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Cognizant Technology Solutions Corp Class A CTSH

Morningstar Rating
$79.08 +0.47 (0.60%)
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Company Report

Cognizant Earnings: Firm Focuses on Profitability as Top-Line Expansion Slows

We are maintaining our $94 fair value estimate for Cognizant after the firm reported strong financial results to close out fiscal 2023. The upward impact of these results on our fair value estimate was offset by the weaker-than-expected guidance for fiscal 2024. All considered, we continue to view Cognizant as materially undervalued and think that the market is allowing near-term discretionary weakness to factor into longer-term discretionary spending expectations. We expect discretionary spending to rebound as macroeconomic weakness dissipates, which we believe will enable Cognizant to rejuvenate its top-line growth.

Price vs Fair Value

CTSH is trading within a range we consider fairly valued.
Price
$79.08
Fair Value
$24.00
Uncertainty
Medium
1-Star Price
$653.20
5-Star Price
$45.30
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Enterprises' spending with Cognizant should increase as the enterprise technical landscape gets more and more difficult to navigate and increasingly important in staying competitive.

Bears

Cognizant’s growth could become increasingly limited, given its vertical specialization and ongoing consolidation.

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News

Trading Information

Previous Close Price
$78.61
Day Range
$78.4879.68
52-Week Range
$56.4580.09
Bid/Ask
$78.00 / $79.40
Market Cap
$39.37 Bil
Volume/Avg
7.4 Mil / 3.9 Mil

Key Statistics

Price/Earnings (Normalized)
17.38
Price/Sales
2.06
Dividend Yield (Trailing)
1.48%
Dividend Yield (Forward)
1.52%
Total Yield
4.18%

Company Profile

Cognizant is a global IT services provider, offering consulting and outsourcing services to some of the world’s largest enterprises spanning the financial services, media and communications, healthcare, natural resources, and consumer products industries. Cognizant employs nearly 300,000 people globally, roughly 70% of whom are in India, although the company’s headquarters are in Teaneck, New Jersey.
Sector
Technology
Industry
Information Technology Services
Stock Style Box
Mid Core
Total Number of Employees
347,700

Competitors

Valuation

Metric
CTSH
ACN
INFY
Price/Earnings (Normalized)
17.3832.3527.89
Price/Book Value
2.989.978.52
Price/Sales
2.063.794.43
Price/Cash Flow
15.8522.6421.48
Price/Earnings
CTSH
ACN
INFY

Financial Strength

Metric
CTSH
ACN
INFY
Quick Ratio
1.951.181.68
Current Ratio
2.251.331.99
Interest Coverage
65.90162.06
Quick Ratio
CTSH
ACN
INFY

Profitability

Metric
CTSH
ACN
INFY
Return on Assets (Normalized)
13.44%17.12%19.14%
Return on Equity (Normalized)
19.02%37.32%32.00%
Return on Invested Capital (Normalized)
16.62%28.70%28.86%
Return on Assets
CTSH
ACN
INFY
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Name
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Economic Moat
Market Cap
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FI
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INFY
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FIS
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WIT
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GIB
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BR
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EPAM
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