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$31.55 -0.08 (-0.25%)
5/16/2008 4:00 PM

Cognizant Technology Solutions Corp. (CTSH)

CAPS Rating:
*****

The Company is a provider of custom IT consulting and technology services as well as outsourcing services for Global 2000 companies located in North America, Europe and Asia.

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Avatar fatdiesel (93.14) Submitted: 12/14/06 1:53 PM : Underperform Start Price: $40.40 CTSH Score: 21.69

Well, time for an All-Star contrarian! I don't like a company when directors are ercising options and selling shares.
This stock is overpriced! The P/E. Forward P/E, Price/Book and P/CF and P/S are way above the industry. I ususally discount these indicators in small caps, but Cognizant is not small potatoes. Another thing to worry about is competition in India for talent and also as Indian wages rise the margins wil begin to shrink. One earnings miss might make this stock worth buying, though. This might be a great company to invest in, but not at this price.

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Avatar keerthiprasad (< 20) Submitted: 6/26/07 1:45 PM

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im with you....also this company's management is definitely in need of help. They are a mess and desperately need outsiders. These days they are flush with revenues, but when times get tough Cognizant is going to get hammered.

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Avatar SimonJacques (< 20) Submitted: 2/26/08 12:28 AM

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Yes your post applies back when Cognizant had a PE in the 40s.
From this point...a PE of around 25 with at least 25% increase in EPS [vs over 40% over the last 6 years] over the next 4 years is reasonable for CTSH.
This equals a good return!!! It is no-brainer in my opinion.
This is a well run company that is positioned to profit from a downturn in the U.S economy through the outsourcing of back-office operations to India. Few companies are in this position.
Based on this fact alone, it is a good company to be invested in right now with fears of a recession looming.
Indications are wages will not appreciate much in 2008.
While analysts obsess about margin-erosion and ruppe appreciation, this company and other outsourcers continue to grow revenue and profits very strongly year after year.
I cant see that changing anytime soon

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