Discounted Cash Flow (DCF) Analysis Levered

Cognizant Technology Solutions Corp... (CTSH)

$72.74

+1.05 (+1.46%)

All numbers are in Millions, Currency in USD

Stock DCF: 105.38 | 72.74 | undervalue

Free Cash Flow

Year A/P	2017 Actual	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Projected	2023 Projected	2024 Projected	2025 Projected	2026 Projected
Revenue	14,810	16,125	16,783	16,652	18,507	19,585.91	20,727.72	21,936.10	23,214.92	24,568.29
Revenue (%)
Operating Cash Flow	2,407	2,592	2,499	3,299	2,495	3,153.72	3,337.57	3,532.14	3,738.06	3,955.98
Operating Cash Flow (%)
Capital Expenditure	-284	-377	-392	-398	-279	-410.87	-434.82	-460.17	-487	-515.39
Capital Expenditure (%)
Free Cash Flow	2,123	2,215	2,107	2,901	2,216	2,742.85	2,902.75	3,071.97	3,251.06	3,440.59

Weighted Average Cost Of Capital

Share price	$ 72.74
Beta	1.103
Diluted Shares Outstanding	526
Cost of Debt
Tax Rate	24.41
After-tax Cost of Debt	0.42%
Risk-Free Rate
Market Risk Premium
Cost of Equity	7.961
Total Debt	1,642
Total Equity	38,261.24
Total Capital	39,903.24
Debt Weighting	4.11
Equity Weighting	95.89
Wacc

Build Up Free Cash Flow

Year A/P	2017 Actual	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Projected	2023 Projected	2024 Projected	2025 Projected	2026 Projected
Revenue	14,810	16,125	16,783	16,652	18,507	19,585.91	20,727.72	21,936.10	23,214.92	24,568.29
Operating Cash Flow	2,407	2,592	2,499	3,299	2,495	3,153.72	3,337.57	3,532.14	3,738.06	3,955.98
Capital Expenditure	-284	-377	-392	-398	-279	-410.87	-434.82	-460.17	-487	-515.39
Free Cash Flow	2,123	2,215	2,107	2,901	2,216	2,742.85	2,902.75	3,071.97	3,251.06	3,440.59
WACC
PV LFCF						2,547.93	2,504.85	2,462.49	2,420.85	2,379.92
SUM PV LFCF										12,316.04

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	7.65
Free cash flow (t + 1)	3,509.40
Terminal Value	62,113.25
Present Value of Terminal Value	42,964.93

Intrinsic Value

Enterprise Value	55,280.97
Net Debt	-150
Equity Value	55,430.97
Shares Outstanding	526
Equity Value Per Share	105.38