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COGNIZANT TECH SOLUTIONS-A (CTSH) Stock Fundamental Analysis

NASDAQ:CTSH - US1924461023 - Common Stock

72.37 USD
+1.29 (+1.81%)
Last: 8/22/2025, 8:01:09 PM
72.37 USD
0 (0%)
After Hours: 8/22/2025, 8:01:09 PM
Fundamental Rating

7

We assign a fundamental rating of 7 out of 10 to CTSH. CTSH was compared to 83 industry peers in the IT Services industry. CTSH gets an excellent profitability rating and is at the same time showing great financial health properties. CTSH has a decent growth rate and is not valued too expensively. With these ratings, CTSH could be worth investigating further for quality investing!.


Dividend Valuation Growth Profitability Health

7

1. Profitability

1.1 Basic Checks

CTSH had positive earnings in the past year.
In the past year CTSH had a positive cash flow from operations.
Each year in the past 5 years CTSH has been profitable.
CTSH had a positive operating cash flow in each of the past 5 years.
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 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 1B 2B 3B

1.2 Ratios

The Return On Assets of CTSH (12.08%) is better than 90.36% of its industry peers.
CTSH's Return On Equity of 15.93% is fine compared to the rest of the industry. CTSH outperforms 78.31% of its industry peers.
The Return On Invested Capital of CTSH (14.18%) is better than 87.95% of its industry peers.
The Average Return On Invested Capital over the past 3 years for CTSH is significantly below the industry average of 22.73%.
Industry RankSector 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%
CTSH Yearly ROA, ROE, ROICCTSH Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 5 10 15

1.3 Margins

The Profit Margin of CTSH (11.89%) is better than 84.34% 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 15.52%. This is amongst the best in the industry. CTSH outperforms 83.13% 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 of 34.18%. This is comparable to the rest of the industry: CTSH outperforms 46.99% of its industry peers.
In the last couple of years the Gross Margin of CTSH has remained more or less at the same level.
Industry RankSector Rank
OM 15.52%
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%
CTSH Yearly Profit, Operating, Gross MarginsCTSH Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 10 20 30 40

8

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.
The debt/assets ratio for CTSH is higher compared to a year ago.
CTSH Yearly Shares OutstandingCTSH Yearly Shares OutstandingYearly Shares Outstanding 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 200M 400M 600M
CTSH Yearly Total Debt VS Total AssetsCTSH Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 5B 10B 15B

2.2 Solvency

CTSH has an Altman-Z score of 7.21. This indicates that CTSH is financially healthy and has little risk of bankruptcy at the moment.
CTSH has a better Altman-Z score (7.21) than 86.75% 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 better Debt to FCF ratio (0.26) than 91.57% of its industry peers.
A Debt/Equity ratio of 0.04 indicates that CTSH is not too dependend on debt financing.
With a decent Debt to Equity ratio value of 0.04, CTSH is doing good in the industry, outperforming 77.11% of the companies in the same industry.
Industry RankSector Rank
Debt/Equity 0.04
Debt/FCF 0.26
Altman-Z 7.21
ROIC/WACC1.57
WACC9.02%
CTSH Yearly LT Debt VS Equity VS FCFCTSH Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 5B 10B

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.
CTSH's Current ratio of 2.41 is fine compared to the rest of the industry. CTSH outperforms 73.49% of its industry peers.
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 73.49% of the companies in the same industry.
Industry RankSector Rank
Current Ratio 2.41
Quick Ratio 2.41
CTSH Yearly Current Assets VS Current LiabilitesCTSH Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2B 4B 6B 8B

5

3. Growth

3.1 Past

The Earnings Per Share has been growing slightly by 7.99% over the past year.
Measured over the past 5 years, CTSH shows a small growth in Earnings Per Share. The EPS has been growing by 3.50% on average per year.
Looking at the last year, CTSH shows a small growth in Revenue. The Revenue has grown by 6.34% 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)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

CTSH is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 9.47% yearly.
The Revenue is expected to grow by 5.30% on average over the next years.
EPS Next Y9.8%
EPS Next 2Y9.1%
EPS Next 3Y9.12%
EPS Next 5Y9.47%
Revenue Next Year6.21%
Revenue Next 2Y5.43%
Revenue Next 3Y5.77%
Revenue Next 5Y5.3%

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.
CTSH Yearly Revenue VS EstimatesCTSH Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 5B 10B 15B 20B 25B
CTSH Yearly EPS VS EstimatesCTSH Yearly EPS VS EstimatesYearly EPS VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2 4 6

6

4. Valuation

4.1 Price/Earnings Ratio

CTSH is valuated correctly with a Price/Earnings ratio of 14.47.
CTSH's Price/Earnings ratio is a bit cheaper when compared to the industry. CTSH is cheaper than 78.31% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 27.24, CTSH is valued a bit cheaper.
The Price/Forward Earnings ratio is 12.80, which 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 78.31% of the companies listed in the same industry.
CTSH is valuated cheaply when we compare the Price/Forward Earnings ratio to 35.82, which is the current average of the S&P500 Index.
Industry RankSector Rank
PE 14.47
Fwd PE 12.8
CTSH Price Earnings VS Forward Price EarningsCTSH Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 20 40 60

4.2 Price Multiples

CTSH's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. CTSH is cheaper than 85.54% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of CTSH indicates a rather cheap valuation: CTSH is cheaper than 80.72% of the companies listed in the same industry.
Industry RankSector Rank
P/FCF 15.49
EV/EBITDA 9.15
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.
CTSH has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)1.48
PEG (5Y)4.14
EPS Next 2Y9.1%
EPS Next 3Y9.12%

6

5. Dividend

5.1 Amount

With a Yearly Dividend Yield of 1.74%, 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 2.49. CTSH pays more dividend than 87.95% of the companies in the same industry.
Compared to the average S&P500 Dividend Yield of 2.32, CTSH is paying slightly less dividend.
Industry RankSector Rank
Dividend Yield 1.74%

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
CTSH Yearly Dividends per shareCTSH Yearly Dividends per shareYearly Dividends per share 2017 2018 2019 2020 2021 2022 2023 2024 2025 0.2 0.4 0.6 0.8 1

5.3 Sustainability

CTSH pays out 24.92% 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.
DP24.92%
EPS Next 2Y9.1%
EPS Next 3Y9.12%
CTSH Yearly Income VS Free CF VS DividendCTSH Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 500M 1B 1.5B 2B 2.5B
CTSH Dividend Payout.CTSH Dividend Payout, showing the Payout Ratio.CTSH Dividend Payout.PayoutRetained Earnings

COGNIZANT TECH SOLUTIONS-A

NASDAQ:CTSH (8/22/2025, 8:01:09 PM)

After market: 72.37 0 (0%)

72.37

+1.29 (+1.81%)

Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)07-30 2025-07-30/amc
Earnings (Next)10-28 2025-10-28/amc
Inst Owners102.9%
Inst Owner Change-0.67%
Ins Owners0.1%
Ins Owner Change1.6%
Market Cap35.35B
Analysts70.3
Price Target88.89 (22.83%)
Short Float %3.52%
Short Ratio4.46
Dividend
Industry RankSector Rank
Dividend Yield 1.74%
Yearly Dividend1.21
Dividend Growth(5Y)8.46%
DP24.92%
Div Incr Years5
Div Non Decr Years7
Ex-Date08-18 2025-08-18 (0.31)
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)-0.49%
PT rev (3m)0.82%
EPS NQ rev (1m)1.18%
EPS NQ rev (3m)2.04%
EPS NY rev (1m)0.69%
EPS NY rev (3m)0.86%
Revenue NQ rev (1m)0.89%
Revenue NQ rev (3m)1.78%
Revenue NY rev (1m)0.65%
Revenue NY rev (3m)0.69%
Valuation
Industry RankSector Rank
PE 14.47
Fwd PE 12.8
P/S 1.73
P/FCF 15.49
P/OCF 13.78
P/B 2.31
P/tB 5.32
EV/EBITDA 9.15
EPS(TTM)5
EY6.91%
EPS(NY)5.65
Fwd EY7.81%
FCF(TTM)4.67
FCFY6.46%
OCF(TTM)5.25
OCFY7.26%
SpS41.95
BVpS31.3
TBVpS13.61
PEG (NY)1.48
PEG (5Y)4.14
Profitability
Industry RankSector 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 RankSector 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 7.21
F-Score6
WACC9.02%
ROIC/WACC1.57
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 Year6.21%
Revenue Next 2Y5.43%
Revenue Next 3Y5.77%
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%