New Lifetime High Reached: Cognizant Technology Solutions (CTSH)
Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer.
Trade-Ideas LLC identified
Cognizant Technology Solutions
(
) as a new lifetime high candidate. In addition to specific proprietary factors, Trade-Ideas identified Cognizant Technology Solutions as such a stock due to the following factors:
- CTSH has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $195.3 million.
- CTSH has traded 946,122 shares today.
- CTSH is trading at a new lifetime high.
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More details on CTSH:
Cognizant Technology Solutions Corporation provides information technology (IT), consulting, and business process services worldwide. The company operates through four segments: Financial Services, Healthcare, Manufacturing/Retail/Logistics, and Other. CTSH has a PE ratio of 26.5. Currently there are 16 analysts that rate Cognizant Technology Solutions a buy, no analysts rate it a sell, and 2 rate it a hold.
The average volume for Cognizant Technology Solutions has been 3.9 million shares per day over the past 30 days. Cognizant Technology has a market cap of $37.9 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 1.79 and a short float of 1.1% with 2.14 days to cover. Shares are up 21.1% year-to-date as of the close of trading on Wednesday.
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Analysis:
rates Cognizant Technology Solutions as a
. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, growth in earnings per share and increase in net income. We feel these strengths outweigh the fact that the company shows weak operating cash flow.
Highlights from the ratings report include:
- The revenue growth greatly exceeded the industry average of 19.9%. Since the same quarter one year prior, revenues rose by 16.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- CTSH's debt-to-equity ratio is very low at 0.21 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, CTSH has a quick ratio of 2.34, which demonstrates the ability of the company to cover short-term liquidity needs.
- The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
- COGNIZANT TECH SOLUTIONS has improved earnings per share by 11.3% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, COGNIZANT TECH SOLUTIONS increased its bottom line by earning $2.35 versus $2.02 in the prior year. This year, the market expects an improvement in earnings ($2.94 versus $2.35).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the IT Services industry average. The net income increased by 11.9% when compared to the same quarter one year prior, going from $324.33 million to $362.86 million.
- You can view the full Cognizant Technology Solutions Ratings Report.
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