TaskUs (NASDAQ:TASK) and Cognizant Technology Solutions (NASDAQ:CTSH) Critical Analysis

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

Volatility and Risk

TaskUs has a beta of 1.88, indicating that its stock price is 88% more volatile than the S&P 500. Comparatively, Cognizant Technology Solutions has a beta of 0.81, indicating that its stock price is 19% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
TaskUs	8.70%	24.93%	12.12%
Cognizant Technology Solutions	10.41%	17.50%	12.94%

Valuation and Earnings

This table compares TaskUs and Cognizant Technology Solutions”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
TaskUs	$1.18 billion	0.47	$102.28 million	$1.14	5.37
Cognizant Technology Solutions	$21.11 billion	1.17	$2.23 billion	$4.60	11.37

Cognizant Technology Solutions has higher revenue and earnings than TaskUs. TaskUs 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.

Institutional and Insider Ownership

44.6% of TaskUs shares are owned by institutional investors. Comparatively, 92.4% of Cognizant Technology Solutions shares are owned by institutional investors. 31.9% of TaskUs shares are owned by company insiders. Comparatively, 0.4% of Cognizant Technology Solutions shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Recommendations

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
TaskUs	2	4	1	1	2.13
Cognizant Technology Solutions	0	12	10	0	2.45

TaskUs presently has a consensus target price of $11.20, indicating a potential upside of 83.01%. Cognizant Technology Solutions has a consensus target price of $73.00, indicating a potential upside of 39.53%. Given TaskUs’ higher possible upside, analysts plainly believe TaskUs is more favorable than Cognizant Technology Solutions.

Summary

Cognizant Technology Solutions beats TaskUs on 10 of the 15 factors compared between the two stocks.

About TaskUs

TaskUs, Inc. provides digital outsourcing services for companies in Philippines, the United States, India, and internationally. It offers digital customer experience that consists of omni-channel customer care services primarily delivered through non-voice digital channels; and other solutions, including experience and customer care services for new product or market launches, and customer acquisition solutions. The company also provides trust and safety solutions, such as review and disposition of user and advertiser generated visual, text, and audio content, which include removal or labeling of policy violating, and offensive or misleading content, as well as risk management, compliance, identity management, and fraud services; and artificial intelligence (AI) solutions that consist of data labeling, annotation, context relevance, and transcription services for training and tuning machine learning algorithms that enables to develop AI systems. It serves clients in various industry segments comprising e-commerce, FinTech, food delivery and ride sharing, gaming, technology, HealthTech, social media, and streaming media. The company was formerly known as TU TopCo, Inc. and changed its name to TaskUs, Inc. in December 2020. TaskUs, Inc. was founded in 2008 and is headquartered in New Braunfels, Texas.

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.