COGNIZANT TECH SOLUTIONS-A (CTSH) Stock Fundamental Analysis
USA - NASDAQ:CTSH - US1924461023 - Common Stock
67.42 USD
-0.63 (-0.93%)
Overall CTSH gets a fundamental rating of 7 out of 10. We evaluated CTSH against 85 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. This makes CTSH very considerable 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.
Each year in the past 5 years CTSH had a positive operating cash flow.
1.2 Ratios
CTSH's Return On Assets of 12.08% is amongst the best of the industry. CTSH outperforms 91.76% of its industry peers.
CTSH's Return On Equity of 15.93% is fine compared to the rest of the industry. CTSH outperforms 78.82% of its industry peers.
The Return On Invested Capital of CTSH (14.18%) is better 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 21.61%.
| 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 83.53% of its industry peers.
CTSH's Profit Margin has been stable in the last couple of years.
CTSH has a better Operating Margin (15.52%) than 81.18% of its industry peers.
In the last couple of years the Operating Margin of CTSH has remained more or less at the same level.
With a Gross Margin value of 34.18%, CTSH perfoms like the industry average, outperforming 47.06% of the companies in the same industry.
CTSH's Gross Margin has been stable in the last couple of years.
| 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
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
CTSH has less shares outstanding than it did 5 years ago.
The debt/assets ratio for CTSH is higher compared to a year ago.
2.2 Solvency
CTSH has an Altman-Z score of 6.95. This indicates that CTSH is financially healthy and has little risk of bankruptcy at the moment.
CTSH's Altman-Z score of 6.95 is amongst the best of the industry. CTSH outperforms 82.35% 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.
CTSH has a Debt to FCF ratio of 0.26. This is amongst the best in 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 Debt to Equity ratio of 0.04. This is in the better half of the industry: CTSH outperforms 72.94% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.04 | ||
| Debt/FCF | 0.26 | ||
| Altman-Z | 6.95 |
ROIC/WACC1.56
WACC9.09%
2.3 Liquidity
CTSH has a Current Ratio of 2.41. This indicates that CTSH is financially healthy and has no problem in meeting its short term obligations.
With a decent Current ratio value of 2.41, CTSH is doing good in the industry, outperforming 72.94% of the companies in the same industry.
A Quick Ratio of 2.41 indicates that CTSH has no problem at all paying its short term obligations.
CTSH has a Quick ratio of 2.41. This is in the better half of the industry: CTSH outperforms 72.94% of its industry peers.
| 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%.
The Earnings Per Share has been growing slightly by 3.50% on average over the past years.
The Revenue has been growing slightly by 6.34% in the past year.
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
The Earnings Per Share is expected to grow by 9.47% 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 5.30% yearly.
EPS Next Y10.77%
EPS Next 2Y8.97%
EPS Next 3Y8.94%
EPS Next 5Y9.47%
Revenue Next Year6.22%
Revenue Next 2Y5.43%
Revenue Next 3Y5.66%
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
With a Price/Earnings ratio of 13.48, CTSH is valued correctly.
Compared to the rest of the industry, the Price/Earnings ratio of CTSH indicates a rather cheap valuation: CTSH is cheaper than 82.35% of the companies listed in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 27.08, CTSH is valued rather cheaply.
CTSH is valuated reasonably with a Price/Forward Earnings ratio of 11.95.
80.00% 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 23.09, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.48 | ||
| Fwd PE | 11.95 |
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.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of CTSH indicates a somewhat cheap valuation: CTSH is cheaper than 77.65% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 14.43 | ||
| EV/EBITDA | 8.58 |
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)1.25
PEG (5Y)3.86
EPS Next 2Y8.97%
EPS Next 3Y8.94%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.82%, CTSH has a reasonable but not impressive dividend return.
CTSH's Dividend Yield is rather good when compared to the industry average which is at 2.50. CTSH pays more dividend than 88.24% of the companies in the same industry.
CTSH's Dividend Yield is slightly below the S&P500 average, which is at 2.30.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.82% |
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.
As CTSH did not decrease their dividend in the past 5 years, we can say the dividend looks stable.
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.
The dividend of CTSH is growing around the same rate as the earnings are growing. If this keeps up the dividend growth is sustainable.
DP24.92%
EPS Next 2Y8.97%
EPS Next 3Y8.94%
NASDAQ:CTSH (10/28/2025, 10:06:05 AM)
67.42
-0.63 (-0.93%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners101.96%
Inst Owner Change-0.27%
Ins Owners0.1%
Ins Owner Change1.05%
Market Cap32.93B
Revenue(TTM)20.49B
Net Income(TTM)2.44B
Analysts71.88
Price Target88.44 (31.18%)
Short Float %5.65%
Short Ratio6.98
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.82% |
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)-0.12%
PT rev (3m)-0.99%
EPS NQ rev (1m)0.22%
EPS NQ rev (3m)1.43%
EPS NY rev (1m)0.8%
EPS NY rev (3m)1.58%
Revenue NQ rev (1m)0.09%
Revenue NQ rev (3m)0.99%
Revenue NY rev (1m)0.03%
Revenue NY rev (3m)0.66%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.48 | ||
| Fwd PE | 11.95 | ||
| P/S | 1.61 | ||
| P/FCF | 14.43 | ||
| P/OCF | 12.84 | ||
| P/B | 2.15 | ||
| P/tB | 4.96 | ||
| EV/EBITDA | 8.58 |
EPS(TTM)5
EY7.42%
EPS(NY)5.64
Fwd EY8.37%
FCF(TTM)4.67
FCFY6.93%
OCF(TTM)5.25
OCFY7.79%
SpS41.95
BVpS31.3
TBVpS13.61
PEG (NY)1.25
PEG (5Y)3.86
Graham Number59.34
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%
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-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 | 6.95 |
F-Score6
WACC9.09%
ROIC/WACC1.56
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 Y10.77%
EPS Next 2Y8.97%
EPS Next 3Y8.94%
EPS Next 5Y9.47%
Revenue 1Y (TTM)6.34%
Revenue growth 3Y2.17%
Revenue growth 5Y3.29%
Sales Q2Q%8.14%
Revenue Next Year6.22%
Revenue Next 2Y5.43%
Revenue Next 3Y5.66%
Revenue Next 5Y5.3%
EBIT growth 1Y6.79%
EBIT growth 3Y2.07%
EBIT growth 5Y2.53%
EBIT Next Year28.81%
EBIT Next 3Y13.14%
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%
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 13.48 and the Price/Book (PB) ratio is 2.15.
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 24.92%.