COGNIZANT TECH SOLUTIONS-A (CTSH) Stock Fundamental Analysis
USA - NASDAQ:CTSH - US1924461023 - Common Stock
72.35 USD
+0.06 (+0.08%)
72.35 USD
0 (0%)
Taking everything into account, CTSH scores 7 out of 10 in our fundamental rating. CTSH was compared to 85 industry peers in the IT Services industry. CTSH scores excellent points on both the profitability and health parts. This is a solid base for a good stock. CTSH has a correct valuation and a medium growth rate. 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.
Each year in the past 5 years CTSH has been profitable.
In the past 5 years CTSH always reported a positive cash flow from operatings.
1.2 Ratios
Looking at the Return On Assets, with a value of 10.57%, CTSH belongs to the top of the industry, outperforming 87.06% of the companies in the same industry.
CTSH has a Return On Equity of 14.28%. This is in the better half of the industry: CTSH outperforms 76.47% of its industry peers.
CTSH has a better Return On Invested Capital (14.88%) than 87.06% of its industry peers.
The Average Return On Invested Capital over the past 3 years for CTSH is significantly below the industry average of 30.25%.
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
CTSH has a Profit Margin of 10.20%. This is in the better half of the industry: CTSH outperforms 77.65% of its industry peers.
CTSH's Profit Margin has been stable in the last couple of years.
CTSH has a better Operating Margin (15.70%) than 82.35% of its industry peers.
In the last couple of years the Operating Margin of CTSH has remained more or less at the same level.
CTSH has a Gross Margin (34.06%) which is in line with its industry peers.
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.
The number of shares outstanding for CTSH has been reduced compared to 1 year ago.
CTSH has less shares outstanding than it did 5 years ago.
CTSH has a worse debt/assets ratio than last year.
2.2 Solvency
CTSH has an Altman-Z score of 6.93. This indicates that CTSH is financially healthy and has little risk of bankruptcy at the moment.
CTSH's Altman-Z score of 6.93 is amongst the best of the industry. CTSH outperforms 88.24% 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.
CTSH's Debt to FCF ratio of 0.22 is amongst the best of the industry. CTSH outperforms 88.24% 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 better Debt to Equity ratio (0.04) than 71.76% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.04 | ||
| Debt/FCF | 0.22 | ||
| Altman-Z | 6.93 |
ROIC/WACC1.71
WACC8.69%
2.3 Liquidity
A Current Ratio of 2.36 indicates that CTSH has no problem at all paying its short term obligations.
With a decent Current ratio value of 2.36, CTSH is doing good in the industry, outperforming 71.76% of the companies in the same industry.
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 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
CTSH shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 8.90%, which is quite good.
CTSH shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 3.50% yearly.
The Revenue has been growing slightly by 7.44% in the past year.
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
The Earnings Per Share is expected to grow by 9.23% on average over the next years. This is quite good.
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 14.08 indicates a correct valuation of CTSH.
CTSH's Price/Earnings ratio is a bit cheaper when compared to the industry. CTSH is cheaper than 75.29% of the companies in the same industry.
When comparing the Price/Earnings ratio of CTSH to the average of the S&P500 Index (25.07), we can say CTSH is valued slightly cheaper.
A Price/Forward Earnings ratio of 12.65 indicates a correct valuation of CTSH.
Compared to the rest of the industry, the Price/Forward Earnings ratio of CTSH indicates a somewhat cheap valuation: CTSH is cheaper than 80.00% of the companies listed in the same industry.
CTSH's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 34.08.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.08 | ||
| Fwd PE | 12.65 |
4.2 Price Multiples
81.18% of the companies in the same industry are more expensive than CTSH, based on the Enterprise Value to EBITDA ratio.
CTSH's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. CTSH is cheaper than 77.65% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 13.33 | ||
| EV/EBITDA | 8.76 |
4.3 Compensation for Growth
CTSH's 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)1.14
PEG (5Y)4.03
EPS Next 2Y9.73%
EPS Next 3Y9.5%
5. Dividend
5.1 Amount
CTSH has a Yearly Dividend Yield of 1.69%.
CTSH's Dividend Yield is rather good when compared to the industry average which is at 2.00. CTSH pays more dividend than 89.41% of the companies in the same industry.
Compared to the average S&P500 Dividend Yield of 2.44, CTSH is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.69% |
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.
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
CTSH pays out 28.62% 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.
DP28.62%
EPS Next 2Y9.73%
EPS Next 3Y9.5%
72.35
+0.06 (+0.08%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners101.96%
Inst Owner Change1.19%
Ins Owners0.1%
Ins Owner Change3.11%
Market Cap35.34B
Revenue(TTM)20.86B
Net Income(TTM)2.13B
Analysts72.35
Price Target85.97 (18.83%)
Short Float %6.12%
Short Ratio6.51
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.69% |
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)-2.8%
PT rev (3m)-3.65%
EPS NQ rev (1m)0.14%
EPS NQ rev (3m)0.43%
EPS NY rev (1m)2.21%
EPS NY rev (3m)3%
Revenue NQ rev (1m)0.63%
Revenue NQ rev (3m)0.71%
Revenue NY rev (1m)0.54%
Revenue NY rev (3m)1.17%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.08 | ||
| Fwd PE | 12.65 | ||
| P/S | 1.69 | ||
| P/FCF | 13.33 | ||
| P/OCF | 12 | ||
| P/B | 2.37 | ||
| P/tB | 5.59 | ||
| EV/EBITDA | 8.76 |
EPS(TTM)5.14
EY7.1%
EPS(NY)5.72
Fwd EY7.9%
FCF(TTM)5.43
FCFY7.5%
OCF(TTM)6.03
OCFY8.33%
SpS42.7
BVpS30.5
TBVpS12.95
PEG (NY)1.14
PEG (5Y)4.03
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 | 6.93 |
F-Score7
WACC8.69%
ROIC/WACC1.71
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 14.08 and the Price/Book (PB) ratio is 2.37.
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%.