CTSH - Embedded Expectations Analysis - 2020 08 28
Cognizant Technology Solutions Corporation (CTSH:USA) currently trades below corporate averages relative to UAFRS-based (Uniform) earnings, with a 16.3x Uniform P/E, implying bearish expectations for the firm. Although management may have concerns about assisting clients, acquisition benefits, and pipeline potential, market expectations are too bearish, and longer-term equity performance is likelySpecifically, management may lack confidence in their ability to maintain their commercial momentum, sustain voluntary attrition declines, and assist clients through their offerings. Furthermore, they may be exaggerating becoming more competitive across industries, their focus on IT and security remediation efforts, and the benefits of the Collaborative Solutions acquisition. Moreover, management may have concerns about acquiring New Signature, the potential of their pipeline, and the sustainability of tech business growth. Additionally, they may lack confidence in their ability to successfully market their digital capabilities and be the leading professional service firm in the world by industrializing delivery capabilities and globalizing
Although management may have concerns about assisting clients, acquisition benefits, and pipeline potential, market expectations are too bearish given the firm's strong business model. As such, longer-term equity performance is likely for CTSH going forward
Cognizant Technology Solutions is a services company, transforming customers' business, operating and technology models for the digital era. The company's services include digital services and solutions, consulting, application development, systems integration, application testing, application maintenance, infrastructure services and business process services. Additionally, the company develops, licenses, implements and supports proprietary and third-party software products and platforms. The company has organized its services and solutions into four practice areas: Digital Business, Digital Operations, Digital Systems and Technology and Consulting.
In 2009, just as the dust was settling from the last major equity and credit market crises, we launched a boutique research firm with the intention of breaking Wall Street’s biases and broken incentives:
- GAAP and IFRS have failed to provide rules for reliable financial statement reporting
- Stock analyst recommendations are not grounded in disciplined financial analysis
- Credit agencies have been set up to grossly fail in their responsibilities to investors and the public markets
- Utter lack of willingness of major research firms to employ the the most advanced forensic analysis available
We sought to provide investors and company analysts with a source of information that changed all that.
Many years later, our business model remains because little has changed on Wall Street.
- Corporate credit ratings remain years behind the fundamental underpinnings of company performance
- Stock analysts continue to make recommendations with deeply inherent biases
- Research firms have failed to break down the walls between credit, equity, and macroeconomic research
- The governing accounting bodies have created more leeway for mis-estimates and mis-classifications as financials have become unwieldy and overwhelming
The integrity of Valens Research is founded in our disciplined processes and analytics. No “star” analysts. No corporate advisory relationships. No-nonsense opinions and recommendations.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.