Trade-Ideas: Cognizant Technology Solutions Corporation (CTSH) Is Today's New Lifetime High Stock

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 or Stephanie Link.

Trade-Ideas LLC identified Cognizant Technology Solutions Corporation ( CTSH) as a new lifetime high candidate. In addition to specific proprietary factors, Trade-Ideas identified Cognizant Technology Solutions Corporation 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 $150.4 million.
  • CTSH has traded 1.4 million 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 outsourcing services worldwide. The company operates through four segments: Financial Services; Healthcare; Manufacturing, Retail, and Logistics; and Other. CTSH has a PE ratio of 22.1. Currently there are 16 analysts that rate Cognizant Technology Solutions Corporation a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Cognizant Technology Solutions Corporation has been 2.4 million shares per day over the past 30 days. Cognizant Technology has a market cap of $25.0 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 1.58 and a short float of 1.8% with 3.59 days to cover. Shares are up 12.2% year to date as of the close of trading on Friday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Cognizant Technology Solutions Corporation as a buy. 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, impressive record of earnings per share growth and compelling growth in net income. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 15.3%. Since the same quarter one year prior, revenues rose by 20.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • CTSH has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 3.45, which clearly demonstrates the ability to cover short-term cash needs.
  • The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • COGNIZANT TECH SOLUTIONS has improved earnings per share by 20.7% 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 $3.44 versus $2.85 in the prior year. This year, the market expects an improvement in earnings ($3.97 versus $3.44).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the IT Services industry average. The net income increased by 19.2% when compared to the same quarter one year prior, going from $251.93 million to $300.41 million.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.
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