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Fundamental analysis: Cognizant Technology Solutions Corporation (CTSH)

Awarener score: 7.7

Conclusion

The higher the Awarener score, the more bang you get for the buck. It measures how much genuine funds the company generates for the stock price paid (Very good), the business stability (Superb) and growth (Lacking), and the company's inclination to return cash to the stockholders (Very good).

Note: All scores range from 1 (worst) to 10 (best). Conclusions are updated daily with closing stock prices and new reported quarterly financial statements.

Revenue score: 7.0

  • Business has been slightly shrinking. It's been weak when measured against peer companies.
  • Cognizant Technology Solutions Corporation business trend is extremely stable, which is best. It looks top-notch against rivals.

Margins score: 7.7

  • CTSH profit margins -on goods and services sold- are usually sufficient. They stand somewhat better than rival companies.
  • Business profit on sales tends to be excellent. It's top tier when measured against competitors.
  • Profits on sales made -available to repay debt and purchase properties- are usually good. They remain in good shape compared to peers.
  • Earnings -before income taxes and interests on loans taken- tend to be very good in relation to total revenues. They're still better than most similar companies.
  • Profits -before income taxes- are usually very good considering total sales, and remain top tier when measured against rivals.
  • Total net profit tends to be very good when confronted to sales. Company stands great when measured against comparable firms.

Growth score: 3.7

  • Cognizant Technology Solutions Corporation profit growth -on goods and services sold- has been almost stagnant. It's been in a weak position compared to competitors.
  • In recent years, earnings growth -on operations- have been almost stagnant, which has been mediocre against comparable firms.
  • Profits growth -available to repay debt and purchase properties- have been almost stagnant, which compares weak when measured against peer enterprises.
  • Growth on earnings -before income taxes and interests on loans taken- have been almost stagnant. It turns to be in a weak position compared to similar stocks.
  • In past years, growth on profits -before income taxes- was almost stagnant. It was mediocre against rivals.
  • In the previous years, growth on total net profit has been low, and similar to peer companies.
  • Earnings per share have grown at a normal rhythm in past years. It's been rather normal in relation to industry peers.

Miscellaneous score: 3.0

  • CTSH had to pay a lot of income taxes in relation to profits made in the past years. It's been mediocre against peers.
  • The company does not report R&D expenses. It's meaningless to measure in relation to competitors.
  • We have insufficient data to estimate how effective is research and development effort. It stands unknown against rival companies.

Profitability score: 9.8

  • Cognizant Technology Solutions Corporation usually gets huge returns on the resources it controls. It proves great when measured against peer firms.
  • The company normally gets huge proceeds -on the resources directly invested in the business-. They remain excellent in relation to similar companies.
  • There's usually excellent profitability -in relation to owned resources-. It ranks more than average in relation to competitors.
  • In the past, got huge returns -on the tangible resources it controls-. This metric is usually related to the industry in which operates and combines profitability versus reinvestment needs. It's great when measured against comparable enterprises.

Usage of Funds score: 6.4

  • CTSH usually uses a portion of genuine funds generated to buy or replace property, plant, or equipment. The need for reinvestments is rather normal. It stands great when measured against rival firms.
  • The company is usually replacing some proportion of the property, plant, and equipment that gets old, saving part of the funds for something else, which is almost average when measured against industry peers.
  • In the past twelve months it paid run-of-the-mill dividends, considering the current stock price. It came slightly better than competitors.
  • Has somewhat increased dividend payments in the past years. Business prospects may have improved. The company has behaved in a weak position compared to similar firms.
  • Dividend payments usually represent a modest portion of genuine funds generation and should be reasonable safe. Sustainability looks somewhat better than comparable companies.
  • The company usually significantly reduces the pool of investors, resulting in fewer mouths feeding on the pie of profits. It remains impressive in relation to peer enterprises.
  • Repurchase effectiveness metric is very complex. Run again in analytical mode if you 're interested in a technical explanation. It stands excellent in relation to rivals.
  • The company uses a large portion of genuine fund generation to reward investors, which can probably be sustained for as long as business doesn't turn sour. It still looks below average when measured against competitors.

Balance Sheet score: 5.9

  • Cognizant Technology Solutions Corporation intangible assets (like brands and goodwill) represent a portion of resources controlled, according to accounting books. There could be difficulties in liquidating them if the company ever gets in financial distress. It happens to be similar to peer companies.
  • The company has roughly triple short-term resources than short-term obligations. Liquidity concerns are most likely unimportant. It turns to be a slight improvement compared to similar firms.
  • Roughly a tenth of resources controlled were provided for with financial debt. Creditors have minor claims on the company, and financial position is safe. It remains somewhat better than rival firms.
  • Controlled resources take time to be turned into cash and equivalents, which is somewhat risky. It looks almost average when measured against rivals.
  • For every dollar of short-term obligations, the company has more than enough dollars in cash and short-term receivables. It's a slight improvement compared to peer firms.
  • For every dollar of short-term obligations, the company has roughly another of cash and equivalents, which is somewhat better than similar enterprises.
  • Usually, sales are on somewhat less than three months credit. It still ranks almost average when measured against peers.
  • Normally has no inventories. It comes up as impressive in relation to competitors.
  • On average, it takes less than three months from the purchase to charging customers. It happens to be slightly better than peers.
  • On average pays suppliers during the first couple of weeks from the purchase. It ranks below average when measured against industry peers.
  • The company pays its suppliers roughly two months before charging its customers, so there's some money invested in working capital. It's lacking compared to similar companies.
  • Company earns net interest income on its investments and therefore is in a quite comfortable financial position. It stands top-notch against rival firms.
  • Business earnings have usually been excellent when measured against loans taken. It could take less than two years to repay the obligations with current profitability. It ranks great when measured against comparable enterprises.
  • Revenues are very good in relation to property, plant, and equipment required to operate. This metric is likely dependent on the industry the company operates in. Low property, plant, and equipment requirements allows the company to keep more money to reward stockholders in the long run. It looks lacking compared to similar firms.
  • Resource exploitation is excellent when yearly sales are considered. This metric is normally tied to the industry where the firm belongs. It's still well ranked against peer companies.

Valuation score: 6.8

  • Cognizant Technology Solutions Corporation looks reasonable in relation to profits and financial position. It happens to be great when measured against competitors.
  • Price-to-Tangible-Book-Value is a fairly complex metric. Run again in analytical mode if you're interested in a technical explanation. It remains rather normal in relation to peers.
  • In the past twelve months, the company generated some good free funds in relation to the stock price, which stands well ranked against similar companies.
  • The company usually generates much more genuine funds to cover up for its business needs. Surplus cash may be used to repay loans, to eventually buy new businesses, or to reward investors. Considering the financial position and stock price, at the current price the share might be very interesting. It's still great when measured against industry firms.
  • In the past twelve months, the company has slightly rewarded investors, considering both dividends and share on the pie of earnings. It came up a slight improvement compared to peer ventures.
  • The company has neither net debt nor net cash. It may borrow extra money if it wishes so, or start cumulating cash for future uses. It looks somewhat better than similar enterprises.
  • Considering the past twelve months, traditional Price-to-Earnings relation might be more or less reasonable, but hardly cheap. It ranks great when measured against peer companies.
  • Comparing the current stock price with the past twelve-months revenues gives a roughly two to one relationship. This is an important metric to check its evolution through time, and to compare to industry peers. It looks rather normal in relation to rival firms.
  • The relation between the stock price and accounting book value is high, which may be good or bad depending on context. Run again in analytic mode if you want to dig deeper. The company remains slightly better than peer firms.
  • In the past twelve months, the operating business earned good money when compared to the current stock price and financial position. It happens to be great when measured against industry peers.
  • In an alternate metric of bang for the buck, the company has usually shown a very good earnings power ability when measured against the current stock price and financial position. It's still impressive in relation to peer companies.

Total score: 6.3


CTSH logos

Company at a glance: Cognizant Technology Solutions Corporation (CTSH)

Sector, industry: Technology, Information Technology Services

Market Cap: 35.38 billions

Revenues TTM: 19.37 billions

Cognizant 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; Healthcare; 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, 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 information, media and entertainment, and communications and technology companies. The company was founded in 1994 and is headquartered in Teaneck, New Jersey.

Awarener score: 7.7

Conclusion

The higher the Awarener score, the more bang you get for the buck. It measures how much genuine funds the company generates for the stock price paid (Very good), the business stability (Superb) and growth (Lacking), and the company's inclination to return cash to the stockholders (Very good).