio, CTSH is valued a bit cheaper than 77.27% of the companies in the same industry.
  • CTSH is valuated cheaply when we compare the Price/Forward Earnings ratio to 23.05, which is the current average of the S&P500 Index.
Industry RankSector Rank
PE 11.71
Fwd PE 10.71
CTSH Price Earnings VS Forward Price EarningsCTSH Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 10 20 30

4.2 Price Multiples

  • 81.82% of the companies in the same industry are more expensive than CTSH, based on the Enterprise Value to EBITDA ratio.
  • Based on the Price/Free Cash Flow ratio, CTSH is valued a bit cheaper than the industry average as 75.00% of the companies are valued more expensively.
Industry RankSector Rank
P/FCF 11.4
EV/EBITDA 7.37
CTSH Per share dataCTSH EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 10 20 30 40

4.3 Compensation for Growth

  • CTSH's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
  • The excellent profitability rating of CTSH may justify a higher PE ratio.
PEG (NY)1.25
PEG (5Y)1.29
EPS Next 2Y8.81%
EPS Next 3Y8.87%

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Price/EarningsPrice/FCFFCF per shareEV/EBITDAPEG RATIOShow best valued peers

7

5. CTSH Dividend Analysis

5.1 Amount

  • CTSH has a Yearly Dividend Yield of 2.21%. Purely for dividend investing, there may be better candidates out there.
  • In the last 3 months the price of CTSH has falen by -23.06%. A price decline artificially increases the dividend yield. It may be a sign investors do not expect the dividend to last.
  • Compared to an average industry Dividend Yield of 1.18, CTSH pays a better dividend. On top of this CTSH pays more dividend than 87.50% of the companies listed in the same industry.
  • Compared to an average S&P500 Dividend Yield of 1.89, CTSH has a dividend comparable with the average S&P500 company.
Industry RankSector Rank
Dividend Yield 2.21%

5.2 History

  • The dividend of CTSH is nicely growing with an annual growth rate of 7.06%!
  • CTSH has been paying a dividend for at least 10 years, so it has a reliable track record.
  • CTSH has not decreased its dividend in the past 5 years, so it has a somewhat stable track record.
Dividend Growth(5Y)7.06%
Div Incr Years6
Div Non Decr Years8
CTSH Yearly Dividends per shareCTSH Yearly Dividends per shareYearly Dividends per share 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 0.2 0.4 0.6 0.8 1

5.3 Sustainability

  • CTSH pays out 27.35% of its income as dividend. This is a sustainable payout ratio.
  • The dividend of CTSH is growing around the same rate as the earnings are growing. If this keeps up the dividend growth is sustainable.
DP27.35%
EPS Next 2Y8.81%
EPS Next 3Y8.87%
CTSH Yearly Income VS Free CF VS DividendCTSH Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 500M 1B 1.5B 2B 2.5B
CTSH Dividend Payout.CTSH Dividend Payout, showing the Payout Ratio.CTSH Dividend Payout.PayoutRetained Earnings

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CTSH Fundamentals: All Metrics, Ratios and Statistics

COGNIZANT TECH SOLUTIONS-A

NASDAQ:CTSH (4/6/2026, 9:45:00 AM)

61.83

-0.71 (-1.14%)

Chartmill FA Rating
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)02-04
Earnings (Next)04-28
Inst Owners104.67%
Inst Owner Change0%
Ins Owners0.1%
Ins Owner Change1.37%
Market Cap29.57B
Revenue(TTM)21.11B
Net Income(TTM)2.23B
Analysts73.33
Price Target89.8 (45.24%)
Short Float %6.52%
Short Ratio4.31
Dividend
Industry RankSector Rank
Dividend Yield 2.21%
Yearly Dividend1.25
Dividend Growth(5Y)7.06%
DP27.35%
Div Incr Years6
Div Non Decr Years8
Ex-Date02-18
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)2.43%
Min EPS beat(2)0.21%
Max EPS beat(2)4.65%
EPS beat(4)4
Avg EPS beat(4)1.84%
Min EPS beat(4)0.21%
Max EPS beat(4)4.65%
EPS beat(8)7
Avg EPS beat(8)2.73%
EPS beat(12)11
Avg EPS beat(12)4.28%
EPS beat(16)13
Avg EPS beat(16)3.28%
Revenue beat(2)0
Avg Revenue beat(2)-0.84%
Min Revenue beat(2)-1.53%
Max Revenue beat(2)-0.15%
Revenue beat(4)0
Avg Revenue beat(4)-1.09%
Min Revenue beat(4)-1.82%
Max Revenue beat(4)-0.15%
Revenue beat(8)0
Avg Revenue beat(8)-1.15%
Revenue beat(12)0
Avg Revenue beat(12)-1.23%
Revenue beat(16)0
Avg Revenue beat(16)-1.52%
PT rev (1m)-2.58%
PT rev (3m)2.05%
EPS NQ rev (1m)-0.13%
EPS NQ rev (3m)-0.45%
EPS NY rev (1m)0%
EPS NY rev (3m)0.81%
Revenue NQ rev (1m)-0.02%
Revenue NQ rev (3m)1.36%
Revenue NY rev (1m)-0.01%
Revenue NY rev (3m)1.37%
Valuation
Industry RankSector Rank
PE 11.71
Fwd PE 10.71
P/S 1.4
P/FCF 11.4
P/OCF 10.26
P/B 1.97
P/tB 4.55
EV/EBITDA 7.37
EPS(TTM)5.28
EY8.54%
EPS(NY)5.77
Fwd EY9.34%
FCF(TTM)5.43
FCFY8.78%
OCF(TTM)6.03
OCFY9.75%
SpS44.14
BVpS31.4
TBVpS13.57
PEG (NY)1.25
PEG (5Y)1.29
Graham Number61.07
Profitability
Industry RankSector Rank
ROA 10.78%
ROE 14.85%
ROCE 19.53%
ROIC 14.73%
ROICexc 16.59%
ROICexgc 38.03%
OM 15.76%
PM (TTM) 10.56%
GM 33.72%
FCFM 12.29%
ROA(3y)11.17%
ROA(5y)11.66%
ROE(3y)15.49%
ROE(5y)16.58%
ROIC(3y)14.39%
ROIC(5y)14.72%
ROICexc(3y)16.77%
ROICexc(5y)17.49%
ROICexgc(3y)40.17%
ROICexgc(5y)41.84%
ROCE(3y)19.09%
ROCE(5y)19.52%
ROICexgc growth 3Y-4.49%
ROICexgc growth 5Y-0.7%
ROICexc growth 3Y-3.81%
ROICexc growth 5Y-0.41%
OM growth 3Y1.05%
OM growth 5Y1.86%
PM growth 3Y-3.58%
PM growth 5Y4.79%
GM growth 3Y-2.09%
GM growth 5Y-1.47%
F-Score7
Asset Turnover1.02
Health
Industry RankSector Rank
Debt/Equity 0.04
Debt/FCF 0.23
Debt/EBITDA 0.14
Cap/Depr 52.36%
Cap/Sales 1.36%
Interest Coverage 92.42
Cash Conversion 74.36%
Profit Quality 116.37%
Current Ratio 2.14
Quick Ratio 2.14
Altman-Z 5.98
F-Score7
WACC9.32%
ROIC/WACC1.58
Cap/Depr(3y)54.76%
Cap/Depr(5y)54.25%
Cap/Sales(3y)1.5%
Cap/Sales(5y)1.54%
Profit Quality(3y)97.54%
Profit Quality(5y)98.79%
High Growth Momentum
Growth
EPS 1Y (TTM)11.16%
EPS 3Y6.27%
EPS 5Y9.07%
EPS Q2Q%11.57%
EPS Next Y9.34%
EPS Next 2Y8.81%
EPS Next 3Y8.87%
EPS Next 5Y7.9%
Revenue 1Y (TTM)6.95%
Revenue growth 3Y2.8%
Revenue growth 5Y4.86%
Sales Q2Q%4.94%
Revenue Next Year6.19%
Revenue Next 2Y5.61%
Revenue Next 3Y5.64%
Revenue Next 5Y4.48%
EBIT growth 1Y9.95%
EBIT growth 3Y3.88%
EBIT growth 5Y6.8%
EBIT Next Year24.55%
EBIT Next 3Y12.38%
EBIT Next 5Y8.56%
FCF growth 1Y42.04%
FCF growth 3Y5.09%
FCF growth 5Y-2.2%
OCF growth 1Y35.73%
OCF growth 3Y3.93%
OCF growth 5Y-2.66%

COGNIZANT TECH SOLUTIONS-A / CTSH Fundamental Analysis FAQ

What is the ChartMill fundamental rating of COGNIZANT TECH SOLUTIONS-A (CTSH) stock?

ChartMill assigns a fundamental rating of 7 / 10 to CTSH.


What is the valuation status of COGNIZANT TECH SOLUTIONS-A (CTSH) stock?

ChartMill assigns a valuation rating of 7 / 10 to COGNIZANT TECH SOLUTIONS-A (CTSH). This can be considered as Undervalued.


What is the profitability of CTSH stock?

COGNIZANT TECH SOLUTIONS-A (CTSH) has a profitability rating of 8 / 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 11.71 and the Price/Book (PB) ratio is 1.97.


What is the financial health of COGNIZANT TECH SOLUTIONS-A (CTSH) stock?

The financial health rating of COGNIZANT TECH SOLUTIONS-A (CTSH) is 9 / 10.