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Cognizant Technology Solutions

Nasdaq:CTSH
Snowflake Description

Flawless balance sheet and good value.

The Snowflake is generated from 30 checks in 5 different areas, read more below.
CTSH
Nasdaq
$26B
Market Cap
  1. Home
  2. US
  3. Software
Company description

Cognizant Technology Solutions Corporation, a professional services company, provides consulting and technology, and outsourcing services worldwide. The last earnings update was 43 days ago. More info.


Add to Portfolio Compare Print
  • Cognizant Technology Solutions has significant price volatility in the past 3 months.
CTSH Share Price and Events
7 Day Returns
5.8%
NasdaqGS:CTSH
13.5%
US IT
10.5%
US Market
1 Year Returns
-35.6%
NasdaqGS:CTSH
-3.5%
US IT
-11.5%
US Market
CTSH Shareholder Return
  7 Day 30 Day 90 Day 1 Year 3 Year 5 Year
Cognizant Technology Solutions (CTSH) 5.8% -25.1% -24.9% -35.6% -21.6% -25.4%
US IT 13.5% -14.5% -17.4% -3.5% 52.4% 72.7%
US Market 10.5% -15.4% -21.4% -11.5% 5.4% 18.1%
1 Year Return vs Industry and Market
  • CTSH underperformed the IT industry which returned -3.5% over the past year.
  • CTSH underperformed the Market in United States of America which returned -11.5% over the past year.
Price Volatility
CTSH
Industry
5yr Volatility vs Market

CTSH Value

 Is Cognizant Technology Solutions undervalued based on future cash flows and its price relative to the stock market?

Value is all about what a company is worth versus what price it is available for. If you went into a grocery store and all the bananas were on sale at half price, they could be considered undervalued.
INTRINSIC VALUE BASED ON FUTURE CASH FLOWS
Here we compare the current share price of Cognizant Technology Solutions to its discounted cash flow analysis.value.

The discounted cash flow value is simply looking at what the company is worth today, based on estimates of how much money it is expected to make in the future.
Raw Data

Below are the data sources, inputs and calculation used to determine the intrinsic value for Cognizant Technology Solutions.

NasdaqGS:CTSH Discounted Cash Flow Data Sources
Data Point Source Value
Valuation Model 2 Stage Free Cash Flow to Equity
Levered Free Cash Flow Average of 30 Analyst Estimates (S&P Global) See below
Discount Rate (Cost of Equity) See below 7%
Perpetual Growth Rate 10-Year US Government Bond Rate 1.7%

An important part of a discounted cash flow is the discount rate, below we explain how it has been calculated.

Calculation of Discount Rate/ Cost of Equity for NasdaqGS:CTSH
Data Point Calculation/ Source Result
Risk-Free Rate 10-Year US Govt Bond Rate 1.7%
Equity Risk Premium S&P Global 5.4%
IT Unlevered Beta Simply Wall St/ S&P Global 0.9
Re-levered Beta = Unlevered beta (1 + (1- tax rate) (Debt/Equity))
= 0.902 (1 + (1- 21%) (6.68%))
0.966
Levered Beta Levered Beta limited to 0.8 to 2.0
(practical range for a stable firm)
0.97
Discount Rate/ Cost of Equity = Cost of Equity = Risk Free Rate + (Levered Beta * Equity Risk Premium)
= 1.74% + (0.966 * 5.44%)
7%

Discounted Cash Flow Calculation for NasdaqGS:CTSH using 2 Stage Free Cash Flow to Equity Model

The calculations below outline how an intrinsic value for Cognizant Technology Solutions is arrived at by discounting future cash flows to their present value using the 2 stage method. We try to start with analysts estimates of free cash flow, however if these are not available we use the most recent financial results. In the 1st stage we continue to grow the free cash flow over a 10 year period, with the growth rate trending towards the perpetual growth rate used in the 2nd stage. The 2nd stage assumes the company grows at a stable rate into perpetuity.

Note: Free cash flow to equity valuations ignore the company's cash or debt.

NasdaqGS:CTSH DCF 1st Stage: Next 10 year cash flow forecast
Levered FCF (USD, Millions) Source Present Value
Discounted (@ 7%)
2020 2,008.60 Analyst x10 1,877.28
2021 2,220.12 Analyst x9 1,939.31
2022 2,423.39 Analyst x6 1,978.46
2023 2,520.63 Est @ 4.01% 1,923.31
2024 2,604.58 Est @ 3.33% 1,857.44
2025 2,678.91 Est @ 2.85% 1,785.53
2026 2,746.40 Est @ 2.52% 1,710.84
2027 2,809.18 Est @ 2.29% 1,635.53
2028 2,868.78 Est @ 2.12% 1,561.04
2029 2,926.37 Est @ 2.01% 1,488.27
Present value of next 10 years cash flows $17,757.00
NasdaqGS:CTSH DCF 2nd Stage: Terminal Value
Calculation Result
Terminal Value = FCF2029 × (1 + g) ÷ (Discount Rate – g)
= $2,926.37 × (1 + 1.74%) ÷ (7% – 1.74%)
$56,652.62
Present Value of Terminal Value = Terminal Value ÷ (1 + r)10
= $56,652.62 ÷ (1 + 7%)10
$28,811.85
NasdaqGS:CTSH Total Equity Value
Calculation Result
Total Equity Value = Present value of next 10 years cash flows + Terminal Value
= $17,757.00 + $28,811.85
$46,568.85
Equity Value per Share
(USD)
= Total value / Shares Outstanding
= $46,568.85 / 548.64
$84.88
NasdaqGS:CTSH Discount to Share Price
Calculation Result
Value per share (USD) From above. $84.88
Current discount Discount to share price of $46.66
= -1 x ($46.66 - $84.88) / $84.88
45%

Learn more about our DCF calculations in Simply Wall St’s analysis model .

Current Discount
Amount off the current price Cognizant Technology Solutions is available for.
Intrinsic value
45%
Share price is $46.66 vs Future cash flow value of $84.88
Current Discount Checks
For Cognizant Technology Solutions to be considered undervalued it must be available for at least 20% below the current price. Less than 40% is even better.
  • Cognizant Technology Solutions's share price is below the future cash flow value, and at a moderate discount (> 20%).
  • Cognizant Technology Solutions's share price is below the future cash flow value, and at a substantial discount (> 40%).
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing when they are out of season, or how much your home is worth.

The amount the stock market is willing to pay for Cognizant Technology Solutions's earnings, growth and assets is considered below, and whether this is a fair price.
Price based on past earnings
Are Cognizant Technology Solutions's earnings available for a low price, and how does this compare to other companies in the same industry?
Raw Data
NasdaqGS:CTSH PE (Price to Earnings) Ratio Data Sources
Data Point Source Value
Earnings Per Share * Company Filings (2019-12-31) in USD $3.30
NasdaqGS:CTSH Share Price ** NasdaqGS (2020-03-27) in USD $46.66
United States of America IT Industry PE Ratio Median Figure of 71 Publicly-Listed IT Companies 24.84x
United States of America Market PE Ratio Median Figure of 2,939 Publicly-Listed Companies 12.96x

* Trailing twelve months (TTM) annual GAAP earnings per share excluding extraordinary items.

** Primary Listing of Cognizant Technology Solutions.

NasdaqGS:CTSH PE (Price to Earnings) Ratio Calculation
Calculation Outcome
PE Ratio

= NasdaqGS:CTSH Share Price ÷ EPS (both in USD)

= 46.66 ÷ 3.30

14.16x

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Cognizant Technology Solutions is good value based on earnings compared to the US IT industry average.
  • Cognizant Technology Solutions is overvalued based on earnings compared to the United States of America market.
Price based on expected Growth
Does Cognizant Technology Solutions's expected growth come at a high price?
Raw Data
NasdaqGS:CTSH PEG (Price to Earnings to Growth) Ratio Data Sources
Data Point Source Value
PE Ratio See PE Ratio Section 14.16x
Net Income Annual Growth Rate See Future Growth Section.
Line of Best Fit* through Consensus Estimate Earnings of 30 Analysts
9.4%per year
United States of America IT Industry PEG Ratio Median Figure of 60 Publicly-Listed IT Companies 1.86x
United States of America Market PEG Ratio Median Figure of 2,005 Publicly-Listed Companies 1x

*Line of best fit is calculated by linear regression .

NasdaqGS:CTSH PEG (Price to Earnings to Growth) Ratio Calculation
Calculation Outcome
PEG Ratio

= PE Ratio ÷ Net Income Annual Growth Rate

= 14.16x ÷ 9.4%

1.51x

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Cognizant Technology Solutions is poor value based on expected growth next year.
Price based on value of assets
What value do investors place on Cognizant Technology Solutions's assets?
Raw Data
NasdaqGS:CTSH PB (Price to Book) Ratio Data Sources
Data Point Source Value
Book Value per Share Company Filings (2019-12-31) in USD $20.11
NasdaqGS:CTSH Share Price * NasdaqGS (2020-03-27) in USD $46.66
United States of America IT Industry PB Ratio Median Figure of 118 Publicly-Listed IT Companies 2.71x
United States of America Market PB Ratio Median Figure of 5,148 Publicly-Listed Companies 1.26x
NasdaqGS:CTSH PB (Price to Book) Ratio Calculation
Calculation Outcome
PB Ratio

= NasdaqGS:CTSH Share Price ÷ Book Value per Share (both in USD)

= 46.66 ÷ 20.11

2.32x

* Primary Listing of Cognizant Technology Solutions.

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Cognizant Technology Solutions is good value based on assets compared to the US IT industry average.
X
Value checks
We assess Cognizant Technology Solutions's value by looking at:
  1. Is the discounted cash flow value less than 20%, or 40% of the share price? (2 checks) ( Click here or on bar chart for details of DCF calculation. )
  2. Is the PE ratio less than the market average, and/ or less than the IT industry average (and greater than 0)? (2 checks)
  3. Is the PEG ratio within a reasonable range (0 to 1)? (1 check)
  4. Is the PB ratio less than the IT industry average (and greater than 0)? (1 check)
  5. Cognizant Technology Solutions has a total score of 4/6, see the detailed checks below.

    Note: We use GAAP Earnings per Share in all our calculations including PE and PEG Ratio.

    Full details on the Value part of the Simply Wall St company analysis model.

CTSH Future Performance

 How is Cognizant Technology Solutions expected to perform in the next 1 to 3 years based on estimates from 30 analysts?

The future performance of a company is measured in the same way as past performance, by looking at estimated growth and how much profit it is expected to make.

Future estimates come from professional analysts. Just like forecasting the weather, they don’t always get it right!
Annual Growth Rate
9.4%
Expected annual growth in earnings.
Earnings growth vs Low Risk Savings
Is Cognizant Technology Solutions expected to grow at an attractive rate?
  • Cognizant Technology Solutions's earnings growth is expected to exceed the low risk savings rate of 1.7%.
Growth vs Market Checks
  • Cognizant Technology Solutions's earnings growth is positive but not above the United States of America market average.
  • Cognizant Technology Solutions's revenue growth is positive but not above the United States of America market average.
Annual Growth Rates Comparison
Raw Data
NasdaqGS:CTSH Future Growth Rates Data Sources
Data Point Source Value (per year)
NasdaqGS:CTSH Future Earnings Growth Rate Line of Best Fit* through Consensus Estimate Earnings of 30 Analysts 9.4%
NasdaqGS:CTSH Future Revenue Growth Rate Line of Best Fit* through Consensus Estimate Revenue of 30 Analysts 4.2%
United States of America IT Industry Earnings Growth Rate Market Cap Weighted Average 16.5%
United States of America IT Industry Revenue Growth Rate Market Cap Weighted Average 10.5%
United States of America Market Earnings Growth Rate Market Cap Weighted Average 12.3%
United States of America Market Revenue Growth Rate Market Cap Weighted Average 7.3%

*Line of best fit is calculated by linear regression .

Industry and Market average data is calculated daily.

Learn more about our growth rate calculations in Simply Wall St’s analysis model.

Analysts growth expectations
Raw Data
NasdaqGS:CTSH Analysts Growth Expectations Data Sources
Data Point Source Value
Past Financials Company Filings (2 months ago) See Below
Future Estimates Average of up to 30 Analyst Estimates (S&P Global) See Below
All numbers in USD Millions and using Trailing twelve months (TTM) annual period rather than quarterly.
NasdaqGS:CTSH Future Estimates Data
Date (Data in USD Millions) Revenue Cash Flow Net Income * Avg. No. Analysts
2024-12-31 20,456 2
2023-12-31 20,194 3,090 2,589 3
2022-12-31 19,198 2,886 2,457 11
2021-12-31 18,108 2,710 2,325 28
2020-12-31 17,268 2,450 2,108 30
2020-03-28
NasdaqGS:CTSH Past Financials Data
Date (Data in USD Millions) Revenue Cash Flow Net Income *
2019-12-31 16,783 2,499 1,842
2019-09-30 16,628 2,263 2,095
2019-06-30 16,458 2,408 2,075
2019-03-31 16,323 2,473 2,022
2018-12-31 16,125 2,592 2,101
2018-09-30 15,824 2,726 1,435
2018-06-30 15,512 2,637 1,453
2018-03-31 15,176 2,518 1,467
2017-12-31 14,810 2,407 1,504
2017-09-30 14,444 2,175 1,938
2017-06-30 14,131 2,005 1,887
2017-03-31 13,831 1,850 1,669

*GAAP earnings excluding extraordinary items.

Super high growth metrics
High Growth Checks
  • Cognizant Technology Solutions's earnings are expected to grow by 9.4% yearly, however this is not considered high growth (20% yearly).
  • Cognizant Technology Solutions's revenue is expected to grow by 4.2% yearly, however this is not considered high growth (20% yearly).
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can be gauged below. We look back 3 years and see if they were any good at predicting what actually occurred. We also show the highest and lowest estimates looking forward to see if there is a wide range.
Raw Data
NasdaqGS:CTSH Past and Future Earnings per Share
Data Point Source Value
Past Financials Company Filings (2 months ago) See Below
Future Estimates Average of up to 30 Analyst Estimates (S&P Global) See Below

All data from Cognizant Technology Solutions Company Filings, last reported 2 months ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

NasdaqGS:CTSH Future Estimates Data
Date (Data in USD Millions) EPS * EPS High Estimate EPS Low Estimate Avg. No. Analysts
2024-12-31
2023-12-31 5.05 5.05 5.05 1.00
2022-12-31 4.68 5.10 4.48 9.00
2021-12-31 4.32 4.63 4.00 21.00
2020-12-31 3.88 4.09 3.43 23.00
2020-03-28
NasdaqGS:CTSH Past Financials Data
Date (Data in USD Millions) EPS *
2019-12-31 3.30
2019-09-30 3.70
2019-06-30 3.62
2019-03-31 3.50
2018-12-31 3.61
2018-09-30 2.45
2018-06-30 2.47
2018-03-31 2.49
2017-12-31 2.54
2017-09-30 3.24
2017-06-30 3.13
2017-03-31 2.75

*GAAP earnings excluding extraordinary items.

Performance in 3 years
In the same way as past performance we look at the future estimated return (profit) compared to the available funds. We do this looking forward 3 years.
  • Cognizant Technology Solutions is not expected to efficiently use shareholders’ funds in the future (Return on Equity less than 20%).
X
Future performance checks
We assess Cognizant Technology Solutions's future performance by looking at:
  1. Is the annual earnings growth rate expected to beat the low risk savings rate, plus a premium to keep pace with inflation?
  2. Is the annual earnings growth rate expected to beat the average growth rate in earnings of the United States of America market? (1 check)
  3. Is the annual revenue growth rate expected to beat the average growth rate in revenue of the United States of America market? (1 check)
  4. Is the annual earnings growth rate expected to be above 20%? (1 check)
  5. Is the annual revenue growth rate expected to be above 20%? (1 check)
  6. Is the Return on Equity in 3 years expected to be over 20%? (1 check)
Some of the above checks will fail if the company is expected to be loss making in the relevant year.
Cognizant Technology Solutions has a total score of 1/6, see the detailed checks below.

Note 1: We use GAAP Net Income Excluding Exceptional Items for our Earnings in all our calculations.

Full details on the Future part of the Simply Wall St company analysis model.

CTSH Past Performance

  How has Cognizant Technology Solutions performed over the past 5 years?

The past performance of a company can be measured by how much growth it has experienced and how much profit it makes relative to the funds and assets it has available.
Past earnings growth
Below we compare Cognizant Technology Solutions's growth in the last year to its industry (IT).
Past Earnings growth analysis
We also check if the company has grown in the past 5 years, and whether it has maintained that growth in the year.
  • Cognizant Technology Solutions's year on year earnings growth rate has been positive over the past 5 years.
  • Cognizant Technology Solutions's 1-year earnings growth is negative, it can't be compared to the 5-year average.
  • Cognizant Technology Solutions's 1-year earnings growth is negative, it can't be compared to the US IT industry average.
Earnings and Revenue History
Cognizant Technology Solutions's revenue and profit over the past 5 years is shown below, any years where they have experienced a loss will show up in red.
Raw Data

All data from Cognizant Technology Solutions Company Filings, last reported 2 months ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

NasdaqGS:CTSH Past Revenue, Cash Flow and Net Income Data
Date (Data in USD Millions) Revenue Net Income * G+A Expenses R&D Expenses
2019-12-31 16,783.00 1,842.00 2,855.00
2019-09-30 16,628.00 2,095.00 3,065.00
2019-06-30 16,458.00 2,075.00 3,082.00
2019-03-31 16,323.00 2,022.00 3,168.00
2018-12-31 16,125.00 2,101.00 3,007.00
2018-09-30 15,824.00 1,435.00 2,935.00
2018-06-30 15,512.00 1,453.00 2,867.00
2018-03-31 15,176.00 1,467.00 2,732.00
2017-12-31 14,810.00 1,504.00 2,697.00
2017-09-30 14,444.00 1,938.00 2,703.00
2017-06-30 14,131.00 1,887.00 2,749.00
2017-03-31 13,831.00 1,669.00 2,733.00
2016-12-31 13,487.00 1,553.00 2,731.00
2016-09-30 13,257.50 1,560.80 2,660.10
2016-06-30 12,991.50 1,514.00 2,586.20
2016-03-31 12,706.60 1,682.10 2,544.20
2015-12-31 12,416.00 1,624.00 2,509.00
2015-09-30 11,925.70 1,563.10 2,412.50
2015-06-30 11,319.80 1,521.50 2,291.50
2015-03-31 10,751.80 1,473.30 2,162.40
2014-12-31 10,263.00 1,439.00 2,037.00
2014-09-30 9,875.99 1,400.73 1,924.90
2014-06-30 9,600.61 1,364.76 1,862.18
2014-03-31 9,244.75 1,293.27 1,799.81
2013-12-31 8,843.20 1,228.60 1,727.60
2013-09-30 8,435.92 1,183.03 1,678.85
2013-06-30 8,021.88 1,140.30 1,620.43
2013-03-31 7,655.86 1,091.82 1,596.67

*GAAP earnings excluding extraordinary items.

Performance last year
We want to ensure a company is making the most of what it has available. This is done by comparing the return (profit) to a company's available funds, assets and capital.
  • Cognizant Technology Solutions has not efficiently used shareholders’ funds last year (Return on Equity less than 20%).
  • Cognizant Technology Solutions used its assets more efficiently than the US IT industry average last year based on Return on Assets.
  • Cognizant Technology Solutions has improved its use of capital last year versus 3 years ago (Return on Capital Employed).
X
Past performance checks
We assess Cognizant Technology Solutions's performance over the past 5 years by checking for:
  1. Has earnings increased in past 5 years? (1 check)
  2. Has the earnings growth in the last year exceeded that of the IT industry? (1 check)
  3. Is the recent earnings growth over the last year higher than the average annual growth over the past 5 years? (1 check)
  4. Is the Return on Equity (ROE) higher than 20%? (1 check)
  5. Is the Return on Assets (ROA) above industry average? (1 check)
  6. Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent earnings report. Some checks require at least 3 or 5 years worth of data.
Cognizant Technology Solutions has a total score of 3/6, see the detailed checks below.

Note: We use GAAP Net Income excluding extraordinary items in all our calculations.

Full details on the Past part of the Simply Wall St company analysis model.

CTSH Health

 How is Cognizant Technology Solutions's financial health and their level of debt?

A company's financial position is much like your own financial position, it includes everything you own (assets) and owe (liabilities).

The boxes below represent the relative size of what makes up Cognizant Technology Solutions's finances.

The net worth of a company is the difference between its assets and liabilities.
Net Worth
  • Cognizant Technology Solutions is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
  • Cognizant Technology Solutions's cash and other short term assets cover its long term commitments.
Balance sheet
This treemap shows a more detailed breakdown of Cognizant Technology Solutions's finances. If any of them are yellow this indicates they may be out of proportion and red means they relate to one of the checks below.
Assets
Liabilities and shares
The 'shares' portion represents any funds contributed by the owners (shareholders) and any profits.
  • Low level of unsold assets.
  • Debt is covered by short term assets, assets are 10.3x debt.
Historical Debt
Nearly all companies have debt. Debt in itself isn’t bad, however if the debt is too high, or the company can’t afford to pay the interest on its debts this may have impacts in the future.

The graphic below shows equity (available funds) and debt, we ideally want to see the red area (debt) decreasing.

If there is any debt we look at the companies capability to repay it, and whether the level has increased over the past 5 years.
Raw Data

All data from Cognizant Technology Solutions Company Filings, last reported 2 months ago.

NasdaqGS:CTSH Past Debt and Equity Data
Date (Data in USD Millions) Total Equity Total Debt Cash & Short Term Investments
2019-12-31 11,022.00 738.00 3,424.00
2019-09-30 10,702.00 747.00 3,077.00
2019-06-30 10,557.00 746.00 3,003.00
2019-03-31 11,136.00 746.00 3,668.00
2018-12-31 11,424.00 745.00 4,511.00
2018-09-30 10,978.00 724.00 4,763.00
2018-06-30 10,648.00 749.00 4,247.00
2018-03-31 10,988.00 773.00 4,830.00
2017-12-31 10,669.00 873.00 5,056.00
2017-09-30 10,979.00 823.00 4,713.00
2017-06-30 10,483.00 991.00 4,378.00
2017-03-31 9,983.00 1,209.00 4,274.00
2016-12-31 10,728.00 878.00 5,169.00
2016-09-30 10,292.30 896.60 4,858.60
2016-06-30 9,862.90 908.80 4,481.20
2016-03-31 9,612.30 1,020.90 4,451.70
2015-12-31 9,278.00 1,283.00 4,949.00
2015-09-30 8,827.00 950.00 4,050.70
2015-06-30 8,540.80 1,062.50 3,566.50
2015-03-31 8,178.50 1,075.00 3,349.80
2014-12-31 7,740.20 1,637.50 3,774.70
2014-09-30 7,381.71 0.00 4,618.48
2014-06-30 6,990.83 0.00 4,129.22
2014-03-31 6,622.96 0.00 3,864.98
2013-12-31 6,135.79 0.00 3,747.47
2013-09-30 5,648.28 0.00 3,360.60
2013-06-30 5,323.75 0.00 2,900.57
2013-03-31 5,215.93 0.00 2,744.45
  • Cognizant Technology Solutions's level of debt (6.7%) compared to net worth is satisfactory (less than 40%).
  • The level of debt compared to net worth has been reduced over the past 5 years (21.1% vs 6.7% today).
  • Debt is well covered by operating cash flow (338.6%, greater than 20% of total debt).
  • Cognizant Technology Solutions earns more interest than it pays, coverage of interest payments is not a concern.
X
Financial health checks
We assess Cognizant Technology Solutions's financial health by checking for:
  1. Are short term assets greater than short term liabilities? (1 check)
  2. Are short term assets greater than long term liabilities? (1 check)
  3. Has the debt to equity ratio increased in the past 5 years? (1 check)
  4. Is the debt to equity ratio over 40%? (1 check)
  5. Is the debt covered by operating cash flow? (1 check)
  6. Are earnings greater than 5x the interest on debt (if company pays interest at all)? (1 check)
  7. Cognizant Technology Solutions has a total score of 6/6, see the detailed checks below.
For companies that are loss making and have been so on average in the past we replace the last 2 checks with:
  1. Does cash and short term investments cover stable operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)
  2. Does cash and short term investments cover growing operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)


Full details on the Health part of the Simply Wall St company analysis model.

CTSH Dividends

 What is Cognizant Technology Solutions's current dividend yield, its reliability and sustainability?

Dividends are regular cash payments to you from the company, similar to a bank paying you interest on a savings account.
Annual Dividend Income
Dividend payments
1.89%
Current annual income from Cognizant Technology Solutions dividends. Estimated to be 2.33% next year.
If you bought $2,000 of Cognizant Technology Solutions shares you are expected to receive $38 in your first year as a dividend.
Dividend Amount
Here we look how much dividend is being paid, if any. Is it above what you can get in a savings account? It is up there with the best dividend paying companies?
  • Cognizant Technology Solutions's pays a lower dividend yield than the bottom 25% of dividend payers in United States of America (1.98%).
  • Cognizant Technology Solutions's dividend is below the markets top 25% of dividend payers in United States of America (5.45%).
Annualized Historical and Future Dividends
It is important to see if the dividend for a company is stable, and not wildly increasing/decreasing each year. This graph shows you the historical rate to count toward your assessment of the stock.

We also check to see if the dividend has increased in the past 10 years.
Raw Data
NasdaqGS:CTSH Annualized Past and Future Dividends
Data Point Source Value
Past Annualized Dividend Yield S&P Global Market Data See Below
Past Dividends per Share Company Filings/ Annualized Dividend Payments See Below
Future Dividends per Share Estimates Average of up to 30 Analyst Estimates (S&P Global) See Below
United States of America IT Industry Average Dividend Yield Market Cap Weighted Average of 35 Stocks 1.6%
United States of America Market Average Dividend Yield Market Cap Weighted Average of 1949 Stocks 3%
United States of America Minimum Threshold Dividend Yield 10th Percentile 1.1%
United States of America Bottom 25% Dividend Yield 25th Percentile 2%
United States of America Top 25% Dividend Yield 75th Percentile 5.4%

Industry and Market average data is calculated daily.

Note all dividend per share amounts are annualized and not quarterly or other period.

NasdaqGS:CTSH Future Dividends Estimate Data
Date (Data in $) Dividend per Share (annual) Avg. No. Analysts
2024-12-31 2.89 1.00
2023-12-31 2.80 1.00
2022-12-31 1.31 7.00
2021-12-31 0.94 14.00
2020-12-31 0.87 14.00
2020-03-28
NasdaqGS:CTSH Past Annualized Dividends Data
Date (Data in $) Dividend per share (annual) Avg. Yield (%)
2020-02-14 0.880 1.598
2020-02-05 0.880 1.276
2019-10-31 0.800 1.283
2019-10-30 0.800 1.324
2019-08-01 0.800 1.301
2019-07-31 0.800 1.216
2019-05-03 0.800 1.277
2019-05-02 0.800 1.276
2019-02-19 0.800 1.107
2019-02-06 0.800 1.090
2018-08-02 0.800 1.128
2018-05-07 0.800 1.018
2018-02-27 0.800 0.980
2018-02-07 0.800 1.002
2017-11-01 0.600 0.815
2017-08-03 0.600 0.832
2017-05-05 0.600 0.895

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Whilst dividend payments have been stable, Cognizant Technology Solutions has been paying a dividend for less than 10 years.
  • Dividend payments have increased, but Cognizant Technology Solutions only paid a dividend in the past 3 years.
Current Payout to shareholders
What portion of Cognizant Technology Solutions's earnings are paid to the shareholders as a dividend.
  • Dividends paid are well covered by earnings (4.1x coverage).
Future Payout to shareholders
  • Dividends after 3 years are expected to be well covered by earnings (3.6x coverage).
X
Income/ dividend checks
We assess Cognizant Technology Solutions's dividend by checking for:
  1. Firstly is the company paying a notable dividend (greater than 1.1%) - if not then the rest of the checks are ignored.
  2. Is current dividend yield above the bottom 25% of dividend payers? (1 check)
  3. Is current dividend yield above the top 25% of dividend payers? (1 check)
  4. Have they paid a dividend for 10 years, and during this period has the dividend been volatile (drop of more than 25%)? (1 check)
  5. If they have paid a dividend for 10 years has it increased in this time? (1 check)
  6. How sustainable is the dividend, can Cognizant Technology Solutions afford to pay it from its earnings today and in 3 years (Payout ratio less than 90%)? (2 checks)
  7. Cognizant Technology Solutions has a total score of 2/6, see the detailed checks below.


Full details on the Dividends part of the Simply Wall St company analysis model.

CTSH Management

 What is the CEO of Cognizant Technology Solutions's salary, the management and board of directors tenure and is there insider trading?

Management is one of the most important areas of a company. We look at unreasonable CEO compensation, how long the team and board of directors have been around for and insider trading.
CEO
Brian Humphries
AGE 45
TENURE AS CEO 0.9 years
CEO Bio

Mr. Brian Humphries has been Chief Executive Officer and Director of Cognizant Technology Solutions Corporation since April 1, 2019. Mr. Humphries served as the Chief Executive Officer of Vodafone Business at Vodafone Group Plc (Vodafone UK) from December 2018 to March 31, 2019 and had been its Group Enterprise Director from February 1, 2017 to December 2018. Mr. Humphries has over 14 years of experience. He served as President and Chief Operating Officer of Infrastructure Solutions Group with Dell EMC. He served as Vice President and General Manager of Dell's Enterprise Solutions Group for Europe, Middle-East and Africa. He served as Senior Vice President of Growth Markets Organization/Emerging Markets at Hewlett-Packard Co. from March 30, 2011 to 2013. He led a team responsible for creating specialized go-to-market strategies, technology solutions and customer, partner and public sector relationships that meet the unique needs of rapidly developing markets. He served as Senior Vice President of strategy and Corporate Development at Hewlett-Packard from June 2008 to March 30, 2011. Mr. Humphries served as Vice President of Investor Relations of Hewlett-Packard since July 2004. He served as the President of Enterprise Solutions at Dell-EMC from 2013 to 2017. From August 2003 to June 2004, Mr. Humphries served as Director of Financial Communications at Hewlett-Packard. He was Chief of Staff to the Chairman and Chief Executive at Hewlett-Packard. He served as Chief Financial Officer with HP Services. He began his career with Compaq and Digital Equipment Corporation. Mr. Humphries manages and leads Vodafone’s growing Global Enterprise business which provides total communications solutions to businesses. His responsibilities include Vodafone’s strategy and execution in the Enterprise market worldwide. He manages a portfolio which includes: Vodafone Global Enterprise, Vodafone Carrier Services, Internet of Things and Cloud & Security. From May 2002 to July 2003, Mr. Humphries served as Director of Finance of Industry Standard Servers business. He served as Compaq's Director of Investor Relations from May 1999 to May 2002. He holds BA from University of Ulster, Northern Ireland.

CEO Compensation
  • Insufficient data for Brian to compare compensation growth.
  • Insufficient data for Brian to establish whether their remuneration is reasonable compared to companies of similar size in United States of America.
Management Team Tenure

Average tenure and age of the Cognizant Technology Solutions management team in years:

3.2
Average Tenure
52
Average Age
  • The tenure for the Cognizant Technology Solutions management team is about average.
Management Team

Karen McLoughlin

TITLE
Chief Financial Officer
COMPENSATION
$6M
AGE
54
TENURE
8.1 yrs

Malcolm Frank

TITLE
Executive VP & President of Cognizant Digital Business
COMPENSATION
$5M
AGE
52
TENURE
0.8 yrs

Dharmendra Sinha

TITLE
Executive VP & President of North America
COMPENSATION
$3M
AGE
56
TENURE
6.3 yrs

Brian Humphries

TITLE
CEO & Director
AGE
45
TENURE
0.9 yrs

Srinivasan Veeraraghavachary

TITLE
Executive VP & Chief Operating Officer
AGE
59
TENURE
3.6 yrs

Rob Telesmanic

TITLE
Senior VP
AGE
52
TENURE
3.2 yrs

Katie Royce

TITLE
Global Head of Investor Relations

Matt Friedrich

TITLE
Executive VP
COMPENSATION
$7M
AGE
52
TENURE
2.8 yrs

Rick Lacroix

TITLE
Vice President of Corporate Communications

Larry Bridge

TITLE
Senior VP of Healthcare Strategy & Corporate Development
Board of Directors Tenure

Average tenure and age of the Cognizant Technology Solutions board of directors in years:

2.6
Average Tenure
60.5
Average Age
  • The average tenure for the Cognizant Technology Solutions board of directors is less than 3 years, this suggests a new board.
Board of Directors

Michael Patsalos-Fox

TITLE
Independent Chairman
COMPENSATION
$443K
AGE
66
TENURE
1.5 yrs

Brian Humphries

TITLE
CEO & Director
AGE
45
TENURE
0.9 yrs

Frank D'Souza

TITLE
Executive Vice Chairman
COMPENSATION
$14M
AGE
50
TENURE
1.8 yrs

John Fox

TITLE
Independent Director
COMPENSATION
$331K
AGE
76
TENURE
12.3 yrs

Maureen Breakiron-Evans

TITLE
Independent Director
COMPENSATION
$344K
AGE
64
TENURE
10.8 yrs

Zein Abdalla

TITLE
Independent Director
COMPENSATION
$327K
AGE
60
TENURE
4.5 yrs

John Dineen

TITLE
Independent Director
COMPENSATION
$324K
AGE
56
TENURE
2.9 yrs

Leo Mackay

TITLE
Independent Director
COMPENSATION
$312K
AGE
57
TENURE
7.5 yrs

Joe Velli

TITLE
Independent Director
COMPENSATION
$312K
AGE
61
TENURE
2.3 yrs

Sandra Wijnberg

TITLE
Independent Director
AGE
63
TENURE
0.7 yrs
Who owns this company?
Recent Insider Trading
  • No 3 month open market individual insider trading information.
Recent Insider Transactions
Announced Type Name Entity Role Start End Shares Max Price ($) Value ($)
24. May 19 Buy Brian Humphries Individual 23. May 19 23. May 19 19,000 $61.09 $1,160,742
X
Management checks
We assess Cognizant Technology Solutions's management by checking for:
  1. Is the CEO's compensation unreasonable compared to market cap? (1 check)
  2. Has the CEO's compensation increased more than 20% whilst the EPS is down more then 20%? (1 check)
  3. Is the average tenure of the management team less than 2 years? (1 check)
  4. Is the average tenure of the board of directors team less than 3 years? (1 check)
  5. Cognizant Technology Solutions has a total score of 0/6, this is not included on the snowflake, see the detailed checks below.


Note: We use the top 6 management executives and board members in our calculations.

Note 2: Insider trading include any internal stakeholders and these transactions .

Full details on the Management part of the Simply Wall St company analysis model.

CTSH News

Simply Wall St News

Did Cognizant Technology Solutions's (NASDAQ:CTSH) Share Price Deserve to Gain 36%?

Unfortunately for shareholders, while the Cognizant Technology Solutions Corporation (NASDAQ:CTSH) share price is up 36% in the last five years, that's less than the market return. … During five years of share price growth, Cognizant Technology Solutions achieved compound earnings per share (EPS) growth of 10.0% per year. … As it happens, Cognizant Technology Solutions's TSR for the last 5 years was 39%, which exceeds the share price return mentioned earlier.

Simply Wall St -

Cognizant Technology Solutions Corporation (NASDAQ:CTSH) Earns A Nice Return On Capital Employed

Analysts use this formula to calculate return on capital employed: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) Or for Cognizant Technology Solutions: 0.21 = US$2.7b ÷ (US$16b - US$2.8b) (Based on the trailing twelve months to June 2019.) So, Cognizant Technology Solutions has an ROCE of 21%. … Cognizant Technology Solutions's Current Liabilities And Their Impact On Its ROCE Liabilities, such as supplier bills and bank overdrafts, are referred to as current liabilities if they need to be paid within 12 months. … What We Can Learn From Cognizant Technology Solutions's ROCE This is good to see, and with such a high ROCE, Cognizant Technology Solutions may be worth a closer look.

Simply Wall St -

Cognizant Technology Solutions Corporation (NASDAQ:CTSH) Passed Our Checks, And It's About To Pay A 0.3% Dividend

Cognizant Technology Solutions's next dividend payment will be US$0.20 per share, on the back of last year when the company paid a total of US$0.80 to shareholders. … As a result, readers should always check whether Cognizant Technology Solutions has been able to grow its dividends, or if the dividend might be cut. … Companies with consistently growing earnings per share generally make the best dividend stocks, as they usually find it easier to grow dividends per share.

Simply Wall St -

Is Cognizant Technology Solutions Corporation's (NASDAQ:CTSH) P/E Ratio Really That Good?

View our latest analysis for Cognizant Technology Solutions How Do I Calculate Cognizant Technology Solutions's Price To Earnings Ratio? … The formula for price to earnings is: Price to Earnings Ratio = Share Price ÷ Earnings per Share (EPS) Or for Cognizant Technology Solutions: P/E of 18.89 = $66.04 ÷ $3.5 (Based on the year to March 2019.) Is A High Price-to-Earnings Ratio Good? … So at a glance we're a bit surprised that Cognizant Technology Solutions does not have a higher P/E ratio.

Simply Wall St -

A Closer Look At Cognizant Technology Solutions Corporation's (NASDAQ:CTSH) Impressive ROE

The formula for ROE is: Return on Equity = Net Profit ÷ Shareholders' Equity Or for Cognizant Technology Solutions: 18% = US$2.0b ÷ US$11b (Based on the trailing twelve months to March 2019.) Most readers would understand what net profit is, but it’s worth explaining the concept of shareholders’ equity. … Does Cognizant Technology Solutions Have A Good Return On Equity? … Combining Cognizant Technology Solutions's Debt And Its 18% Return On Equity While Cognizant Technology Solutions does have a tiny amount of debt, with debt to equity of just 0.07, we think the use of debt is very modest.

Simply Wall St -

Does Cognizant Technology Solutions (NASDAQ:CTSH) Deserve A Spot On Your Watchlist?

If, on the other hand, you like companies that have revenue, and even earn profits, then you may well be interested in Cognizant Technology Solutions (NASDAQ:CTSH). … We would not expect to see insiders owning a large percentage of a US$36b company like Cognizant Technology Solutions. … As I already mentioned, Cognizant Technology Solutions is a growing business, which is what I like to see.

Simply Wall St -

A Look At The Fair Value Of Cognizant Technology Solutions Corporation (NASDAQ:CTSH)

Today we'll do a simple run through of a valuation method used to estimate the attractiveness of Cognizant Technology Solutions Corporation (NASDAQ:CTSH) as an investment opportunity by taking the foreast future cash flows of the company and discounting them back to today's value. … Generally we assume that a dollar today is more valuable than a dollar in the future, so we discount the value of these future cash flows to their estimated value in today's dollars: 10-year free cash flow (FCF) estimate 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Levered FCF ($, Millions) $2.22k $2.37k $2.57k $2.72k $2.85k $2.98k $3.09k $3.20k $3.30k $3.40k Growth Rate Estimate Source Analyst x5 Analyst x7 Analyst x3 Est @ 5.82% Est @ 4.89% Est @ 4.25% Est @ 3.79% Est @ 3.47% Est @ 3.25% Est @ 3.09% Present Value ($, Millions) Discounted @ 8.87% $2.04k $2.00k $1.99k $1.94k $1.87k $1.79k $1.70k $1.62k $1.54k $1.45k Present Value of 10-year Cash Flow (PVCF)= $17.93b "Est" = FCF growth rate estimated by Simply Wall St After calculating the present value of future cash flows in the intial 10-year period, we need to calculate the Terminal Value, which accounts for all future cash flows beyond the first stage. … NasdaqGS:CTSH Intrinsic value, June 10th 2019 Important assumptions Now the most important inputs to a discounted cash flow are the discount rate, and of course, the actual cash flows.

Simply Wall St -

Does Cognizant Technology Solutions's (NASDAQ:CTSH) Share Price Gain of 27% Match Its Business Performance?

Cognizant Technology Solutions Corporation (NASDAQ:CTSH) shareholders might be concerned after seeing the share price drop 15% in the last month. … During five years of share price growth, Cognizant Technology Solutions achieved compound earnings per share (EPS) growth of 10% per year. … As it happens, Cognizant Technology Solutions's TSR for the last 5 years was 30%, which exceeds the share price return mentioned earlier.

Simply Wall St -

Why Cognizant Technology Solutions Corporation (NASDAQ:CTSH) Is An Attractive Investment To Consider

Excellent balance sheet and good value In the previous year, CTSH has ramped up its bottom line by 38%, with its latest earnings level surpassing its average level over the last five years. … Investors have the opportunity to buy into the stock to reap capital gains, if CTSH's projected earnings trajectory does follow analyst consensus growth, which determines my intrinsic value of the company. … NasdaqGS:CTSH Intrinsic value, May 16th 2019 Next Steps: For Cognizant Technology Solutions, I've compiled three pertinent aspects you should further examine: Future Outlook: What are well-informed industry analysts predicting for CTSH’s future growth?

Simply Wall St -

Is Cognizant Technology Solutions Corporation's (NASDAQ:CTSH) ROE Of 18% Impressive?

By way of learning-by-doing, we'll look at ROE to gain a better understanding of Cognizant Technology Solutions Corporation (NASDAQ:CTSH). … Our data shows Cognizant Technology Solutions has a return on equity of 18% for the last year. … Return on Equity = Net Profit ÷ Shareholders' Equity

Simply Wall St -

CTSH Company Info

Description

Cognizant Technology Solutions Corporation, a professional services company, provides consulting and technology, and outsourcing services worldwide. The company operates through four segments: Financial Services; Healthcare; Products and Resources; and Communications, Media and Technology. It offers analytics and artificial intelligence, digital engineering, intelligent process automation, interactive, and hybrid cloud services and solutions; and application development, systems integration, application testing and maintenance, infrastructure, and business process services. The company also develops, licenses, implements, and supports proprietary and third-party software products and platforms for the healthcare industry. In addition, it offers revenue cycle management solutions to the healthcare industry; business advisory and data analytics services; and salesforce services. Further, the company develops custom cloud-based software and platforms; and provides consulting services that enable companies to plan, implement, and optimize automated cloud-based business processes and technologies. It serves banking and insurance, healthcare and life sciences, retail and consumer goods, manufacturing and logistics, travel and hospitality, energy and utilities, communications and media, and technology industries. The company markets and sells its services through professional staff, senior management, and direct sales personnel. Cognizant Technology Solutions Corporation was founded in 1994 and is headquartered in Teaneck, New Jersey.

Details
Name: Cognizant Technology Solutions Corporation
CTSH
Exchange: NasdaqGS
Founded: 1994
$25,599,407,365
548,637,106
Website: http://www.cognizant.com
Address: Cognizant Technology Solutions Corporation
Glenpointe Centre West,
500 Frank West Burr Boulevard,
Teaneck,
New Jersey, 07666,
United States
Listings
Exchange Symbol Ticker Symbol Security Exchange Country Currency Listed on
NasdaqGS CTSH Class A Common Stock Nasdaq Global Select US USD 19. Jun 1998
DB COZ Class A Common Stock Deutsche Boerse AG DE EUR 19. Jun 1998
XTRA COZ Class A Common Stock XETRA Trading Platform DE EUR 19. Jun 1998
LSE 0QZ5 Class A Common Stock London Stock Exchange GB USD 19. Jun 1998
SWX CTSH Class A Common Stock SIX Swiss Exchange CH CHF 19. Jun 1998
WBAG CTSH Class A Common Stock Wiener Boerse AG AT EUR 19. Jun 1998
BMV CTSH * Class A Common Stock Bolsa Mexicana de Valores MX MXN 19. Jun 1998
ETLX COZ Class A Common Stock Eurotlx IT EUR 19. Jun 1998
BOVESPA CTSH34 BDR EA REP 1 COM CL'A' USD0.01 Bolsa de Valores de Sao Paulo BR BRL 25. Apr 2016
Number of employees
Current staff
Staff numbers
292,500
Cognizant Technology Solutions employees.
Industry
IT Consulting and Other Services
Software
Company Analysis and Financial Data Status
Area Date (UTC time)
Company Analysis updated: 2020/03/28 23:53
End of day share price update: 2020/03/27 00:00
Last estimates confirmation: 2020/03/27
Last earnings filing: 2020/02/14
Last earnings reported: 2019/12/31
Last annual earnings reported: 2019/12/31


All dates and times in UTC. All financial data provided by Standard & Poor’s Capital IQ.

Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.