Home > Comparison > Technology > CTSH vs JKHY
The strategic rivalry between Cognizant Technology Solutions Corporation and Jack Henry & Associates, Inc. defines the current trajectory of the technology sector. Cognizant operates as a global, capital-intensive IT services provider with diversified digital offerings. In contrast, Jack Henry focuses on high-margin, specialized financial technology solutions for U.S. banks and credit unions. This analysis will assess which business model delivers a superior risk-adjusted return for a diversified portfolio.
Table of contents
Companies Overview
Cognizant and Jack Henry dominate distinct niches in the broad information technology services sector.
Cognizant Technology Solutions Corporation: Global Digital Transformation Partner
Cognizant leads as a professional services powerhouse offering consulting, technology, and outsourcing globally. It generates revenue through diverse segments including financial services, healthcare, and communications. In 2026, its strategy emphasizes AI-driven customer experience enhancement and operational improvements across industries like healthcare and digital payments.
Jack Henry & Associates, Inc.: Financial Services Technology Specialist
Jack Henry focuses on technology and payment processing solutions for US financial institutions. Its revenue stems from core banking platforms, payment services, and complementary software. The 2026 strategic focus targets expanding its suite of integrated banking applications and digital payment products tailored to community banks and credit unions.
Strategic Collision: Similarities & Divergences
While both operate in IT services, Cognizant pursues a broad global consulting and outsourcing model, contrasting with Jack Henry’s specialized, US-centric fintech ecosystem. Their battleground is digital transformation in financial services, where Cognizant offers scalable innovation and Jack Henry delivers niche banking software. Investors face a choice between expansive global reach and focused domain expertise.
Income Statement Comparison
This data dissects the core profitability and scalability of both corporate engines to reveal who dominates the bottom line:
| Metric | Cognizant Technology Solutions Corporation (CTSH) | Jack Henry & Associates, Inc. (JKHY) |
|---|---|---|
| Revenue | 21.11B | 2.38B |
| Cost of Revenue | 13.99B | 1.36B |
| Operating Expenses | 3.59B | 446M |
| Gross Profit | 7.12B | 1.01B |
| EBITDA | 4.17B | 801M |
| EBIT | 3.62B | 596M |
| Interest Expense | 37M | 10M |
| Net Income | 2.23B | 456M |
| EPS | 4.56 | 6.24 |
| Fiscal Year | 2025 | 2025 |
Income Statement Analysis: The Bottom-Line Duel
This income statement comparison will uncover how efficiently each company converts revenue into profit through margin and growth trends.
Cognizant Technology Solutions Corporation Analysis
Cognizant’s revenue grew steadily from $18.5B in 2021 to $21.1B in 2025, with net income rising modestly to $2.23B. Its gross margin remains healthy at 33.7%, while net margin hovers around 10.6%. The firm’s EBIT margin improved to 17.2%, reflecting better operational control despite a slight net margin dip last year.
Jack Henry & Associates, Inc. Analysis
Jack Henry’s revenue expanded from $1.76B in 2021 to $2.38B in 2025, alongside a robust net income increase to $456M. Gross margin stands out at 42.7%, with a superior net margin of 19.2%. EBIT margin climbed to 25.1%, showcasing strong operating leverage and consistent margin expansion over the period.
Margin Strength vs. Revenue Scale
Jack Henry clearly outperforms Cognizant in margin efficiency and net income growth. While Cognizant delivers larger top-line scale, Jack Henry’s superior profitability and margin expansion mark it as the fundamental winner. Investors seeking margin resilience and earnings momentum may find Jack Henry’s profile more attractive.
Financial Ratios Comparison
These vital ratios act as a diagnostic tool to expose the underlying fiscal health, valuation premiums, and capital efficiency of these companies:
| Ratios | Cognizant Technology Solutions Corporation (CTSH) | Jack Henry & Associates, Inc. (JKHY) |
|---|---|---|
| ROE | 14.85% | 21.39% |
| ROIC | 12.31% | 17.63% |
| P/E | 17.90 | 28.88 |
| P/B | 2.66 | 6.18 |
| Current Ratio | 2.34 | 1.27 |
| Quick Ratio | 2.34 | 1.27 |
| D/E | 0.10 | 0.00 |
| Debt-to-Assets | 7.61% | 0.00% |
| Interest Coverage | 95.38 | 54.49 |
| Asset Turnover | 1.02 | 0.78 |
| Fixed Asset Turnover | 14.02 | 10.75 |
| Payout Ratio | 27.35% | 36.13% |
| Dividend Yield | 1.53% | 1.25% |
| Fiscal Year | 2025 | 2025 |
Efficiency & Valuation Duel: The Vital Signs
Financial ratios act as a company’s DNA, exposing hidden risks and operational strengths that shape investor confidence and valuation.
Cognizant Technology Solutions Corporation
Cognizant posts a solid 14.85% ROE and 10.56% net margin, signaling consistent profitability. Its P/E of 17.9 and P/B of 2.66 suggest a fairly valued stock. The company maintains a healthy 2.34 current ratio and returns 1.53% dividend yield, balancing steady income with operational efficiency.
Jack Henry & Associates, Inc.
Jack Henry impresses with a 21.39% ROE and a strong 19.19% net margin, reflecting superior profitability. However, its P/E of 28.88 and P/B of 6.18 mark it as expensive relative to peers. The firm sustains a moderate 1.27 current ratio and offers a 1.25% dividend yield, indicating focused growth alongside shareholder returns.
Premium Valuation vs. Operational Safety
Jack Henry delivers higher profitability but trades at a stretched valuation, increasing risk. Cognizant offers a balanced valuation with solid returns and liquidity. Risk-averse investors may prefer Cognizant’s steadier profile, while growth-focused investors might tolerate Jack Henry’s premium price for higher ROE.
Which one offers the Superior Shareholder Reward?
I observe Cognizant (CTSH) yields 1.53% with a moderate payout ratio near 27%. It sustains dividends well, covering payouts 3.2x by free cash flow, and runs a steady buyback program. Jack Henry (JKHY) offers a 1.25% yield but pays out 36% of earnings, less conservatively. Its buybacks accelerate shareholder returns, driven by robust 8B FCF and strong margins. However, JKHY’s high valuation multiples and lower dividend coverage raise sustainability concerns. I conclude CTSH’s balanced yield, cash flow strength, and disciplined buybacks deliver a more sustainable and attractive total return profile in 2026.
Comparative Score Analysis: The Strategic Profile
The radar chart reveals the fundamental DNA and strategic trade-offs of Cognizant Technology Solutions Corporation and Jack Henry & Associates, Inc.:
Both companies score equally on overall, DCF, ROE, and ROA metrics, reflecting strong profitability and cash flow generation. Jack Henry holds a lower debt-to-equity risk profile with a score of 4 versus Cognizant’s 3, indicating better financial stability. However, Cognizant offers a more balanced valuation with moderate P/E and P/B scores of 3, compared to Jack Henry’s less favorable 2 in both, suggesting potential overvaluation for Jack Henry. Cognizant’s profile is more balanced; Jack Henry leverages its leverage advantage but faces valuation pressure.
Bankruptcy Risk: Solvency Showdown
The Altman Z-Score gap confirms Jack Henry’s superior solvency and financial safety margin over Cognizant in this economic cycle:
Jack Henry scores an exceptionally high 19.0, deeply in the safe zone, signaling very low bankruptcy risk. Cognizant’s 6.8 is also safely above the distress threshold but comparatively less robust. This differential highlights Jack Henry’s stronger resilience against financial distress in volatile markets.
Financial Health: Quality of Operations
Piotroski scores reveal Jack Henry’s peak operational health and internal financial strength advantage over Cognizant:
Jack Henry’s perfect 9 signals very strong fundamentals with no internal red flags. Cognizant’s 7 remains strong but indicates slightly weaker operational efficiency and profitability metrics. Investors should weigh Jack Henry’s superior financial quality when considering long-term stability.
How are the two companies positioned?
This section dissects the operational DNA of Cognizant and Jack Henry by comparing their revenue distribution and internal strengths and weaknesses. The goal is to confront their economic moats to reveal which model offers the most resilient, sustainable competitive advantage today.
Revenue Segmentation: The Strategic Mix
The following comparison dissects how Cognizant and Jack Henry diversify their revenue streams and reveals their primary sector bets:
Cognizant anchors its revenue in Healthcare at $5.9B and Financial Services at $5.7B, with a balanced spread across four segments. Jack Henry’s 2025 revenue pivots around Payments at $873M, Core at $739M, and Complementary at $675M, showing a narrower focus. Cognizant’s diversified mix reduces concentration risk and leverages multiple sector moats, while Jack Henry’s reliance on payments signals ecosystem lock-in but invites exposure to fintech disruption.
Strengths and Weaknesses Comparison
This table compares the strengths and weaknesses of Cognizant Technology Solutions Corporation (CTSH) and Jack Henry & Associates, Inc. (JKHY):
CTSH Strengths
- Diversified revenue across Communication, Financial, Healthcare, Products sectors
- Favorable net margin and ROIC indicating efficient capital use
- Strong current and quick ratios show liquidity strength
- Low debt levels with high interest coverage ratio
- Global presence with significant North America and Europe revenues
JKHY Strengths
- High profitability with favorable net margin, ROE, and ROIC
- Zero debt and strong interest coverage reinforce financial stability
- Favorable quick ratio and fixed asset turnover
- Clear focus on core, payments, and complementary segments
- Consistent revenue growth in niche banking and payments markets
CTSH Weaknesses
- Neutral ROE and WACC indicate average shareholder returns
- PB and PE ratios are neutral, limiting valuation appeal
- Moderate dividend yield compared to peers
- Global ratios show a mix of neutral metrics alongside favorable ones
JKHY Weaknesses
- Unfavorable PE and PB ratios suggest possible overvaluation risk
- Lower current ratio shows weaker short-term liquidity
- Asset turnover is neutral, indicating moderate operational efficiency
- Dividend yield remains neutral, limiting income appeal
While both companies exhibit strong financial health, CTSH benefits from broader diversification and global reach. JKHY excels in profitability but shows valuation and liquidity concerns. These factors shape their strategic positioning and risk profiles.
The Moat Duel: Analyzing Competitive Defensibility
A structural moat is the only reliable shield protecting long-term profits from relentless competition erosion. Let’s examine how these two firms defend their turf:
Cognizant Technology Solutions Corporation: Cost Advantage with Scale
Cognizant leverages cost advantages through global delivery and broad service diversification. Its 17% EBIT margin confirms operational efficiency, though a declining ROIC trend signals pressure ahead in 2026.
Jack Henry & Associates, Inc.: Intangible Assets and Switching Costs
Jack Henry’s moat stems from deep client integration and proprietary financial software. It boasts a 25% EBIT margin and growing ROIC, reflecting strong pricing power and sticky customer relationships poised to strengthen in 2026.
Cost Leadership vs. Customer Lock-in: The Moat Showdown
Jack Henry holds a deeper, more sustainable moat with expanding profitability and rising ROIC. Cognizant creates value but faces margin pressure, making Jack Henry better positioned to defend market share long-term.
Which stock offers better returns?
Over the past year, both stocks showed upward momentum with Cognizant Technology Solutions leading a modest but accelerating rise, while Jack Henry & Associates maintained steady gains amid higher volatility.
Trend Comparison
Cognizant Technology Solutions (CTSH) posted a 2.32% price increase over 12 months, marking a bullish trend with accelerating momentum and a moderate 5.77 standard deviation. The stock ranged between 64.26 and 90.7.
Jack Henry & Associates (JKHY) recorded a 1.41% price rise in the same period, also bullish with acceleration but higher volatility at 9.21 standard deviation. Its price fluctuated from 146.26 to 191.28.
CTSH delivered stronger market performance, showing a higher overall price gain and steadier volume dynamics compared to JKHY’s smaller increase and greater price variability.
Target Prices
Analysts present a bullish consensus for both Cognizant Technology Solutions Corporation and Jack Henry & Associates, Inc.
| Company | Target Low | Target High | Consensus |
|---|---|---|---|
| Cognizant Technology Solutions Corporation | 82 | 107 | 93.2 |
| Jack Henry & Associates, Inc. | 181 | 220 | 201.88 |
The consensus target prices for CTSH and JKHY exceed their current prices of 77.08 and 173.36, indicating expected upside potential supported by analyst confidence.
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How do institutions grade them?
Cognizant Technology Solutions Corporation Grades
The following table summarizes recent grades from reputable institutions for Cognizant:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| TD Cowen | Maintain | Hold | 2026-02-05 |
| Morgan Stanley | Maintain | Equal Weight | 2026-02-05 |
| RBC Capital | Maintain | Sector Perform | 2026-02-05 |
| Guggenheim | Maintain | Buy | 2026-01-28 |
| Citigroup | Maintain | Neutral | 2026-01-22 |
| Wells Fargo | Maintain | Overweight | 2026-01-14 |
| TD Cowen | Maintain | Hold | 2026-01-09 |
| UBS | Maintain | Neutral | 2025-12-08 |
| William Blair | Upgrade | Outperform | 2025-11-21 |
| UBS | Maintain | Neutral | 2025-10-30 |
Jack Henry & Associates, Inc. Grades
The following table summarizes recent grades from reputable institutions for Jack Henry & Associates:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Morgan Stanley | Maintain | Equal Weight | 2026-02-05 |
| DA Davidson | Maintain | Buy | 2026-02-04 |
| Wells Fargo | Maintain | Equal Weight | 2026-01-30 |
| DA Davidson | Maintain | Buy | 2026-01-29 |
| DA Davidson | Maintain | Buy | 2026-01-28 |
| UBS | Maintain | Neutral | 2026-01-08 |
| Wolfe Research | Upgrade | Outperform | 2026-01-08 |
| RBC Capital | Upgrade | Outperform | 2025-12-16 |
| Baird | Maintain | Neutral | 2025-12-15 |
| Keefe, Bruyette & Woods | Upgrade | Outperform | 2025-12-08 |
Which company has the best grades?
Jack Henry & Associates consistently receives more Buy and Outperform ratings than Cognizant. This suggests stronger analyst conviction, potentially influencing investor confidence and stock momentum more positively for Jack Henry.
Risks specific to each company
The following categories identify the critical pressure points and systemic threats facing both firms in the 2026 market environment:
1. Market & Competition
Cognizant Technology Solutions Corporation
- Faces intense competition in IT services with pricing pressure and innovation demands.
Jack Henry & Associates, Inc.
- Operates in a niche financial tech market with less direct competition but must innovate continuously.
2. Capital Structure & Debt
Cognizant Technology Solutions Corporation
- Maintains low debt levels (D/E 0.1) with strong interest coverage, minimizing financial risk.
Jack Henry & Associates, Inc.
- Virtually no debt, resulting in a very conservative capital structure and low financial risk.
3. Stock Volatility
Cognizant Technology Solutions Corporation
- Beta near 1 (0.957) suggests stock moves closely with the market, moderate volatility.
Jack Henry & Associates, Inc.
- Lower beta (0.71) indicates less sensitivity to market swings, offering more stability.
4. Regulatory & Legal
Cognizant Technology Solutions Corporation
- Global operations expose it to complex regulatory environments and data privacy laws.
Jack Henry & Associates, Inc.
- Primarily US-focused, facing stringent financial regulations but less international legal complexity.
5. Supply Chain & Operations
Cognizant Technology Solutions Corporation
- Large global workforce and diverse service segments increase operational complexity and risk.
Jack Henry & Associates, Inc.
- Smaller employee base with focused service offerings reduces operational risks but less scalability.
6. ESG & Climate Transition
Cognizant Technology Solutions Corporation
- Faces pressure to meet evolving ESG standards, particularly in global supply chain and energy use.
Jack Henry & Associates, Inc.
- ESG risks are lower due to smaller footprint but must manage data security and governance tightly.
7. Geopolitical Exposure
Cognizant Technology Solutions Corporation
- Significant international presence exposes it to geopolitical tensions and cross-border restrictions.
Jack Henry & Associates, Inc.
- US-centric operations limit geopolitical risks but increase exposure to domestic policy changes.
Which company shows a better risk-adjusted profile?
Jack Henry & Associates faces lower market volatility, zero debt, and a focused regulatory environment, yielding a more stable risk profile. Cognizant’s global scale and diversified operations bring higher operational and geopolitical risks despite strong financial health. Jack Henry’s very strong Piotroski score and safe-zone Altman Z-score reinforce its better risk-adjusted standing. However, Cognizant’s leverage and capital structure remain solid, mitigating its broader risk exposure. The key risk for Cognizant is geopolitical and regulatory complexity; for Jack Henry, it is the premium valuation that may pressure returns.
Final Verdict: Which stock to choose?
Cognizant Technology Solutions Corporation (CTSH) excels as a cash-generating engine with solid operational efficiency and a robust balance sheet. Its main point of vigilance is a slightly declining return on invested capital, signaling potential margin pressures ahead. CTSH suits portfolios focused on steady operational cash flow and moderate growth.
Jack Henry & Associates, Inc. (JKHY) boasts a strategic moat rooted in strong recurring revenue and impressive profitability metrics. Its growing return on invested capital confirms a sustainable competitive advantage. Compared to CTSH, JKHY offers a higher growth profile but commands a premium valuation. It fits well within GARP (Growth at a Reasonable Price) portfolios seeking stability with upside.
If you prioritize resilient cash flow and operational efficiency, CTSH is the compelling choice due to its value creation with conservative leverage. However, if you seek a durable moat combined with accelerating profitability, JKHY offers better stability and growth potential, albeit at a higher price. Both present favorable cases but cater to distinct investor profiles.
Disclaimer: Investment carries a risk of loss of initial capital. The past performance is not a reliable indicator of future results. Be sure to understand risks before making an investment decision.
Go Further
I encourage you to read the complete analyses of Cognizant Technology Solutions Corporation and Jack Henry & Associates, Inc. to enhance your investment decisions:
