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
Stock DCF: 76.91 | 70.26 | undervalue

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 14,81016,12516,78316,65218,50719,585.9120,727.7221,936.1023,214.9224,568.29
Revenue (%)
EBITDA 3,1233,3243,0372,6793,4133,694.943,910.354,138.314,379.574,634.89
EBITDA (%)
EBIT 2,6802,8262,5112,1202,8393,081.043,260.653,450.743,651.913,864.81
EBIT (%)
Depreciation 443498526559574613.91649.70687.57727.66770.08
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 5,0564,5113,4242,7242,7194,448.594,707.934,982.395,272.855,580.25
Total Cash (%)
Account Receivables 3,2223,2573,2563,0873,5573,882.424,108.764,348.294,601.784,870.06
Account Receivables (%)
Inventories ----------
Inventories (%)
Accounts Payable 210215239389361331.47350.80371.25392.89415.79
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 14,81016,12516,78316,65218,50719,585.9120,727.7221,936.1023,214.9224,568.29
EBITDA 3,1233,3243,0372,6793,4133,694.943,910.354,138.314,379.574,634.89
EBIT 2,6802,8262,5112,1202,8393,081.043,260.653,450.743,651.913,864.81
Tax Rate 43.35%24.88%27.57%33.59%24.41%30.76%30.76%30.76%30.76%30.76%
EBIAT 1,518.162,122.781,818.821,407.942,146.072,133.332,257.692,389.312,528.602,676.01
Depreciation 443498526559574613.91649.70687.57727.66770.08
Accounts Receivable --351169-470-325.42-226.34-239.53-253.49-268.27
Inventories ----------
Accounts Payable -524150-28-29.5319.3220.4521.6422.90
Capital Expenditure -284-377-392-398-279-410.87-434.82-460.17-487-515.39
UFCF 1,677.162,213.781,977.821,887.941,943.071,981.412,265.562,397.632,537.412,685.33
WACC
PV UFCF 1,834.301,941.631,902.261,863.691,825.90
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