New Lifetime High Reached By 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 or Stephanie Link.

Trade-Ideas LLC identified Cognizant Technology Solutions ( CTSH) 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 $263.1 million.
  • CTSH has traded 52,435 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 in four segments: Financial Services, Healthcare, Manufacturing/Retail/Logistics, and Other. CTSH has a PE ratio of 23.2. Currently there are 11 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 4.7 million shares per day over the past 30 days. Cognizant Technology has a market cap of $32.5 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 1.82 and a short float of 0.8% with 0.97 days to cover. Shares are up 5.9% 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 as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, increase in stock price during the past year, growth in earnings per share and increase 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 came in higher than the industry average of 6.3%. Since the same quarter one year prior, revenues rose by 11.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving 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 3.89, 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. 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 10.5% 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 $2.02 versus $1.72 in the prior year. This year, the market expects an improvement in earnings ($2.58 versus $2.02).
  • 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 11.3% when compared to the same quarter one year prior, going from $319.63 million to $355.62 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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