Comparing C3.ai (NYSE:AI) and Cognizant Technology Solutions (NASDAQ:CTSH)

Cognizant Technology Solutions (NASDAQ:CTSH) and C3.ai (NYSE:AI) are both computer and technology companies, but which is the superior business? We will compare the two businesses based on the strength of their profitability, institutional ownership, earnings, valuation, dividends, analyst recommendations and risk.

Risk and Volatility

Cognizant Technology Solutions has a beta of 0.96, meaning that its stock price is 4% less volatile than the S&P 500. Comparatively, C3.ai has a beta of 1.97, meaning that its stock price is 97% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Cognizant Technology Solutions and C3.ai, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cognizant Technology Solutions	0	14	7	0	2.33
C3.ai	5	7	2	1	1.93

Cognizant Technology Solutions currently has a consensus price target of $86.00, suggesting a potential upside of 1.49%. C3.ai has a consensus price target of $21.92, suggesting a potential upside of 67.94%. Given C3.ai’s higher possible upside, analysts plainly believe C3.ai is more favorable than Cognizant Technology Solutions.

Earnings & Valuation

This table compares Cognizant Technology Solutions and C3.ai”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cognizant Technology Solutions	$19.74 billion	2.07	$2.24 billion	$4.31	19.66
C3.ai	$389.06 million	4.72	-$288.70 million	($2.83)	-4.61

Cognizant Technology Solutions has higher revenue and earnings than C3.ai. C3.ai 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 Cognizant Technology Solutions and C3.ai’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Cognizant Technology Solutions	10.20%	17.00%	12.61%
C3.ai	-108.06%	-46.51%	-37.91%

Institutional and Insider Ownership

92.4% of Cognizant Technology Solutions shares are owned by institutional investors. Comparatively, 39.0% of C3.ai shares are owned by institutional investors. 0.3% of Cognizant Technology Solutions shares are owned by company insiders. Comparatively, 26.5% of C3.ai shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Summary

Cognizant Technology Solutions beats C3.ai on 10 of the 15 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 C3.ai

C3.ai, Inc. operates as an enterprise artificial intelligence (AI) software company in North America, Europe, the Middle East, Africa, the Asia Pacific, and internationally. The company provides C3 AI platform, an application development and runtime environment that enables customers to design, develop, and deploy enterprise AI applications; C3 AI Ex Machina for analysis-ready data; C3 AI CRM, an industry specific customer relationship management solution; and C3 Generative AI Product Suite that enables to locate, retrieve, and present information. It also offers C3 AI applications, including C3 AI Inventory Optimization, a solution to optimize raw material, in-process, and finished goods inventory levels; C3 AI Supply Network Risk, which identifies emerging inbound and outbound risks across the network; C3 AI Sustainability Suite, which helps to decrease greenhouse gas emission; C3 AI Production Schedule Optimization, a solution for scheduling production; C3 AI Financial Services Suite, which helps to minimize compliance risks; and C3 AI Energy Management solution. In addition, it offers integrated turnkey enterprise AI applications for oil and gas, chemicals, utilities, manufacturing, financial services, defense, intelligence, aerospace, healthcare, and telecommunications market. It has strategic partnerships with Baker Hughes in the areas of oil and gas market; Booz Allen to provide solutions to government, defense, and intelligence sectors; Raytheon; and AWS, Google, and Microsoft. The company was formerly known as C3 IoT, Inc. and changed its name to C3.ai, Inc. in June 2019. C3.ai, Inc. was incorporated in 2009 and is headquartered in Redwood City, California.