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Also traded in: Austria, Brazil, Germany, Mexico, Switzerland, UK

GuruFocus Financial Strength Rank measures how strong a company’s financial situation is. It is based on these factors

1. The debt burden that the company has as measured by its Interest coverage (current year).
2. Debt to revenue ratio. The lower, the better
3. Altman Z-score.

A company ranks high with financial strength is likely to withstand any business slowdowns and recessions.

Financial Strength : 8/10

vs
industry
vs
history
Cash-to-Debt 5.67
NAS:CTSH's Cash-to-Debt is ranked higher than
52% of the 1995 Companies
in the Global Information Technology Services industry.

( Industry Median: 4.27 vs. NAS:CTSH: 5.67 )
Ranked among companies with meaningful Cash-to-Debt only.
NAS:CTSH' s Cash-to-Debt Range Over the Past 10 Years
Min: 2.31  Med: No Debt Max: No Debt
Current: 5.67
2.31
No Debt
Equity-to-Asset 0.72
NAS:CTSH's Equity-to-Asset is ranked higher than
71% of the 1912 Companies
in the Global Information Technology Services industry.

( Industry Median: 0.60 vs. NAS:CTSH: 0.72 )
Ranked among companies with meaningful Equity-to-Asset only.
NAS:CTSH' s Equity-to-Asset Range Over the Past 10 Years
Min: 0.6  Med: 0.75 Max: 0.85
Current: 0.72
0.6
0.85
Debt-to-Equity 0.07
NAS:CTSH's Debt-to-Equity is ranked higher than
80% of the 1183 Companies
in the Global Information Technology Services industry.

( Industry Median: 0.27 vs. NAS:CTSH: 0.07 )
Ranked among companies with meaningful Debt-to-Equity only.
NAS:CTSH' s Debt-to-Equity Range Over the Past 10 Years
Min: 0.07  Med: 0.1 Max: 0.25
Current: 0.07
0.07
0.25
Debt-to-EBITDA 0.24
NAS:CTSH's Debt-to-EBITDA is ranked higher than
83% of the 1040 Companies
in the Global Information Technology Services industry.

( Industry Median: 1.30 vs. NAS:CTSH: 0.24 )
Ranked among companies with meaningful Debt-to-EBITDA only.
NAS:CTSH' s Debt-to-EBITDA Range Over the Past 10 Years
Min: 0.28  Med: 0.42 Max: 0.77
Current: 0.24
0.28
0.77
Interest Coverage 111.17
NAS:CTSH's Interest Coverage is ranked lower than
51% of the 1497 Companies
in the Global Information Technology Services industry.

( Industry Median: 138.02 vs. NAS:CTSH: 111.17 )
Ranked among companies with meaningful Interest Coverage only.
NAS:CTSH' s Interest Coverage Range Over the Past 10 Years
Min: 107.87  Med: No Debt Max: No Debt
Current: 111.17
107.87
No Debt
Piotroski F-Score: 6
Altman Z-Score: 9.42
Beneish M-Score: -2.60
WACC vs ROIC
7.04%
20.68%
WACC
ROIC
GuruFocus Profitability Rank ranks how profitable a company is and how likely the company’s business will stay that way. It is based on these factors:

1. Operating Margin
2. Trend of the Operating Margin (5-year average). The company with an uptrend profit margin has a higher rank.
••3. Consistency of the profitability
4. Piotroski F-Score
5. Predictability Rank•

The maximum rank is 10. A rank of 7 or higher means a higher profitability and may stay that way. A rank of 3 or lower indicates that the company has had trouble to make a profit.

Profitability Rank is not directly related to the Financial Strength Rank. But if a company is consistently profitable, its financial strength will be stronger.

Profitability & Growth : 8/10

vs
industry
vs
history
Operating Margin % 17.20
NAS:CTSH's Operating Margin % is ranked higher than
83% of the 1940 Companies
in the Global Information Technology Services industry.

( Industry Median: 5.13 vs. NAS:CTSH: 17.20 )
Ranked among companies with meaningful Operating Margin % only.
NAS:CTSH' s Operating Margin % Range Over the Past 10 Years
Min: 16.75  Med: 18.45 Max: 18.97
Current: 17.2
16.75
18.97
Net Margin % 9.37
NAS:CTSH's Net Margin % is ranked higher than
71% of the 1940 Companies
in the Global Information Technology Services industry.

( Industry Median: 3.84 vs. NAS:CTSH: 9.37 )
Ranked among companies with meaningful Net Margin % only.
NAS:CTSH' s Net Margin % Range Over the Past 10 Years
Min: 10.16  Med: 14.17 Max: 16.32
Current: 9.37
10.16
16.32
ROE % 13.51
NAS:CTSH's ROE % is ranked higher than
70% of the 1869 Companies
in the Global Information Technology Services industry.

( Industry Median: 6.75 vs. NAS:CTSH: 13.51 )
Ranked among companies with meaningful ROE % only.
NAS:CTSH' s ROE % Range Over the Past 10 Years
Min: 14.06  Med: 22.76 Max: 25.09
Current: 13.51
14.06
25.09
ROA % 9.87
NAS:CTSH's ROA % is ranked higher than
80% of the 2005 Companies
in the Global Information Technology Services industry.

( Industry Median: 3.19 vs. NAS:CTSH: 9.87 )
Ranked among companies with meaningful ROA % only.
NAS:CTSH' s ROA % Range Over the Past 10 Years
Min: 10.2  Med: 17.13 Max: 20.45
Current: 9.87
10.2
20.45
ROC (Joel Greenblatt) % 103.50
NAS:CTSH's ROC (Joel Greenblatt) % is ranked higher than
74% of the 1965 Companies
in the Global Information Technology Services industry.

( Industry Median: 23.66 vs. NAS:CTSH: 103.50 )
Ranked among companies with meaningful ROC (Joel Greenblatt) % only.
NAS:CTSH' s ROC (Joel Greenblatt) % Range Over the Past 10 Years
Min: 75.96  Med: 116.29 Max: 135.09
Current: 103.5
75.96
135.09
3-Year Revenue Growth Rate 14.10
NAS:CTSH's 3-Year Revenue Growth Rate is ranked higher than
71% of the 1650 Companies
in the Global Information Technology Services industry.

( Industry Median: 6.00 vs. NAS:CTSH: 14.10 )
Ranked among companies with meaningful 3-Year Revenue Growth Rate only.
NAS:CTSH' s 3-Year Revenue Growth Rate Range Over the Past 10 Years
Min: 7.3  Med: 30.2 Max: 51.7
Current: 14.1
7.3
51.7
3-Year EBITDA Growth Rate 14.60
NAS:CTSH's 3-Year EBITDA Growth Rate is ranked higher than
60% of the 1466 Companies
in the Global Information Technology Services industry.

( Industry Median: 8.90 vs. NAS:CTSH: 14.60 )
Ranked among companies with meaningful 3-Year EBITDA Growth Rate only.
NAS:CTSH' s 3-Year EBITDA Growth Rate Range Over the Past 10 Years
Min: 14  Med: 29.9 Max: 46.9
Current: 14.6
14
46.9
3-Year EPS without NRI Growth Rate 2.50
NAS:CTSH's 3-Year EPS without NRI Growth Rate is ranked lower than
61% of the 1339 Companies
in the Global Information Technology Services industry.

( Industry Median: 10.60 vs. NAS:CTSH: 2.50 )
Ranked among companies with meaningful 3-Year EPS without NRI Growth Rate only.
NAS:CTSH' s 3-Year EPS without NRI Growth Rate Range Over the Past 10 Years
Min: 2.5  Med: 27.3 Max: 60.9
Current: 2.5
2.5
60.9
GuruFocus has detected 3 Warning Signs with Cognizant Technology Solutions Corp NAS:CTSH.
More than 500,000 people have already joined GuruFocus to track the stocks they follow and exchange investment ideas.
» NAS:CTSH's 30-Y Financials

Financials (Next Earnings Date: 2018-11-07 Est.)


Revenue & Net Income
Cash & Debt
Operating Cash Flow & Free Cash Flow
Operating Cash Flow & Net Income

» Details

Guru Trades

Q3 2017

CTSH Guru Trades in Q3 2017

John Hussman 1,100 sh (New)
Ronald Muhlenkamp 92,220 sh (New)
Ray Dalio 85,695 sh (New)
Jim Simons 551,752 sh (New)
Caxton Associates 2,800 sh (New)
Joel Greenblatt 6,992 sh (+6.50%)
Jerome Dodson 400,000 sh (unchged)
Yacktman Focused Fund 330,000 sh (unchged)
Yacktman Fund 630,000 sh (unchged)
Matthews Pacific Tiger Fund 2,186,600 sh (unchged)
Jeff Auxier 37,523 sh (unchged)
Paul Singer 1,124,440 sh (unchged)
Jana Partners Sold Out
Diamond Hill Capital 1,217,946 sh (-0.16%)
Yacktman Asset Management 1,339,969 sh (-0.32%)
Pioneer Investments 3,517,647 sh (-0.91%)
Richard Pzena 6,925,051 sh (-1.22%)
Jeremy Grantham 4,020,182 sh (-10.81%)
David Rolfe 1,373,146 sh (-18.72%)
Alan Fournier 850,313 sh (-20.91%)
Charles Brandes 136,684 sh (-47.03%)
Paul Tudor Jones 4,605 sh (-76.49%)
» More
Q4 2017

CTSH Guru Trades in Q4 2017

David Dreman 4,680 sh (New)
Lee Ainslie 121,290 sh (New)
John Hussman 61,100 sh (+5454.55%)
Caxton Associates 18,093 sh (+546.18%)
Paul Tudor Jones 28,029 sh (+508.66%)
Pioneer Investments 4,691,542 sh (+33.37%)
Joel Greenblatt 8,202 sh (+17.31%)
Richard Pzena 7,119,634 sh (+2.81%)
Diamond Hill Capital 1,239,562 sh (+1.77%)
Jerome Dodson 400,000 sh (unchged)
Yacktman Fund 630,000 sh (unchged)
Yacktman Focused Fund 330,000 sh (unchged)
Matthews Pacific Tiger Fund 2,186,600 sh (unchged)
Jeff Auxier 37,523 sh (unchged)
Paul Singer 1,124,440 sh (unchged)
Ronald Muhlenkamp 91,275 sh (-1.02%)
Jeremy Grantham 3,971,686 sh (-1.21%)
Yacktman Asset Management 1,304,510 sh (-2.65%)
Alan Fournier 799,497 sh (-5.98%)
Charles Brandes 128,045 sh (-6.32%)
Jim Simons 453,252 sh (-17.85%)
David Rolfe 1,105,870 sh (-19.46%)
Ray Dalio 28,757 sh (-66.44%)
» More
Q1 2018

CTSH Guru Trades in Q1 2018

Mario Gabelli 11,985 sh (New)
Steven Cohen 42,556 sh (New)
Jim Simons 935,352 sh (+106.36%)
Joel Greenblatt 11,521 sh (+40.47%)
Lee Ainslie 156,520 sh (+29.05%)
Ronald Muhlenkamp 94,534 sh (+3.57%)
Jeff Auxier 38,373 sh (+2.27%)
Ray Dalio 29,354 sh (+2.08%)
Yacktman Fund 630,000 sh (unchged)
Yacktman Focused Fund 330,000 sh (unchged)
Jerome Dodson 400,000 sh (unchged)
John Hussman 61,100 sh (unchged)
David Dreman 4,680 sh (unchged)
Matthews Pacific Tiger Fund 2,186,600 sh (unchged)
Paul Tudor Jones Sold Out
Caxton Associates Sold Out
Paul Singer Sold Out
Yacktman Asset Management 1,293,747 sh (-0.83%)
Jeremy Grantham 3,891,828 sh (-2.01%)
Diamond Hill Capital 1,193,964 sh (-3.68%)
Pioneer Investments 4,457,294 sh (-4.99%)
Richard Pzena 6,691,984 sh (-6.01%)
Charles Brandes 117,605 sh (-8.15%)
David Rolfe 939,248 sh (-15.07%)
Alan Fournier 120,000 sh (-84.99%)
» More
Q2 2018

CTSH Guru Trades in Q2 2018

Ken Fisher 3,088 sh (New)
Paul Tudor Jones 4,218 sh (New)
Pioneer Investments 6,019,411 sh (+35.05%)
Joel Greenblatt 15,025 sh (+30.41%)
Jerome Dodson 500,000 sh (+25.00%)
Alan Fournier 150,000 sh (+25.00%)
Yacktman Fund 630,000 sh (unchged)
Yacktman Focused Fund 330,000 sh (unchged)
John Hussman 61,100 sh (unchged)
Matthews Pacific Tiger Fund 2,186,600 sh (unchged)
Ronald Muhlenkamp 94,534 sh (unchged)
Ray Dalio Sold Out
Jeff Auxier 38,298 sh (-0.20%)
Yacktman Asset Management 1,274,717 sh (-1.47%)
Charles Brandes 114,149 sh (-2.94%)
Mario Gabelli 11,595 sh (-3.25%)
Richard Pzena 6,344,149 sh (-5.20%)
Diamond Hill Capital 1,093,929 sh (-8.38%)
David Rolfe 833,261 sh (-11.28%)
Jeremy Grantham 3,390,315 sh (-12.89%)
Lee Ainslie 101,890 sh (-34.90%)
Jim Simons 397,952 sh (-57.45%)
Steven Cohen 15,456 sh (-63.68%)
» More
» Details

Insider Trades

Latest Guru Trades with CTSH

(List those with share number changes of more than 20%, or impact to portfolio more than 0.1%)

GuruDate Trades Impact to Portfolio Price Range * (?) Current Price Change from Average Current Shares
Richard Pzena 2018-06-30 Reduce -5.20%0.14%$74.41 - $82.7 $ 75.10-5%6,344,149
Yacktman Asset Management 2018-06-30 Reduce -1.47%0.02%$74.41 - $82.7 $ 75.10-5%1,274,717
Charles Brandes 2018-06-30 Reduce -2.94%0.01%$74.41 - $82.7 $ 75.10-5%114,149
Joel Greenblatt 2018-06-30 Add 30.41%$74.41 - $82.7 $ 75.10-5%15,025
Mario Gabelli 2018-06-30 Reduce -3.25%$74.41 - $82.7 $ 75.10-5%11,595
Ken Fisher 2018-06-30 New Buy$74.41 - $82.7 $ 75.10-5%3,088
Richard Pzena 2018-03-31 Reduce -6.01%0.15%$70.95 - $84.83 $ 75.10-5%6,691,984
Yacktman Asset Management 2018-03-31 Reduce -0.83%0.01%$70.95 - $84.83 $ 75.10-5%1,293,747
Charles Brandes 2018-03-31 Reduce -8.15%0.01%$70.95 - $84.83 $ 75.10-5%117,605
Ronald Muhlenkamp 2018-03-31 Add 3.57%0.1%$70.95 - $84.83 $ 75.10-5%94,534
Mario Gabelli 2018-03-31 New Buy0.01%$70.95 - $84.83 $ 75.10-5%11,985
Joel Greenblatt 2018-03-31 Add 40.47%$70.95 - $84.83 $ 75.10-5%11,521
Richard Pzena 2017-12-31 Add 2.81%0.07%$70.32 - $75.67 $ 75.103%7,119,634
Yacktman Asset Management 2017-12-31 Reduce -2.65%0.02%$70.32 - $75.67 $ 75.103%1,304,510
Charles Brandes 2017-12-31 Reduce -6.32%0.01%$70.32 - $75.67 $ 75.103%128,045
Ronald Muhlenkamp 2017-12-31 Reduce -1.02%0.02%$70.32 - $75.67 $ 75.103%91,275
Joel Greenblatt 2017-12-31 Add 17.31%$70.32 - $75.67 $ 75.103%8,202
David Dreman 2017-12-31 New Buy0.19%$70.32 - $75.67 $ 75.103%4,680
Richard Pzena 2017-09-30 Reduce -1.22%0.03%$66.29 - $72.84 $ 75.107%6,925,051
Yacktman Asset Management 2017-09-30 Reduce -0.32%$66.29 - $72.84 $ 75.107%1,339,969
Charles Brandes 2017-09-30 Reduce -47.03%0.13%$66.29 - $72.84 $ 75.107%136,684
Ronald Muhlenkamp 2017-09-30 New Buy2.12%$66.29 - $72.84 $ 75.107%92,220
Joel Greenblatt 2017-09-30 Add 6.50%$66.29 - $72.84 $ 75.107%6,992
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Business Description

Industry: Application Software » Information Technology Services    NAICS: 541511    SIC: 7371
Compare:NSE:INFY, TSE:6501, XMCE:AMS, NYSE:DXC, XPAR:CAP, NSE:HCLTECH, BOM:507685, XKRX:018260, TSX:GIB.A, XKRX:034730, TSE:9613, XPAR:ATO, TSE:6702, TSE:4307, NYSE:IT, NAS:CDW, NYSE:LDOS, BOM:532755, HKSE:00696, NYSE:XRX » details
Traded in other countries:CTSH.Austria, CTSH34.Brazil, COZ.Germany, CTSH.Mexico, CTSH.Switzerland, 0QZ5.UK,
Headquarter Location:USA
Cognizant Technology Solutions Corp is an IT services provider. The company provides services such as technology consulting, application outsourcing, systems integration, business process services, and cloud services.

Cognizant is an IT services provider with headquarters in Teaneck, New Jersey. The company was founded in 1994, employs close to 260,000 people, and provides such services as technology consulting, application outsourcing, systems integration, business process services, and cloud services. The firm generates approximately 77% of group revenue from the North American market and roughly 90% of group revenue from its three main industries: financial services, healthcare, and manufacturing, retail, and logistics.

Guru Investment Theses on Cognizant Technology Solutions Corp

David Rolfe Comments on Cognizant - Jul 13, 2018

Cognizant (NASDAQ:CTSH) detracted from absolute as well as relative performance in the quarter. After being a strong performer during both the second half of 2017 and the first quarter this year, Cognizant gave some of that relative performance back after reporting earnings that disappointed analysts. While the report was in line with consensus expectations, management did reduce full year 2018 earnings per share (EPS) estimates to reflect a higher tax rate following the U.S. Tax Cuts and Jobs Act enacted last year. Essentially, management now has better clarity around calculation of certain income earned for American taxpayers involved in foreign businesses which ultimately provides a limit on the amount of foreign tax credits the Company receives. While this was not clear when management gave original guidance in February, the Company now has a better understanding of the impact, resulting in the reduced EPS guidance. We are not concerned with the release because the change reflects the updated tax-rate expectations, rather than an issue with Company execution or a decline in industry or market expectations. Consensus, however, has become used to "beat and raise" quarters and thus shares sold off on the report.

Another reason we remain convicted is that the Company’s margin expansion story remains on track. Management reaffirmed 2018 operating margin guidance of approximately 21% and they stand behind reaching 22% by the end of 2019. Helping achieve this is Cognizant's continued execution of their cost-cutting initiatives throughout the year, and as digital revenue continues to grow in the mid-to-high 20% range. As a reminder, digital revenue made up 29% of total company revenue during the quarter. This higher margin business is growing faster than Company average. The healthcare segment remains strong and the financial services segment continues to improve. Management even noted that, with the changes in tax reform and rising interest rates, they are starting to see more spending in the large money center banks, which has been an area of sluggish growth the last several quarters.

From David Rolfe (Trades, Portfolio)'s second quarter 2018 shareholder letter.

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David Rolfe Comments on Cognizant - Oct 16, 2017

Cognizant (NASDAQ:CTSH) has been a strong performer throughout the year. In 2016 it proved to be a bit sluggish, particularly when the strong and steady revenue growth typically reported by the Company experienced headwinds in multiple business segments. In their Financial Services segment, 2016 was marked by large money center bank customers spending more cautiously due to the low interest rate environment. Political uncertainty in the U.S. during the election year also impacted spending by their customers. While these large banks continue to take a conservative approach to spending, management has noted some stability in the banking sector relative to last year.

Recall that when we last wrote on Cognizant's performance (about a year ago) we mentioned four Cognizant clients in the HMO industry were all attempting to merge with or acquire each other. This M&A activity caused these clients to pause their project spending until the mergers were either finalized or abandoned. It did not help that these large industry M&A transactions were slowed by regulatory hurdles. Both transactions were ultimately blocked by the Department of Justice and, as we predicted a year ago, spending has since bounced back as these clients are now looking to invest.

Perhaps the largest contributor to Cognizant's performance has been the announcement and implementation of their Strategic Plan earlier this year. The plan focusses mainly on accelerating the Company's shift to Digital Services (from a majority IT Services today) through both organic investments and acquisitions. Digital Services make up approximately 26% of total Company revenue (this is up from 23% of total revenue when the plan was first announced). However, these revenues are growing well above the Company average. While the digital market is not without competition, we certainly believe there is enough addressable market for Cognizant to take a reasonable share.

Additional initiatives of the Strategic Plan include improving margins and enhancing capital deployment. Historically, management has targeted a fairly steady operating margin level of 19-20%. As part of this plan, Cognizant is targeting 22% operating margins by 2019, a fairly substantial expansion but one we believe is achievable as the Company optimizes its cost structure. The shift to digital also helps in this area as these revenues generate higher margins in addition to growing faster than the Company average. Capital deployment plans include increased capital returns which include both share buybacks and dividends (the Company had not paid a dividend prior to the announcement of this plan), with a plan in place to return 75% of U.S.-generated free cash flow from 2019 onward.



From David Rolfe (Trades, Portfolio)'s Wedgewood Partners 3rd quarter shareholder letter.

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Jerome Dodson Comments on Cognizant - Apr 26, 2017

The second stock we added was Cognizant (NASDAQ:CTSH), the information technology (IT) consultant. The company’s revenue grew at an amazing 30% annualized rate between 2005 and 2015, as technology transformed business models in its focus areas of financial services and healthcare. Over the past year, growth has slowed to an 8%-10% range as some IT projects have shifted to data centers and the cloud, while banks and health insurers have reduced spending due to regulatory uncertainty. Even if Cognizant grows at a high single-digit clip, we believe our upside is significant due to management’s newfound focus on increasing margins and returning cash to shareholders.

Jerome Dodson (Trades, Portfolio)'s first quarter 2017 Parnassus Funds commentary.

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Zeke Ashton Comments on Cognizant Solutions - Jan 06, 2017

Cognizant Solutions (NASDAQ:CTSH) is a leading provider of outsourced business processing and technology solutions, providing mission-critical services to a base of over 1,200 mostly large global corporate customers primarily in the areas of banking and insurance, healthcare, logistics, and manufacturing. As an indication of just how successful Cognizant has been, a quick review of the financials from 2005 to 2015 reveals a business that grew top-line revenue roughly 14-fold from $885 million to $12.4 billion. Even more impressively, cash flow profitability improved from $68 million to $1.8 billion (roughly 26-fold) during the same span as the company achieved scale and operating leverage. We initially began buying Cognizant stock following the “Brexit” vote. We added to the Fund’s position when the stock sold off further in late September after the company disclosed an internal investigation related to improper payments made by company personnel in India that could be in violation of U.S. anti-bribery laws. We made this incremental investment in the belief that this unfortunate situation is likely to be an issue that will ultimately be resolved without significant financial liability or reputational damage to Cognizant. The stock had already recovered some of its losses by the end of October.




From Zeke Ashton (Trades, Portfolio)'s Centaur Management 2016 annual letter to investors.

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David Rolfe Comments on Cognizant - Oct 21, 2016

Cognizant (NASDAQ:CTSH) also detracted from overall performance during the quarter, due to management’s cautious commentary related to the demand environment in two of their core customer verticals. Management’s caution about IT spend in Cognizant’s BFS (Banking and Financial Services) segment trace back to the prolonged low interest rate environment along with increased uncertainty in the macro environment—particularly attributed to the “Brexit” vote, which was relatively fresh news at the time of management’s comments. We do not think this weakness has materialized in the near-term, at least to the extent that management was implying. In addition, but not necessarily new, Cognizant has four clients in the HMO (health-maintenance organization) industry, all attempting to merge with or acquire the other. Though the extended timeline of these M&A deals likely pushes out the timing of expected work for Cognizant at each of these four clients, we think Cognizant’s longer-term positioning as a key partner at all four HMOs will continue to allow them to capture wallet share, regardless of M&A outcomes. Near-term, we expect investors to remain skittish around the shares, if only because the investor base has been skittish for years, with the NTM P/E multiple of Cognizant typically vacillating 20%-30% per year. Despite these recent headwinds to topline growth, we think Cognizant maintains a long- term runway for generating attractive organic growth, as the company benefits from the secular shift of IT spend towards digital solutions. The Company maintains excellent financial strength, with nearly $8 billion in borrowing capacity before reaching the average net debt to operating income leverage of the S&P 500—close to 25% of the current market cap.

From David Rolfe (Trades, Portfolio)'s Wedgewood Partners third-quarter 2016 shareholder letter.

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David Rolfe Comments on Cognizant - Oct 17, 2016

Cognizant (NASDAQ:CTSH) also detracted from overall performance during the quarter, due to management’s cautious commentary related to the demand environment in two of their core customer verticals. Management’s caution about IT spend in Cognizant’s BFS (Banking and Financial Services) segment trace back to the prolonged low interest rate environment along with increased uncertainty in the macro environment—particularly attributed to the “Brexit” vote, which was relatively fresh news at the time of management’s comments. We do not think this weakness has materialized in the near-term, at least to the extent that management was implying. In addition, but not necessarily new, Cognizant has four clients in the HMO (health-maintenance organization) industry, all attempting to merge with or acquire the other. Though the extended timeline of these M&A deals likely pushes out the timing of expected work for Cognizant at each of these four clients, we think Cognizant’s longer-term positioning as a key partner at all four HMOs will continue to allow them to capture wallet share, regardless of M&A outcomes. Near-term, we expect investors to remain skittish around the shares, if only because the investor base has been skittish for years, with the NTM P/E multiple of Cognizant typically vacillating 20%-30% per year. Despite these recent headwinds to topline growth, we think Cognizant maintains a long- term runway for generating attractive organic growth, as the company benefits from the secular shift of IT spend towards digital solutions. The Company maintains excellent financial strength, with nearly $8 billion in borrowing capacity before reaching the average net debt to operating income leverage of the S&P 500—close to 25% of the current market cap.



From Wedgewood Partners' third quarter 2016 shareholder commentary.



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David Rolfe Comments on Cognizant Guru stock highlight
Cognizant (NASDAQ:CTSH) detracted from absolute as well as relative performance in the quarter. After being a strong performer during both the second half of 2017 and the first quarter this year, Cognizant gave some of that relative performance back after reporting earnings that disappointed analysts. While the report was in line with consensus expectations, management did reduce full year 2018 earnings per share (EPS) estimates to reflect a higher tax rate following the U.S. Tax Cuts and Jobs Act enacted last year. Essentially, management now has better clarity around calculation of certain income earned for American taxpayers involved in foreign businesses which ultimately provides a limit on the amount of foreign tax credits the Company receives. While this was not clear when management gave original guidance in February, the Company now has a better understanding of the impact, resulting in the reduced EPS guidance. We are not concerned with the release because the change reflects the updated tax-rate expectations, rather than an issue with Company execution or a decline in industry or market expectations. Consensus, however, Read more...
Cognizant to Present at the Berenberg Blockchain Conference USA 2018
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Ratios

vs
industry
vs
history
PE Ratio 30.28
CTSH's PE Ratio is ranked lower than
55% of the 1281 Companies
in the Global Information Technology Services industry.

( Industry Median: 27.75 vs. CTSH: 30.28 )
Ranked among companies with meaningful PE Ratio only.
CTSH' s PE Ratio Range Over the Past 10 Years
Min: 11.21  Med: 23.27 Max: 39.87
Current: 30.28
11.21
39.87
Forward PE Ratio 16.61
CTSH's Forward PE Ratio is ranked higher than
79% of the 343 Companies
in the Global Information Technology Services industry.

( Industry Median: 25.00 vs. CTSH: 16.61 )
Ranked among companies with meaningful Forward PE Ratio only.
N/A
PE Ratio without NRI 30.28
CTSH's PE Ratio without NRI is ranked lower than
54% of the 1278 Companies
in the Global Information Technology Services industry.

( Industry Median: 27.79 vs. CTSH: 30.28 )
Ranked among companies with meaningful PE Ratio without NRI only.
CTSH' s PE Ratio without NRI Range Over the Past 10 Years
Min: 11.21  Med: 23.27 Max: 39.87
Current: 30.28
11.21
39.87
Price-to-Owner-Earnings 21.19
CTSH's Price-to-Owner-Earnings is ranked higher than
61% of the 760 Companies
in the Global Information Technology Services industry.

( Industry Median: 28.11 vs. CTSH: 21.19 )
Ranked among companies with meaningful Price-to-Owner-Earnings only.
CTSH' s Price-to-Owner-Earnings Range Over the Past 10 Years
Min: 15.33  Med: 26 Max: 61.64
Current: 21.19
15.33
61.64
PB Ratio 4.09
CTSH's PB Ratio is ranked lower than
61% of the 1858 Companies
in the Global Information Technology Services industry.

( Industry Median: 3.12 vs. CTSH: 4.09 )
Ranked among companies with meaningful PB Ratio only.
CTSH' s PB Ratio Range Over the Past 10 Years
Min: 2.46  Med: 4.43 Max: 8.63
Current: 4.09
2.46
8.63
PS Ratio 2.85
CTSH's PS Ratio is ranked lower than
53% of the 1840 Companies
in the Global Information Technology Services industry.

( Industry Median: 2.60 vs. CTSH: 2.85 )
Ranked among companies with meaningful PS Ratio only.
CTSH' s PS Ratio Range Over the Past 10 Years
Min: 1.76  Med: 3.2 Max: 6.65
Current: 2.85
1.76
6.65
Price-to-Free-Cash-Flow 19.34
CTSH's Price-to-Free-Cash-Flow is ranked higher than
69% of the 750 Companies
in the Global Information Technology Services industry.

( Industry Median: 30.05 vs. CTSH: 19.34 )
Ranked among companies with meaningful Price-to-Free-Cash-Flow only.
CTSH' s Price-to-Free-Cash-Flow Range Over the Past 10 Years
Min: 15.78  Med: 25.75 Max: 77.44
Current: 19.34
15.78
77.44
Price-to-Operating-Cash-Flow 16.80
CTSH's Price-to-Operating-Cash-Flow is ranked higher than
62% of the 923 Companies
in the Global Information Technology Services industry.

( Industry Median: 21.70 vs. CTSH: 16.80 )
Ranked among companies with meaningful Price-to-Operating-Cash-Flow only.
CTSH' s Price-to-Operating-Cash-Flow Range Over the Past 10 Years
Min: 11.32  Med: 20.32 Max: 41.65
Current: 16.8
11.32
41.65
EV-to-EBIT 14.76
CTSH's EV-to-EBIT is ranked higher than
64% of the 1311 Companies
in the Global Information Technology Services industry.

( Industry Median: 19.89 vs. CTSH: 14.76 )
Ranked among companies with meaningful EV-to-EBIT only.
CTSH' s EV-to-EBIT Range Over the Past 10 Years
Min: 8.5  Med: 15.5 Max: 34.8
Current: 14.76
8.5
34.8
EV-to-EBITDA 12.56
CTSH's EV-to-EBITDA is ranked higher than
61% of the 1413 Companies
in the Global Information Technology Services industry.

( Industry Median: 15.96 vs. CTSH: 12.56 )
Ranked among companies with meaningful EV-to-EBITDA only.
CTSH' s EV-to-EBITDA Range Over the Past 10 Years
Min: 7.4  Med: 13.65 Max: 30.5
Current: 12.56
7.4
30.5
EV-to-Revenue 2.58
CTSH's EV-to-Revenue is ranked higher than
50% of the 1910 Companies
in the Global Information Technology Services industry.

( Industry Median: 2.65 vs. CTSH: 2.58 )
Ranked among companies with meaningful EV-to-Revenue only.
CTSH' s EV-to-Revenue Range Over the Past 10 Years
Min: 1.5  Med: 2.9 Max: 6.3
Current: 2.58
1.5
6.3
PEG Ratio 1.97
CTSH's PEG Ratio is ranked higher than
52% of the 599 Companies
in the Global Information Technology Services industry.

( Industry Median: 2.07 vs. CTSH: 1.97 )
Ranked among companies with meaningful PEG Ratio only.
CTSH' s PEG Ratio Range Over the Past 10 Years
Min: 0.25  Med: 0.82 Max: 2.38
Current: 1.97
0.25
2.38
Shiller PE Ratio 36.13
CTSH's Shiller PE Ratio is ranked higher than
53% of the 434 Companies
in the Global Information Technology Services industry.

( Industry Median: 37.98 vs. CTSH: 36.13 )
Ranked among companies with meaningful Shiller PE Ratio only.
CTSH' s Shiller PE Ratio Range Over the Past 10 Years
Min: 29.45  Med: 45.8 Max: 84
Current: 36.13
29.45
84
Current Ratio 3.27
CTSH's Current Ratio is ranked higher than
74% of the 1957 Companies
in the Global Information Technology Services industry.

( Industry Median: 1.93 vs. CTSH: 3.27 )
Ranked among companies with meaningful Current Ratio only.
CTSH' s Current Ratio Range Over the Past 10 Years
Min: 2.48  Med: 4.14 Max: 5.68
Current: 3.27
2.48
5.68
Quick Ratio 3.27
CTSH's Quick Ratio is ranked higher than
75% of the 1957 Companies
in the Global Information Technology Services industry.

( Industry Median: 1.79 vs. CTSH: 3.27 )
Ranked among companies with meaningful Quick Ratio only.
CTSH' s Quick Ratio Range Over the Past 10 Years
Min: 2.48  Med: 4.14 Max: 5.68
Current: 3.27
2.48
5.68
Days Sales Outstanding 75.39
CTSH's Days Sales Outstanding is ranked lower than
57% of the 1879 Companies
in the Global Information Technology Services industry.

( Industry Median: 68.11 vs. CTSH: 75.39 )
Ranked among companies with meaningful Days Sales Outstanding only.
CTSH' s Days Sales Outstanding Range Over the Past 10 Years
Min: 66.23  Med: 70.17 Max: 80.61
Current: 75.39
66.23
80.61
Days Payable 8.32
CTSH's Days Payable is ranked lower than
90% of the 1720 Companies
in the Global Information Technology Services industry.

( Industry Median: 45.50 vs. CTSH: 8.32 )
Ranked among companies with meaningful Days Payable only.
CTSH' s Days Payable Range Over the Past 10 Years
Min: 7.45  Med: 8.52 Max: 10.78
Current: 8.32
7.45
10.78

Dividend & Buy Back

vs
industry
vs
history
Dividend Yield % 0.93
CTSH's Dividend Yield % is ranked lower than
71% of the 1428 Companies
in the Global Information Technology Services industry.

( Industry Median: 1.51 vs. CTSH: 0.93 )
Ranked among companies with meaningful Dividend Yield % only.
CTSH' s Dividend Yield % Range Over the Past 10 Years
Min: 0.21  Med: 0.6 Max: 0.94
Current: 0.93
0.21
0.94
Dividend Payout Ratio 0.28
CTSH's Dividend Payout Ratio is ranked higher than
62% of the 877 Companies
in the Global Information Technology Services industry.

( Industry Median: 0.34 vs. CTSH: 0.28 )
Ranked among companies with meaningful Dividend Payout Ratio only.
CTSH' s Dividend Payout Ratio Range Over the Past 10 Years
Min: 0.18  Med: 0.18 Max: 0.28
Current: 0.28
0.18
0.28
Forward Dividend Yield % 1.07
CTSH's Forward Dividend Yield % is ranked lower than
71% of the 1350 Companies
in the Global Information Technology Services industry.

( Industry Median: 1.66 vs. CTSH: 1.07 )
Ranked among companies with meaningful Forward Dividend Yield % only.
N/A
5-Year Yield-on-Cost % 0.94
CTSH's 5-Year Yield-on-Cost % is ranked lower than
77% of the 1418 Companies
in the Global Information Technology Services industry.

( Industry Median: 1.94 vs. CTSH: 0.94 )
Ranked among companies with meaningful 5-Year Yield-on-Cost % only.
CTSH' s 5-Year Yield-on-Cost % Range Over the Past 10 Years
Min: 0.21  Med: 0.6 Max: 0.94
Current: 0.94
0.21
0.94
3-Year Average Share Buyback Ratio 1.20
CTSH's 3-Year Average Share Buyback Ratio is ranked higher than
91% of the 1387 Companies
in the Global Information Technology Services industry.

( Industry Median: -3.30 vs. CTSH: 1.20 )
Ranked among companies with meaningful 3-Year Average Share Buyback Ratio only.
CTSH' s 3-Year Average Share Buyback Ratio Range Over the Past 10 Years
Min: -5.1  Med: -1.5 Max: 1.2
Current: 1.2
-5.1
1.2

Valuation & Return

vs
industry
vs
history
Price-to-Net-Cash 500.67
CTSH's Price-to-Net-Cash is ranked lower than
99% of the 626 Companies
in the Global Information Technology Services industry.

( Industry Median: 11.44 vs. CTSH: 500.67 )
Ranked among companies with meaningful Price-to-Net-Cash only.
CTSH' s Price-to-Net-Cash Range Over the Past 10 Years
Min: 9.84  Med: 25.04 Max: 877.67
Current: 500.67
9.84
877.67
Price-to-Net-Current-Asset-Value 10.51
CTSH's Price-to-Net-Current-Asset-Value is ranked lower than
65% of the 1240 Companies
in the Global Information Technology Services industry.

( Industry Median: 6.50 vs. CTSH: 10.51 )
Ranked among companies with meaningful Price-to-Net-Current-Asset-Value only.
CTSH' s Price-to-Net-Current-Asset-Value Range Over the Past 10 Years
Min: 4.96  Med: 9.85 Max: 32.57
Current: 10.51
4.96
32.57
Price-to-Tangible-Book 6.65
CTSH's Price-to-Tangible-Book is ranked lower than
64% of the 1555 Companies
in the Global Information Technology Services industry.

( Industry Median: 4.26 vs. CTSH: 6.65 )
Ranked among companies with meaningful Price-to-Tangible-Book only.
CTSH' s Price-to-Tangible-Book Range Over the Past 10 Years
Min: 2.98  Med: 6.93 Max: 24.07
Current: 6.65
2.98
24.07
Price-to-Intrinsic-Value-Projected-FCF 1.41
CTSH's Price-to-Intrinsic-Value-Projected-FCF is ranked higher than
69% of the 840 Companies
in the Global Information Technology Services industry.

( Industry Median: 2.11 vs. CTSH: 1.41 )
Ranked among companies with meaningful Price-to-Intrinsic-Value-Projected-FCF only.
CTSH' s Price-to-Intrinsic-Value-Projected-FCF Range Over the Past 10 Years
Min: 1.15  Med: 2.24 Max: 7.31
Current: 1.41
1.15
7.31
Price-to-Intrinsic-Value-DCF (Earnings Based) 1.28
CTSH's Price-to-Intrinsic-Value-DCF (Earnings Based) is ranked higher than
61% of the 176 Companies
in the Global Information Technology Services industry.

( Industry Median: 1.83 vs. CTSH: 1.28 )
Ranked among companies with meaningful Price-to-Intrinsic-Value-DCF (Earnings Based) only.
CTSH' s Price-to-Intrinsic-Value-DCF (Earnings Based) Range Over the Past 10 Years
Min: 0.44  Med: 0.8 Max: 1.36
Current: 1.28
0.44
1.36
Price-to-Median-PS-Value 0.89
CTSH's Price-to-Median-PS-Value is ranked higher than
65% of the 1656 Companies
in the Global Information Technology Services industry.

( Industry Median: 1.09 vs. CTSH: 0.89 )
Ranked among companies with meaningful Price-to-Median-PS-Value only.
CTSH' s Price-to-Median-PS-Value Range Over the Past 10 Years
Min: 0.6  Med: 1.24 Max: 4
Current: 0.89
0.6
4
Price-to-Peter-Lynch-Fair-Value 2.17
CTSH's Price-to-Peter-Lynch-Fair-Value is ranked lower than
59% of the 402 Companies
in the Global Information Technology Services industry.

( Industry Median: 1.80 vs. CTSH: 2.17 )
Ranked among companies with meaningful Price-to-Peter-Lynch-Fair-Value only.
CTSH' s Price-to-Peter-Lynch-Fair-Value Range Over the Past 10 Years
Min: 0.5  Med: 1.16 Max: 2.4
Current: 2.17
0.5
2.4
Price-to-Graham-Number 2.99
CTSH's Price-to-Graham-Number is ranked lower than
63% of the 974 Companies
in the Global Information Technology Services industry.

( Industry Median: 2.25 vs. CTSH: 2.99 )
Ranked among companies with meaningful Price-to-Graham-Number only.
CTSH' s Price-to-Graham-Number Range Over the Past 10 Years
Min: 1.28  Med: 2.74 Max: 10.4
Current: 2.99
1.28
10.4
Earnings Yield (Greenblatt) % 6.78
CTSH's Earnings Yield (Greenblatt) % is ranked higher than
76% of the 2008 Companies
in the Global Information Technology Services industry.

( Industry Median: 2.11 vs. CTSH: 6.78 )
Ranked among companies with meaningful Earnings Yield (Greenblatt) % only.
CTSH' s Earnings Yield (Greenblatt) % Range Over the Past 10 Years
Min: 2.9  Med: 6.4 Max: 11.8
Current: 6.78
2.9
11.8
Forward Rate of Return (Yacktman) % 17.59
CTSH's Forward Rate of Return (Yacktman) % is ranked higher than
70% of the 833 Companies
in the Global Information Technology Services industry.

( Industry Median: 9.82 vs. CTSH: 17.59 )
Ranked among companies with meaningful Forward Rate of Return (Yacktman) % only.
CTSH' s Forward Rate of Return (Yacktman) % Range Over the Past 10 Years
Min: 17.3  Med: 22 Max: 23.5
Current: 17.59
17.3
23.5

More Statistics

Revenue (TTM) (Mil) $15,512.00
EPS (TTM) $ 2.48
Beta0.71
Volatility16.42%
52-Week Range $69.24 - 85.10
Shares Outstanding (Mil)580.23

Analyst Estimate

Dec18 Dec19 Dec20
Revenue (Mil $) 16,162 17,532 18,906
EBIT (Mil $) 3,147 3,597 4,050
EBITDA (Mil $) 3,658 4,144 4,556
EPS ($) 3.84 4.54 5.12
EPS without NRI ($) 3.84 4.54 5.12
EPS Growth Rate
(Future 3Y To 5Y Estimate)
14.55%
Dividends per Share ($) 0.73 0.84 0.90

Piotroski F-Score Details

Piotroski F-Score: 66
Positive ROAY
Positive CFROAY
Higher ROA yoyN
CFROA > ROAY
Lower Leverage yoyY
Higher Current Ratio yoyN
Less Shares Outstanding yoyY
Higher Gross Margin yoyN
Higher Asset Turnover yoyY

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