Discounted Cash Flow (DCF) Analysis Levered

Cognizant Technology Solutions Corp... (CTSH)

$67.84

-0.36 (-0.53%)

All numbers are in Millions, Currency in USD

Stock DCF: 79.75 | 67.84 | undervalue

Free Cash Flow

Year A/P	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Actual	2023 Projected	2024 Projected	2025 Projected	2026 Projected	2027 Projected
Revenue	16,125	16,783	16,652	18,507	19,428	20,371.05	21,359.88	22,396.71	23,483.87	24,623.80
Revenue (%)
Operating Cash Flow	2,592	2,499	3,299	2,495	2,568	3,156.51	3,309.73	3,470.39	3,638.84	3,815.47
Operating Cash Flow (%)
Capital Expenditure	-377	-392	-398	-279	-332	-418.84	-439.17	-460.49	-482.84	-506.27
Capital Expenditure (%)
Free Cash Flow	2,215	2,107	2,901	2,216	2,236	2,737.67	2,870.56	3,009.90	3,156	3,309.20

Weighted Average Cost Of Capital

Share price	$ 67.84
Beta	1.091
Diluted Shares Outstanding	519
Cost of Debt
Tax Rate	24.07
After-tax Cost of Debt	0.94%
Risk-Free Rate
Market Risk Premium
Cost of Equity	9.745
Total Debt	1,534
Total Equity	35,208.96
Total Capital	36,742.96
Debt Weighting	4.17
Equity Weighting	95.83
Wacc

Build Up Free Cash Flow

Year A/P	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Actual	2023 Projected	2024 Projected	2025 Projected	2026 Projected	2027 Projected
Revenue	16,125	16,783	16,652	18,507	19,428	20,371.05	21,359.88	22,396.71	23,483.87	24,623.80
Operating Cash Flow	2,592	2,499	3,299	2,495	2,568	3,156.51	3,309.73	3,470.39	3,638.84	3,815.47
Capital Expenditure	-377	-392	-398	-279	-332	-418.84	-439.17	-460.49	-482.84	-506.27
Free Cash Flow	2,215	2,107	2,901	2,216	2,236	2,737.67	2,870.56	3,009.90	3,156	3,309.20
WACC
PV LFCF						2,502.90	2,399.34	2,300.06	2,204.88	2,113.65
SUM PV LFCF										11,520.83

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	9.38
Free cash flow (t + 1)	3,375.38
Terminal Value	45,736.90
Present Value of Terminal Value	29,213.06

Intrinsic Value

Enterprise Value	40,733.89
Net Debt	-657
Equity Value	41,390.89
Shares Outstanding	519
Equity Value Per Share	79.75