HashiCorp (NASDAQ:HCP) vs. Cognizant Technology Solutions (NASDAQ:CTSH) Financial Analysis

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

Analyst Ratings

This is a summary of recent recommendations and price targets for Cognizant Technology Solutions and HashiCorp, as provided by MarketBeat.

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

Cognizant Technology Solutions presently has a consensus price target of $75.67, indicating a potential upside of 13.27%. HashiCorp has a consensus price target of $30.77, indicating a potential downside of 6.08%. Given Cognizant Technology Solutions’ higher possible upside, equities analysts clearly believe Cognizant Technology Solutions is more favorable than HashiCorp.

Risk & Volatility

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

Profitability

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

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

Earnings & Valuation

This table compares Cognizant Technology Solutions and HashiCorp’s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cognizant Technology Solutions	$19.35 billion	1.72	$2.13 billion	$4.16	16.06
HashiCorp	$583.14 million	11.21	-$190.67 million	($0.98)	-33.43

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.

Dividends

Cognizant Technology Solutions pays an annual dividend of $1.20 per share and has a dividend yield of 1.8%. HashiCorp pays an annual dividend of $1.48 per share and has a dividend yield of 4.5%. Cognizant Technology Solutions pays out 28.8% of its earnings in the form of a dividend. HashiCorp pays out -151.0% 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 increased its dividend for 5 consecutive years. HashiCorp is clearly the better dividend stock, given its higher yield and lower payout ratio.

Insider and Institutional Ownership

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

Summary

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

About Cognizant Technology Solutions

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.

About HashiCorp

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.