Cognizant Technology Solutions Corp
CTSH
Services-Computer Programming Services
Mkt Cap
$36.06BPE
17.26Debt
$647MCash
$2.204BEV
$34.51BFCF
$1.966BP/E Ratio
17.26Debt
$647MCash
$2.204BEV
$34.51BFCF
$1.966BCognizant Technology Solutions Corporation, a professional services company, provides consulting and technology, and outsourcing services in North America, Europe, and internationally. It operates through four segments: Financial Services; Health Sciences; Products and Resources; and Communications, Media and Technology. The company offers customer experience enhancement, robotic process automation, analytics, and AI services in areas, such as digital lending, fraud detection, and next generation payments; the shift towards consumerism, outcome-based contracting, digital health, delivering integrated seamless, omni-channel, and patient-centered experience; and services that drive operational improvements in areas, such as clinical development, pharmacovigilance, and manufacturing, as well as claims processing, enrollment, membership, and billing to healthcare providers and payers, and life sciences companies, including pharmaceutical, biotech, and medical device companies. It also provides solution to manufacturers, automakers, retailers and travel and hospitality companies, as well as companies providing logistics, energy and utility services; and digital content, the creation of personalized user experience, and acceleration of digital engineering services to communications, media and entertainment, education, and information services and technology companies. The company was founded in 1994 and is headquartered in Teaneck, New Jersey.
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DCF
Discounted Cash Flow Valuation of Cognizant Technology Solutions Corp
Value
Growth
%
%
Discount
%
%
Multiple
| g\r | +10% | +11% | +12% | +13% | +14% |
|---|---|---|---|---|---|
| 0% | 10 | 9 | 8 | 8 | 7 |
| +1% | 11 | 10 | 9 | 8 | 8 |
| +2% | 13 | 11 | 10 | 9 | 8 |
| +3% | 14 | 13 | 11 | 10 | 9 |
| +4% | 17 | 14 | 12 | 11 | 10 |
| Years | 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | TV |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| FCF | $1.966B | $2.102B | $2.244B | $2.389B | $2.54B | $2.694B | $2.852B | $3.013B | $3.176B | $3.342B | $3.509B | $35.09B |
| DCF | $1.828B | $1.696B | $1.571B | $1.452B | $1.339B | $1.233B | $1.133B | $1.038B | $950M | $867.4M | $8.674B | |
| Value | $21.78B | |||||||||||
In the chart Earnings are multiplied by this value.
Earnings Growth 4.3%
Earnings Stability 43%
Competitiveness and MOAT
High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.
| Years | 12-2014 | 12-2015 | 12-2016 | 12-2017 | 12-2018 | 12-2019 | 12-2020 | 12-2021 | 12-2022 | TTM |
|---|---|---|---|---|---|---|---|---|---|---|
| Net Margin | 14% | 13% | 12% | 10% | 13% | 11% | 8.4% | 12% | 12% | 11% |
| ROA | 16% | 17% | 17% | 18% | 18% | 16% | 13% | 16% | 17% | 15% |
| ROE | 19% | 17% | 14% | 14% | 18% | 17% | 13% | 18% | 19% | 16% |
What is the average Net Margin?
The average Net Margin over the past 5 years is +10.98%.
What is the trend of Net Margin?
The trend of Net Margin over the past 5 years is +0.03%.
What is the average Return on Assets (ROA)?
The average ROA over the past 5 years is +16.1%.
What is the trend of Return on Assets (ROA)?
The trend of ROA over the past 5 years is -0.34%.
What is the average Return on Equity (ROE)?
The average ROE over the past 5 years is +16.41%.
What is the trend of Return on Equity (ROE)?
The trend of ROE over the past 5 years is +0.48%.
Safety & Stabiliy
Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.
| Years | 12-2014 | 12-2015 | 12-2016 | 12-2017 | 12-2018 | 12-2019 | 12-2020 | 12-2021 | 12-2022 | TTM |
|---|---|---|---|---|---|---|---|---|---|---|
| Debt FCF | 1.34 | 0.71 | 0.73 | 0.46 | 0.34 | 0.35 | 0.24 | 0.30 | 0.29 | 0.33 |
| Debt Equity | 0.22 | 0.14 | 0.09 | 0.09 | 0.07 | 0.07 | 0.06 | 0.06 | 0.05 | 0.05 |
| MIN | ||||||||||
| Graham Stability | - | - | 100% | 98% | 100% | 100% | 77% | 100% | 100% | 77% |
What is the Debt/FCF?
The Debt/FCF trailing twelve month is 0.33.
What is the trend of Debt/FCF?
The trend of Debt/FCF over the past 5 years is -0.03.
What is the Graham’s Stability?
Graham’s Stability measure stands at 0.77.
Growth
Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.
| Years | 12-2015 | 12-2017 | 12-2019 | 12-2021 | Trend |
|---|---|---|---|---|---|
| Revenue | 6.6% | 5.6% | 5% | 5% | -1.6% |
| Net Income | 5% | 8.8% | 7.5% | 7.2% | 0.55% |
| Stockholders Equity | 4.1% | 2.9% | 3.7% | 2.7% | -2.7% |
| FCF | 2.5% | 1% | 2% | 0.9% | -3% |
What is the 5 year Revenue CAGR?
The Revenue CAGR over the past 5 years is +5.58%.
What is the trend of Revenue growth?
The trend of Revenue growth rate over the past 5 years is -1.64%.
What is the 5 year Earnings CAGR?
The Earnings CAGR over the past 5 years is +8.77%.
What is the trend of Earnings growth?
The trend of Earnings growth rate over the past 5 years is +0.55%.
What is the 5 year Equity CAGR?
The Equity CAGR over the past 5 years is +2.9%.
What is the trend of Equity growth?
The trend of Equity growth rate over the past 5 years is -2.65%.
What is the 5 year FCF CAGR?
The FCF CAGR over the past 5 years is +1.04%.
What is the trend of FCF growth?
The trend of FCF growth rate over the past 5 years is -2.99%.