Cognizant Technology Solutions Valuation
Is CTSH undervalued compared to its fair value, analyst forecasts and its price relative to the market?
Valuation Score
5/6Valuation Score 5/6
Below Fair Value
Significantly Below Fair Value
Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Analyst Forecast
Share Price vs Fair Value
What is the Fair Price of CTSH when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.
Below Fair Value: CTSH ($77.57) is trading below our estimate of fair value ($127.51)
Significantly Below Fair Value: CTSH is trading below fair value by more than 20%.
Key Valuation Metric
Which metric is best to use when looking at relative valuation for CTSH?
Key metric: As CTSH is profitable we use its Price-To-Earnings Ratio for relative valuation analysis.
| What is CTSH's PE Ratio? | |
|---|---|
| PE Ratio | 17.1x |
| Earnings | US$2.25b |
| Market Cap | US$37.84b |
| Key Statistics | |
|---|---|
| Enterprise Value/Revenue | 1.9x |
| Enterprise Value/EBITDA | 10.9x |
| PEG Ratio | 1.8x |
Price to Earnings Ratio vs Peers
How does CTSH's PE Ratio compare to its peers?
| Company | Forward PE | Estimated Growth | Market Cap |
|---|---|---|---|
| Peer Average | 29.4x | ||
IT Gartner | 37.6x | 0.5% | US$39.9b |
EPAM EPAM Systems | 29.6x | 10.1% | US$12.9b |
DOX Amdocs | 19.4x | 15.5% | US$9.5b |
IBM International Business Machines | 31.1x | 10.5% | US$194.4b |
CTSH Cognizant Technology Solutions | 17.1x | 9.4% | US$37.8b |
Price-To-Earnings vs Peers: CTSH is good value based on its Price-To-Earnings Ratio (17.1x) compared to the peer average (29.4x).
Price to Earnings Ratio vs Industry
How does CTSH's PE Ratio compare vs other companies in the US IT Industry?
Price-To-Earnings vs Industry: CTSH is good value based on its Price-To-Earnings Ratio (17.1x) compared to the US IT industry average (44.3x).
Price to Earnings Ratio vs Fair Ratio
What is CTSH's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.
| Fair Ratio | |
|---|---|
| Current PE Ratio | 17.1x |
| Fair PE Ratio | 40.2x |
Price-To-Earnings vs Fair Ratio: CTSH is good value based on its Price-To-Earnings Ratio (17.1x) compared to the estimated Fair Price-To-Earnings Ratio (40.2x).
Analyst Price Targets
What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?
| Date | Share Price | Average 1Y Price Target | Dispersion | High | Low | 1Y Actual price | Analysts |
|---|---|---|---|---|---|---|---|
| Current | US$77.57 | US$83.87 +8.1% | 7.6% | US$100.00 | US$75.00 | n/a | 22 |
| Nov ’25 | US$74.61 | US$83.24 +11.6% | 7.7% | US$100.00 | US$75.00 | n/a | 22 |
| Oct ’25 | US$76.09 | US$82.31 +8.2% | 7.5% | US$94.00 | US$70.00 | n/a | 23 |
| Sep ’25 | US$77.77 | US$81.22 +4.4% | 7.8% | US$94.00 | US$70.00 | n/a | 24 |
| Aug ’25 | US$76.31 | US$78.92 +3.4% | 8.4% | US$94.00 | US$70.00 | n/a | 24 |
| Jul ’25 | US$67.74 | US$76.75 +13.3% | 9.5% | US$94.00 | US$65.00 | n/a | 24 |
| Jun ’25 | US$66.15 | US$77.25 +16.8% | 9.6% | US$94.00 | US$65.00 | n/a | 24 |
| May ’25 | US$65.37 | US$78.00 +19.3% | 9.8% | US$94.00 | US$64.00 | n/a | 25 |
| Apr ’25 | US$71.75 | US$79.12 +10.3% | 10.1% | US$94.00 | US$65.00 | n/a | 26 |
| Mar ’25 | US$78.61 | US$78.50 -0.1% | 11.3% | US$94.00 | US$65.00 | n/a | 26 |
| Feb ’25 | US$77.88 | US$76.23 -2.1% | 10.7% | US$94.00 | US$65.00 | n/a | 26 |
| Jan ’25 | US$75.53 | US$73.08 -3.2% | 10.2% | US$94.00 | US$60.00 | n/a | 26 |
| Dec ’24 | US$70.82 | US$71.77 +1.3% | 10.2% | US$94.00 | US$60.00 | n/a | 26 |
| Nov ’24 | US$64.96 | US$74.10 +14.1% | 10.1% | US$94.00 | US$61.00 | US$74.61 | 24 |
| Oct ’24 | US$67.74 | US$72.93 +7.7% | 10.8% | US$94.00 | US$61.00 | US$76.09 | 24 |
| Sep ’24 | US$71.73 | US$72.45 +1.0% | 9.8% | US$94.00 | US$61.00 | US$77.77 | 25 |
| Aug ’24 | US$65.85 | US$67.77 +2.9% | 12.1% | US$91.00 | US$54.00 | US$76.31 | 25 |
| Jul ’24 | US$65.28 | US$67.05 +2.7% | 13.9% | US$91.00 | US$53.00 | US$67.74 | 25 |
| Jun ’24 | US$62.19 | US$67.09 +7.9% | 14.1% | US$91.00 | US$53.00 | US$66.15 | 24 |
| May ’24 | US$59.84 | US$66.62 +11.3% | 15.7% | US$91.00 | US$49.00 | US$65.37 | 23 |
| Apr ’24 | US$60.93 | US$67.19 +10.3% | 15.3% | US$91.00 | US$49.00 | US$71.75 | 23 |
| Mar ’24 | US$62.37 | US$67.19 +7.7% | 15.3% | US$91.00 | US$49.00 | US$78.61 | 23 |
| Feb ’24 | US$68.84 | US$64.80 -5.9% | 16.7% | US$93.00 | US$45.00 | US$77.88 | 23 |
| Jan ’24 | US$57.19 | US$64.67 +13.1% | 16.0% | US$93.00 | US$45.00 | US$75.53 | 21 |
| Dec ’23 | US$62.62 | US$65.40 +4.4% | 16.6% | US$93.00 | US$45.00 | US$70.82 | 21 |
| Nov ’23 | US$62.53 | US$72.95 +16.7% | 15.6% | US$96.00 | US$55.00 | US$64.96 | 21 |
Analyst Forecast: Target price is less than 20% higher than the current share price.
Discover undervalued companies
Akamai Technologies
US$13.1b
Provides cloud computing, security, and content delivery services in the United States and internationally.
AKAM
US$87.96
7D
-0.9%
1Y
-22.6%
Dye & Durham
CA$1.2b
Provides cloud-based software and technology solutions for law firms, financial service institutions, sole-practitioner law firms, and government organizations in Canada, Australia, South Africa, Ireland, and the United Kingdom.
DYND.F
CA$13.30
7D
8.6%
1Y
39.5%
Capgemini
€26.4b
Engages in the provision of consulting, digital transformation, technology, and engineering services primarily in North America, France, the United Kingdom, Ireland, the rest of Europe, the Asia-Pacific, and Latin America.
CAPM.F
€159.66
7D
-2.8%
1Y
-18.8%