Discounted Cash Flow (DCF) Analysis Unlevered
Cognizant Technology Solutions Corp... (CTSH)
$70.26
+2.88 (+4.27%)
All numbers are in Millions, Currency in USD
Operating Data
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 (%) | ||||||||||
| EBITDA | 3,123 | 3,324 | 3,037 | 2,679 | 3,413 | 3,694.94 | 3,910.35 | 4,138.31 | 4,379.57 | 4,634.89 |
| EBITDA (%) | ||||||||||
| EBIT | 2,680 | 2,826 | 2,511 | 2,120 | 2,839 | 3,081.04 | 3,260.65 | 3,450.74 | 3,651.91 | 3,864.81 |
| EBIT (%) | ||||||||||
| Depreciation | 443 | 498 | 526 | 559 | 574 | 613.91 | 649.70 | 687.57 | 727.66 | 770.08 |
| Depreciation (%) |
Balance Sheet Data
Year A/P | 2017 Actual | 2018 Actual | 2019 Actual | 2020 Actual | 2021 Actual | 2022 Projected | 2023 Projected | 2024 Projected | 2025 Projected | 2026 Projected |
| Total Cash | 5,056 | 4,511 | 3,424 | 2,724 | 2,719 | 4,448.59 | 4,707.93 | 4,982.39 | 5,272.85 | 5,580.25 |
|---|---|---|---|---|---|---|---|---|---|---|
| Total Cash (%) | ||||||||||
| Account Receivables | 3,222 | 3,257 | 3,256 | 3,087 | 3,557 | 3,882.42 | 4,108.76 | 4,348.29 | 4,601.78 | 4,870.06 |
| Account Receivables (%) | ||||||||||
| Inventories | - | - | - | - | - | - | - | - | - | - |
| Inventories (%) | ||||||||||
| Accounts Payable | 210 | 215 | 239 | 389 | 361 | 331.47 | 350.80 | 371.25 | 392.89 | 415.79 |
| Accounts Payable (%) | ||||||||||
| Capital Expenditure | -284 | -377 | -392 | -398 | -279 | -410.87 | -434.82 | -460.17 | -487 | -515.39 |
| Capital Expenditure (%) |
Weighted Average Cost Of Capital
| Share price | $ 70.26 |
|---|---|
| Beta | 1.108 |
| 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 | 8.357 |
| Total Debt | 1,642 |
| Total Equity | 36,956.76 |
| Total Capital | 38,598.76 |
| Debt Weighting | 4.25 |
| Equity Weighting | 95.75 |
| Wacc |
Build Up Free Cash
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 |
|---|---|---|---|---|---|---|---|---|---|---|
| EBITDA | 3,123 | 3,324 | 3,037 | 2,679 | 3,413 | 3,694.94 | 3,910.35 | 4,138.31 | 4,379.57 | 4,634.89 |
| EBIT | 2,680 | 2,826 | 2,511 | 2,120 | 2,839 | 3,081.04 | 3,260.65 | 3,450.74 | 3,651.91 | 3,864.81 |
| Tax Rate | 43.35% | 24.88% | 27.57% | 33.59% | 24.41% | 30.76% | 30.76% | 30.76% | 30.76% | 30.76% |
| EBIAT | 1,518.16 | 2,122.78 | 1,818.82 | 1,407.94 | 2,146.07 | 2,133.33 | 2,257.69 | 2,389.31 | 2,528.60 | 2,676.01 |
| Depreciation | 443 | 498 | 526 | 559 | 574 | 613.91 | 649.70 | 687.57 | 727.66 | 770.08 |
| Accounts Receivable | - | -35 | 1 | 169 | -470 | -325.42 | -226.34 | -239.53 | -253.49 | -268.27 |
| Inventories | - | - | - | - | - | - | - | - | - | - |
| Accounts Payable | - | 5 | 24 | 150 | -28 | -29.53 | 19.32 | 20.45 | 21.64 | 22.90 |
| Capital Expenditure | -284 | -377 | -392 | -398 | -279 | -410.87 | -434.82 | -460.17 | -487 | -515.39 |
| UFCF | 1,677.16 | 2,213.78 | 1,977.82 | 1,887.94 | 1,943.07 | 1,981.41 | 2,265.56 | 2,397.63 | 2,537.41 | 2,685.33 |
| WACC | ||||||||||
| PV UFCF | 1,834.30 | 1,941.63 | 1,902.26 | 1,863.69 | 1,825.90 | |||||
| SUM PV UFCF | 9,367.79 |
Terminal Value
| Growth in perpetuity method: | |
|---|---|
| Long-term growth rate | |
| WACC (%) | 8.02 |
| Free cash flow (t + 1) | 2,739.04 |
| Terminal Value | 45,499.01 |
| Present Value of Terminal Value | 30,937.21 |
Intrinsic Value
| Enterprise Value | 40,304.99 |
|---|---|
| Net Debt | -150 |
| Equity Value | 40,454.99 |
| Shares Outstanding | 526 |
| Equity Value Per Share | 76.91 |