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

NASDAQ:CTSH • US1924461023

Current stock price

59.73 USD
-1.03 (-1.7%)
At close:
59.71 USD
-0.02 (-0.03%)
After Hours:

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.
  • In the past year CTSH had a positive cash flow from operations.
  • CTSH had positive earnings in each of the past 5 years.
  • Each year in the past 5 years CTSH had a positive operating cash flow.
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 Return On Assets of 10.78%. This is amongst the best in the industry. CTSH outperforms 87.50% of its industry peers.
  • CTSH has a better Return On Equity (14.85%) than 76.14% of its industry peers.
  • 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 11.08%.
  • The 3 year average ROIC (14.39%) for CTSH is below the current ROIC(14.73%), indicating increased profibility in the last year.
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

  • CTSH has a Profit Margin of 10.56%. This is in the better half of the industry: CTSH outperforms 78.41% of its industry peers.
  • In the last couple of years the Profit Margin of CTSH has grown nicely.
  • Looking at the Operating Margin, with a value of 15.76%, CTSH belongs to the top of the industry, outperforming 84.09% of the companies in the same industry.
  • CTSH's Operating Margin has improved in the last couple of years.
  • Looking at the Gross Margin, with a value of 33.72%, CTSH is in line with its industry, 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

  • With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), CTSH is creating some value.
  • The number of shares outstanding for CTSH has been reduced compared to 1 year ago.
  • The number of shares outstanding for CTSH has been reduced compared to 5 years ago.
  • CTSH has a better debt/assets ratio than last year.
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

  • An Altman-Z score of 5.89 indicates that CTSH is not in any danger for bankruptcy at the moment.
  • Looking at the Altman-Z score, with a value of 5.89, CTSH belongs to the top 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 better Debt to FCF ratio (0.23) than 88.64% 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.
  • CTSH has a Debt to Equity ratio of 0.04. This is in the better half of the industry: CTSH outperforms 75.00% of its industry peers.
Industry RankSector Rank
Debt/Equity 0.04
Debt/FCF 0.23
Altman-Z 5.89
ROIC/WACC1.55
WACC9.5%
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.
  • CTSH has a Quick Ratio of 2.14. This indicates that CTSH is financially healthy and has no problem in meeting its short term obligations.
  • The Quick ratio of CTSH (2.14) is better 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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WACCDebt/EquityHow to determine the health of a companyAltman-Z scoreShow peers with great health

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.
  • Looking at the last year, CTSH shows a small growth in Revenue. The Revenue has grown by 6.95% in the last 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

  • CTSH is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 7.90% yearly.
  • 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 Year6.2%
Revenue Next 2Y5.65%
Revenue Next 3Y5.71%
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.
  • The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
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

  • The Price/Earnings ratio is 11.31, which indicates a very decent valuation of CTSH.
  • 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 24.88. CTSH is valued rather cheaply when compared to this.
  • A Price/Forward Earnings ratio of 10.35 indicates a reasonable valuation of CTSH.
  • CTSH's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. CTSH is cheaper than 77.27% of the companies in the same industry.
  • CTSH is valuated cheaply when we compare the Price/Forward Earnings ratio to 22.19, which is the current average of the S&P500 Index.
Industry RankSector Rank
PE 11.31
Fwd PE 10.35
CTSH Price Earnings VS Forward Price EarningsCTSH Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 5 10 15 20 25

4.2 Price Multiples

  • 82.95% of the companies in the same industry are more expensive than CTSH, based on the Enterprise Value to EBITDA ratio.
  • Compared to the rest of the industry, the Price/Free Cash Flow ratio of CTSH indicates a somewhat cheap valuation: CTSH is cheaper than 77.27% of the companies listed in the same industry.
Industry RankSector Rank
P/FCF 11.01
EV/EBITDA 7.15
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)1.21
PEG (5Y)1.25
EPS Next 2Y8.81%
EPS Next 3Y8.87%

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7

5. CTSH Dividend Analysis

5.1 Amount

  • With a Yearly Dividend Yield of 2.14%, CTSH has a reasonable but not impressive dividend return.
  • The stock price of CTSH dropped by -30.20% in the last 3 months. With lower prices the dividend yield is higher, but it may be a sign investors do not trust the long term dividend.
  • CTSH's Dividend Yield is rather good when compared to the industry average which is at 0.97. CTSH pays more dividend than 87.50% of the companies in the same industry.
  • CTSH's Dividend Yield is comparable with the S&P500 average which is at 1.90.
Industry RankSector Rank
Dividend Yield 2.14%

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.
  • As CTSH did not decrease their dividend in the past 5 years, we can say the dividend looks stable.
Dividend Growth(5Y)7.06%
Div Incr Years5
Div Non Decr Years7
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

  • 27.35% of the earnings are spent on dividend by CTSH. This is a low number and 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 (3/27/2026, 8:09:51 PM)

After market: 59.71 -0.02 (-0.03%)

59.73

-1.03 (-1.7%)

Chartmill FA Rating
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)02-04
Earnings (Next)04-28
Inst Owners104.67%
Inst Owner Change-0.38%
Ins Owners0.1%
Ins Owner Change1.38%
Market Cap28.57B
Revenue(TTM)21.11B
Net Income(TTM)2.23B
Analysts73.33
Price Target92.18 (54.33%)
Short Float %6.62%
Short Ratio4.65
Dividend
Industry RankSector Rank
Dividend Yield 2.14%
Yearly Dividend1.25
Dividend Growth(5Y)7.06%
DP27.35%
Div Incr Years5
Div Non Decr Years7
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)-1.05%
PT rev (3m)4.75%
EPS NQ rev (1m)-0.09%
EPS NQ rev (3m)-0.45%
EPS NY rev (1m)0.65%
EPS NY rev (3m)0.81%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)1.36%
Revenue NY rev (1m)1.47%
Revenue NY rev (3m)1.38%
Valuation
Industry RankSector Rank
PE 11.31
Fwd PE 10.35
P/S 1.35
P/FCF 11.01
P/OCF 9.91
P/B 1.9
P/tB 4.4
EV/EBITDA 7.15
EPS(TTM)5.28
EY8.84%
EPS(NY)5.77
Fwd EY9.67%
FCF(TTM)5.43
FCFY9.08%
OCF(TTM)6.03
OCFY10.09%
SpS44.14
BVpS31.4
TBVpS13.57
PEG (NY)1.21
PEG (5Y)1.25
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 5.89
F-Score7
WACC9.5%
ROIC/WACC1.55
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 Year6.2%
Revenue Next 2Y5.65%
Revenue Next 3Y5.71%
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.


Can you provide the profitability details for COGNIZANT TECH SOLUTIONS-A?

COGNIZANT TECH SOLUTIONS-A (CTSH) has a profitability rating of 8 / 10.


What are the PE and PB ratios of COGNIZANT TECH SOLUTIONS-A (CTSH) stock?

The Price/Earnings (PE) ratio for COGNIZANT TECH SOLUTIONS-A (CTSH) is 11.31 and the Price/Book (PB) ratio is 1.9.


Can you provide the expected EPS growth for CTSH stock?

The Earnings per Share (EPS) of COGNIZANT TECH SOLUTIONS-A (CTSH) is expected to grow by 9.34% in the next year.