Cognizant Technology Solutions Corp (CTSH, Financial) has recently been in the spotlight, drawing interest from investors and financial analysts due to its robust financial stance. With shares currently priced at $77.97, Cognizant Technology Solutions Corp has witnessed a daily gain of 4.13%, marked against a three-month change of 18.7%. A thorough analysis, underlined by the GF Score, suggests that Cognizant Technology Solutions Corp is well-positioned for substantial growth in the near future.
What Is the GF Score?
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
- Financial strength rank: 9/10
- Profitability rank: 9/10
- Growth rank: 8/10
- GF Value rank: 6/10
- Momentum rank: 10/10
With a high Financial Strength and Profitability rank, and a solid Growth rank, Cognizant Technology Solutions Corp demonstrates a balanced and robust business model. The slightly lower GF Value rank indicates that the stock may not be the cheapest on the market, but its exceptional Momentum rank suggests strong investor confidence and market trends in its favor. GuruFocus assigned Cognizant Technology Solutions Corp a GF Score of 92 out of 100, signaling high outperformance potential.
Understanding Cognizant Technology Solutions Corp's Business
Cognizant Technology Solutions Corp, with a market cap of $39.1 billion and sales of $19.43 billion, is a global IT services provider that offers consulting and outsourcing services to some of the world's largest enterprises across various industries. With an operating margin of 14.61%, Cognizant employs nearly 300,000 people globally, with approximately 70% based in India. Despite its global workforce, the company's headquarters are in Teaneck, New Jersey.
Financial Strength Breakdown
According to the Financial Strength rating, Cognizant Technology Solutions Corp's robust balance sheet exhibits resilience against financial volatility, reflecting prudent management of capital structure. The Interest Coverage ratio for Cognizant Technology Solutions Corp stands impressively at 74.74, underscoring its strong capability to cover its interest obligations. This robust financial position resonates with the wisdom of legendary investor Benjamin Graham, who favored companies with an interest coverage ratio of at least 5. With an Altman Z-Score of 7.38, Cognizant Technology Solutions Corp exhibits a strong defense against financial distress, highlighting its robust financial stability. With a favorable Debt-to-Revenue ratio of 0.07, Cognizant Technology Solutions Corp's strategic handling of debt solidifies its financial health.
Profitability Rank Breakdown
The Profitability Rank shows Cognizant Technology Solutions Corp's impressive standing among its peers in generating profit. Its strong Predictability Rank of 3.5 stars out of five underscores its consistent operational performance, providing investors with increased confidence.
Growth Rank Breakdown
Ranked highly in Growth, Cognizant Technology Solutions Corp demonstrates a strong commitment to expanding its business. The company's 3-Year Revenue Growth Rate is 7.7%, which outperforms 51.75% of companies in the Software industry. Moreover, Cognizant Technology Solutions Corp has seen a robust increase in its EBITDA over the past few years, with a three-year growth rate of 7.9 and a five-year rate of 4.9. This trend accentuates the company's continued capability to drive growth.
Next Steps
Considering Cognizant Technology Solutions Corp's financial strength, profitability, and growth metrics, the GF Score highlights the firm's unparalleled position for potential outperformance. Investors seeking to capitalize on such robust financial health and promising growth prospects may find Cognizant Technology Solutions Corp an attractive addition to their portfolios. For those looking to discover more companies with strong GF Scores, GuruFocus Premium members can use the following screener link: GF Score Screen.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
