COGNIZANT TECH SOLUTIONS-A (CTSH) Stock Fundamental Analysis
USA - NASDAQ:CTSH - US1924461023 - Common Stock
69.17 USD
0 (0%)
Overall CTSH gets a fundamental rating of 7 out of 10. We evaluated CTSH against 86 industry peers in the IT Services industry. CTSH has outstanding health and profitabily ratings, belonging to the best of the industry. This is a solid base for any company. CTSH has a correct valuation and a medium growth rate. With these ratings, CTSH could be worth investigating further 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.
CTSH had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
CTSH has a Return On Assets of 12.08%. This is amongst the best in the industry. CTSH outperforms 90.70% of its industry peers.
Looking at the Return On Equity, with a value of 15.93%, CTSH is in the better half of the industry, outperforming 77.91% of the companies in the same industry.
CTSH has a Return On Invested Capital of 14.18%. This is amongst the best in the industry. CTSH outperforms 87.21% of its industry peers.
The Average Return On Invested Capital over the past 3 years for CTSH is significantly below the industry average of 21.79%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 12.08% | ||
| ROE | 15.93% | ||
| ROIC | 14.18% |
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's Profit Margin of 11.89% is amongst the best of the industry. CTSH outperforms 83.72% of its industry peers.
In the last couple of years the Profit Margin of CTSH has remained more or less at the same level.
Looking at the Operating Margin, with a value of 15.52%, CTSH belongs to the top of the industry, outperforming 82.56% of the companies in the same industry.
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 (34.18%) which 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 | 15.52% | ||
| PM (TTM) | 11.89% | ||
| GM | 34.18% |
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
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), CTSH is creating some value.
CTSH has less shares outstanding than it did 1 year ago.
The number of shares outstanding for CTSH has been reduced compared to 5 years ago.
CTSH has a worse debt/assets ratio than last year.
2.2 Solvency
CTSH has an Altman-Z score of 7.02. This indicates that CTSH is financially healthy and has little risk of bankruptcy at the moment.
CTSH has a better Altman-Z score (7.02) than 83.72% of its industry peers.
CTSH has a debt to FCF ratio of 0.26. This is a very positive value and a sign of high solvency as it would only need 0.26 years to pay back of all of its debts.
The Debt to FCF ratio of CTSH (0.26) is better than 90.70% 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.
The Debt to Equity ratio of CTSH (0.04) is better than 76.74% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.04 | ||
| Debt/FCF | 0.26 | ||
| Altman-Z | 7.02 |
ROIC/WACC1.55
WACC9.13%
2.3 Liquidity
A Current Ratio of 2.41 indicates that CTSH has no problem at all paying its short term obligations.
Looking at the Current ratio, with a value of 2.41, CTSH is in the better half of the industry, outperforming 73.26% of the companies in the same industry.
CTSH has a Quick Ratio of 2.41. This indicates that CTSH is financially healthy and has no problem in meeting its short term obligations.
With a decent Quick ratio value of 2.41, CTSH is doing good in the industry, outperforming 73.26% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.41 | ||
| Quick Ratio | 2.41 |
3. Growth
3.1 Past
CTSH shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 7.99%.
CTSH shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 3.50% yearly.
CTSH shows a small growth in Revenue. In the last year, the Revenue has grown by 6.34%.
The Revenue has been growing slightly by 3.29% on average over the past years.
EPS 1Y (TTM)7.99%
EPS 3Y4.86%
EPS 5Y3.5%
EPS Q2Q%11.97%
Revenue 1Y (TTM)6.34%
Revenue growth 3Y2.17%
Revenue growth 5Y3.29%
Sales Q2Q%8.14%
3.2 Future
Based on estimates for the next years, CTSH will show a quite strong growth in Earnings Per Share. The EPS will grow by 9.47% on average per year.
Based on estimates for the next years, CTSH will show a small growth in Revenue. The Revenue will grow by 5.30% on average per year.
EPS Next Y9.8%
EPS Next 2Y9.1%
EPS Next 3Y9.12%
EPS Next 5Y9.47%
Revenue Next Year6.19%
Revenue Next 2Y5.45%
Revenue Next 3Y5.71%
Revenue Next 5Y5.3%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
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
The Price/Earnings ratio is 13.83, which indicates a correct valuation of CTSH.
CTSH's Price/Earnings ratio is rather cheap when compared to the industry. CTSH is cheaper than 82.56% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 27.30. CTSH is valued slightly cheaper when compared to this.
A Price/Forward Earnings ratio of 12.24 indicates a correct valuation of CTSH.
82.56% 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 22.73, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.83 | ||
| Fwd PE | 12.24 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, CTSH is valued cheaper than 84.88% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, CTSH is valued cheaper than 80.23% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 14.8 | ||
| EV/EBITDA | 8.73 |
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)1.41
PEG (5Y)3.96
EPS Next 2Y9.1%
EPS Next 3Y9.12%
5. Dividend
5.1 Amount
CTSH has a Yearly Dividend Yield of 1.76%.
Compared to an average industry Dividend Yield of 2.36, CTSH pays a better dividend. On top of this CTSH pays more dividend than 88.37% of the companies listed in the same industry.
Compared to the average S&P500 Dividend Yield of 2.38, CTSH is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.76% |
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
24.92% 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.
DP24.92%
EPS Next 2Y9.1%
EPS Next 3Y9.12%
NASDAQ:CTSH (9/15/2025, 10:03:08 AM)
69.17
0 (0%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners102.9%
Inst Owner Change-0.67%
Ins Owners0.1%
Ins Owner Change1.42%
Market Cap33.78B
Analysts70.63
Price Target88.55 (28.02%)
Short Float %4.66%
Short Ratio5.78
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.76% |
Yearly Dividend1.21
Dividend Growth(5Y)8.46%
DP24.92%
Div Incr Years5
Div Non Decr Years7
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)1.25%
Min EPS beat(2)0.64%
Max EPS beat(2)1.85%
EPS beat(4)4
Avg EPS beat(4)3.77%
Min EPS beat(4)0.64%
Max EPS beat(4)6.84%
EPS beat(8)7
Avg EPS beat(8)4.16%
EPS beat(12)9
Avg EPS beat(12)3.54%
EPS beat(16)12
Avg EPS beat(16)3.16%
Revenue beat(2)0
Avg Revenue beat(2)-1.35%
Min Revenue beat(2)-1.82%
Max Revenue beat(2)-0.87%
Revenue beat(4)0
Avg Revenue beat(4)-1.37%
Min Revenue beat(4)-1.82%
Max Revenue beat(4)-0.87%
Revenue beat(8)0
Avg Revenue beat(8)-1.47%
Revenue beat(12)0
Avg Revenue beat(12)-1.55%
Revenue beat(16)0
Avg Revenue beat(16)-1.63%
PT rev (1m)-0.76%
PT rev (3m)0.03%
EPS NQ rev (1m)0.05%
EPS NQ rev (3m)2.04%
EPS NY rev (1m)0.69%
EPS NY rev (3m)0.86%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)1.78%
Revenue NY rev (1m)0.58%
Revenue NY rev (3m)0.67%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.83 | ||
| Fwd PE | 12.24 | ||
| P/S | 1.65 | ||
| P/FCF | 14.8 | ||
| P/OCF | 13.17 | ||
| P/B | 2.21 | ||
| P/tB | 5.08 | ||
| EV/EBITDA | 8.73 |
EPS(TTM)5
EY7.23%
EPS(NY)5.65
Fwd EY8.17%
FCF(TTM)4.67
FCFY6.75%
OCF(TTM)5.25
OCFY7.59%
SpS41.95
BVpS31.3
TBVpS13.61
PEG (NY)1.41
PEG (5Y)3.96
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 12.08% | ||
| ROE | 15.93% | ||
| ROCE | 18.69% | ||
| ROIC | 14.18% | ||
| ROICexc | 15.87% | ||
| ROICexgc | 36.79% | ||
| OM | 15.52% | ||
| PM (TTM) | 11.89% | ||
| GM | 34.18% | ||
| FCFM | 11.14% |
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%
ROICexcg growth 3Y-3.2%
ROICexcg 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-Score6
Asset Turnover1.02
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.04 | ||
| Debt/FCF | 0.26 | ||
| Debt/EBITDA | 0.15 | ||
| Cap/Depr | 51.36% | ||
| Cap/Sales | 1.38% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 68.77% | ||
| Profit Quality | 93.68% | ||
| Current Ratio | 2.41 | ||
| Quick Ratio | 2.41 | ||
| Altman-Z | 7.02 |
F-Score6
WACC9.13%
ROIC/WACC1.55
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)7.99%
EPS 3Y4.86%
EPS 5Y3.5%
EPS Q2Q%11.97%
EPS Next Y9.8%
EPS Next 2Y9.1%
EPS Next 3Y9.12%
EPS Next 5Y9.47%
Revenue 1Y (TTM)6.34%
Revenue growth 3Y2.17%
Revenue growth 5Y3.29%
Sales Q2Q%8.14%
Revenue Next Year6.19%
Revenue Next 2Y5.45%
Revenue Next 3Y5.71%
Revenue Next 5Y5.3%
EBIT growth 1Y6.79%
EBIT growth 3Y2.07%
EBIT growth 5Y2.53%
EBIT Next Year29.47%
EBIT Next 3Y13.4%
EBIT Next 5Y9.54%
FCF growth 1Y5.45%
FCF growth 3Y-6.23%
FCF growth 5Y-2.81%
OCF growth 1Y2.64%
OCF growth 3Y-5.22%
OCF growth 5Y-3.2%