84.18 USD
-0.43 (-0.51%)
84.18 USD
0 (0%)
Taking everything into account, CTSH scores 7 out of 10 in our fundamental rating. CTSH was compared to 88 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 is not valued too expensively and it also shows a decent growth rate. This makes CTSH very considerable for quality investing!
1. Profitability
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.
1.2 Ratios
- The Return On Assets of CTSH (10.57%) is better than 86.36% of its industry peers.
- CTSH has a better Return On Equity (14.28%) than 77.27% of its industry peers.
- CTSH has a better Return On Invested Capital (14.88%) than 89.77% of its industry peers.
- The Average Return On Invested Capital over the past 3 years for CTSH is significantly below the industry average of 29.06%.
- The 3 year average ROIC (14.72%) for CTSH is below the current ROIC(14.88%), indicating increased profibility in the last year.
| 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
- The Profit Margin of CTSH (10.20%) is better than 77.27% of its industry peers.
- In the last couple of years the Profit Margin of CTSH has remained more or less at the same level.
- CTSH has a Operating Margin of 15.70%. This is amongst the best in the industry. CTSH outperforms 82.95% of its industry peers.
- CTSH's Operating Margin has been stable in the last couple of years.
- CTSH has a Gross Margin (34.06%) which is comparable to the rest of the industry.
- CTSH's Gross Margin has been stable in the last couple of years.
| 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
- The debt/assets ratio for CTSH is higher compared to a year ago.
2.2 Solvency
- CTSH has an Altman-Z score of 7.57. This indicates that CTSH is financially healthy and has little risk of bankruptcy at the moment.
- CTSH has a Altman-Z score of 7.57. This is amongst the best in the industry. CTSH outperforms 86.36% of its industry peers.
- 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.
- Looking at the Debt to FCF ratio, with a value of 0.22, CTSH belongs to the top of the industry, outperforming 89.77% of the companies in the same industry.
- 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 75.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.04 | ||
| Debt/FCF | 0.22 | ||
| Altman-Z | 7.57 |
ROIC/WACC1.65
WACC9.03%
2.3 Liquidity
- CTSH has a Current Ratio of 2.36. This indicates that CTSH is financially healthy and has no problem in meeting its short term obligations.
- CTSH has a better Current ratio (2.36) than 67.05% of its industry peers.
- CTSH has a Quick Ratio of 2.36. This indicates that CTSH is financially healthy and has no problem in meeting its short term obligations.
- Looking at the Quick ratio, with a value of 2.36, CTSH is in the better half of the industry, outperforming 70.45% 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.
- Looking at the last year, CTSH shows a small growth in Revenue. The Revenue has grown by 7.44% in the last year.
- Measured over the past years, CTSH shows a small growth in Revenue. The Revenue has been growing by 3.29% on average per year.
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
- The Earnings Per Share is expected to grow by 9.23% on average over the next years. This is quite good.
- The Revenue is expected to grow by 4.89% on average over the next years.
EPS Next Y12.78%
EPS Next 2Y9.93%
EPS Next 3Y9.55%
EPS Next 5Y9.23%
Revenue Next Year6.88%
Revenue Next 2Y5.75%
Revenue Next 3Y5.71%
Revenue Next 5Y4.89%
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 accelerating.
- When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
- With a Price/Earnings ratio of 16.38, CTSH is valued correctly.
- Based on the Price/Earnings ratio, CTSH is valued a bit cheaper than 71.59% of the companies in the same industry.
- When comparing the Price/Earnings ratio of CTSH to the average of the S&P500 Index (27.21), we can say CTSH is valued slightly cheaper.
- The Price/Forward Earnings ratio is 14.67, which indicates a correct valuation of CTSH.
- 75.00% of the companies in the same industry are more expensive than CTSH, based on the Price/Forward Earnings ratio.
- CTSH is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 24.26, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.38 | ||
| Fwd PE | 14.67 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, CTSH is valued a bit cheaper than the industry average as 78.41% of the companies are valued more expensively.
- 75.00% of the companies in the same industry are more expensive than CTSH, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 15.33 | ||
| EV/EBITDA | 10.2 |
4.3 Compensation for Growth
- The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
- The decent profitability rating of CTSH may justify a higher PE ratio.
PEG (NY)1.28
PEG (5Y)4.68
EPS Next 2Y9.93%
EPS Next 3Y9.55%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 1.46%, CTSH has a reasonable but not impressive dividend return.
- Compared to an average industry Dividend Yield of 0.43, CTSH pays a better dividend. On top of this CTSH pays more dividend than 86.36% of the companies listed in the same industry.
- CTSH's Dividend Yield is comparable with the S&P500 average which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.46% |
5.2 History
- The dividend of CTSH is nicely growing with an annual growth rate of 8.46%!
- CTSH has been paying a dividend for over 5 years, so it has already some track record.
- CTSH has not decreased its dividend in the past 5 years, so it has a somewhat stable track record.
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 2Y9.93%
EPS Next 3Y9.55%
COGNIZANT TECH SOLUTIONS-A / CTSH 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 5 / 10 to COGNIZANT TECH SOLUTIONS-A (CTSH). This can be considered as Fairly Valued.
Can you provide the profitability details for COGNIZANT TECH SOLUTIONS-A?
COGNIZANT TECH SOLUTIONS-A (CTSH) has a profitability rating of 7 / 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 16.38 and the Price/Book (PB) ratio is 2.73.
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 12.78% in the next year.