Head to Head Review: Cognizant Technology Solutions (NASDAQ:CTSH) versus HashiCorp (NASDAQ:HCP)

HashiCorp (NASDAQ:HCPGet Free Report) and Cognizant Technology Solutions (NASDAQ:CTSHGet Free Report) are both computer and technology companies, but which is the superior stock? We will compare the two businesses based on the strength of their valuation, institutional ownership, analyst recommendations, profitability, dividends, risk and earnings.

Dividends

HashiCorp pays an annual dividend of $1.48 per share and has a dividend yield of 4.5%. Cognizant Technology Solutions pays an annual dividend of $1.20 per share and has a dividend yield of 1.8%. HashiCorp pays out -151.0% of its earnings in the form of a dividend. Cognizant Technology Solutions pays out 28.8% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Cognizant Technology Solutions has raised its dividend for 5 consecutive years. HashiCorp is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation and Earnings

This table compares HashiCorp and Cognizant Technology Solutions’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
HashiCorp $583.14 million 11.26 -$190.67 million ($0.98) -33.58
Cognizant Technology Solutions $19.35 billion 1.74 $2.13 billion $4.16 16.31

Cognizant Technology Solutions has higher revenue and earnings than HashiCorp. HashiCorp is trading at a lower price-to-earnings ratio than Cognizant Technology Solutions, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares HashiCorp and Cognizant Technology Solutions’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
HashiCorp -32.70% -15.58% -11.55%
Cognizant Technology Solutions 10.84% 17.48% 12.58%

Volatility & Risk

HashiCorp has a beta of 1.25, suggesting that its stock price is 25% more volatile than the S&P 500. Comparatively, Cognizant Technology Solutions has a beta of 1.08, suggesting that its stock price is 8% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and price targets for HashiCorp and Cognizant Technology Solutions, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
HashiCorp 0 10 4 0 2.29
Cognizant Technology Solutions 1 13 3 0 2.12

HashiCorp presently has a consensus target price of $30.77, suggesting a potential downside of 6.50%. Cognizant Technology Solutions has a consensus target price of $75.67, suggesting a potential upside of 11.49%. Given Cognizant Technology Solutions’ higher probable upside, analysts clearly believe Cognizant Technology Solutions is more favorable than HashiCorp.

Insider and Institutional Ownership

87.8% of HashiCorp shares are held by institutional investors. Comparatively, 92.4% of Cognizant Technology Solutions shares are held by institutional investors. 26.1% of HashiCorp shares are held by company insiders. Comparatively, 0.3% of Cognizant Technology Solutions shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Summary

Cognizant Technology Solutions beats HashiCorp on 10 of the 17 factors compared between the two stocks.

About HashiCorp

(Get Free Report)

HashiCorp, Inc. engages in the provision of multi-cloud infrastructure automation solutions worldwide. The company offers infrastructure provisioning products, including Terraform, that enables IT operations teams to apply an Infrastructure-as-Code approach, where processes and configuration required to support applications are codified and automated instead of being manual and ticket-based; Packer, that provides a consistent way to define the process of transforming the raw source inputs into a production worthy artifact, across any environment or packaging format; and Vagrant, that allows teams to define how development environments are set up. It also provides security products, such as Vault, a secrets management and data protection product, which enables security teams to apply policies based on application and user identity to govern access to credentials and secure sensitive data; and Boundary, that applies an identity-based approach to privileged access management and unifies the controls to a single system. In addition, the company offers Consul, an application-centric networking automation product that enables practitioners to manage application traffic, security teams to secure and restrict access between applications, and operations teams to automate the underlying network infrastructure; Nomad, a scheduler and workload orchestrator, which provides practitioners with a self-service interface to manage the application lifecycle; and Waypoint, an application delivery product that provides a developer-focused workflow for the build, deploy, and release process. Further, it provides HashiCorp Cloud Platform, a fully-managed cloud platform for multiple products to accelerate enterprise cloud migration by addressing resource and skills gaps, improving operational efficiency, and speeding up deployment time for customers. The company was incorporated in 2012 and is headquartered in San Francisco, California.

About Cognizant Technology Solutions

(Get Free Report)

Cognizant Technology Solutions Corporation, a professional services company, provides consulting and technology, and outsourcing services in North America, Europe, and internationally. It operates through four segments: Financial Services, Health Sciences, Products and Resources, and Communications, Media and Technology. The company provides customer experience, robotic process automation, analytics, and AI services in areas, such as digital lending, fraud detection, and next generation payments; the shift towards consumerism, outcome-based contracting, digital health, delivering integrated seamless, omni-channel, and patient-centered experience; and services that drive operational improvements in areas, such as clinical development, pharmacovigilance, and manufacturing, as well as claims processing, enrollment, membership, and billing to healthcare providers and payers, and life sciences companies, including pharmaceutical, biotech, and medical device companies. It offers solution to manufacturers, automakers, retailers and travel and hospitality companies, as well as companies providing logistics, energy and utility services; and digital content, business process improvement, technology modernization, and the creation of unified and compelling user experience services to communications, media and entertainment, education, and information services and technology companies. The company was incorporated in 1988 and is headquartered in Teaneck, New Jersey.

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