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Cognizant Technology Solutions Corp Class A CTSH

Morningstar Rating
$75.09 −0.24 (0.32%)
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Company Report

Cognizant’s Strong Customer Relationships Fortify Its Narrow Economic Moat

Cognizant is one of the leading IT services providers in the world and was known as a growth darling for its revenue growth of 20%-40% during 2010-15. While we don't see Cognizant returning to that level of growth in the future, reacceleration in growth is not farfetched. We think Cognizant can deliver this via thoughtful investment in enhancing technical capabilities, more robust strategy consulting operations, and a more diversified client base. With such a focus, we think Cognizant has the potential to strengthen its already moaty business, which benefits from significant switching costs and intangible assets based in its technical expertise.

Price vs Fair Value

CTSH is trading at a 20% discount.
Price
$75.07
Fair Value
$79.00
Uncertainty
Medium
1-Star Price
$993.30
5-Star Price
$53.40
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
$75.33
Day Range
$75.0176.07
52-Week Range
$57.2480.09
Bid/Ask
$74.27 / $75.02
Market Cap
$37.38 Bil
Volume/Avg
11.5 Mil / 4.1 Mil

Key Statistics

Price/Earnings (Normalized)
16.50
Price/Sales
1.96
Dividend Yield (Trailing)
1.56%
Dividend Yield (Forward)
1.60%
Total Yield
4.41%

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)
16.5031.4227.00
Price/Book Value
2.839.698.25
Price/Sales
1.963.684.28
Price/Cash Flow
15.0521.9920.80
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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