Cognizant Technology Solutions Corporation

NasdaqGS:CTSH Stock Report

Market Cap: US$41.5b

Cognizant Technology Solutions Valuation

Is CTSH undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation 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.

Discounted Cash Flow
Simply Wall St
US$173.77
Fair Value
49.9% undervalued intrinsic discount
23
Number of Analysts

Below Fair Value: CTSH ($87.09) is trading below our estimate of fair value ($173.77)

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.

The above table shows the Price to Earnings ratio for CTSH. This is calculated by dividing CTSH's market cap by their current earnings.
What is CTSH's PE Ratio?
PE Ratio19.3x
EarningsUS$2.24b
Market CapUS$41.45b

Price to Earnings Ratio vs Peers

How does CTSH's PE Ratio compare to its peers?

The above table shows the PE ratio for CTSH vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PEEstimated GrowthMarket Cap
Peer Average31.2x
IT Gartner
32.9x-5.5%US$41.7b
EPAM EPAM Systems
33.4x10.3%US$14.6b
DOX Amdocs
19.7x11.3%US$9.9b
IBM International Business Machines
39x12.5%US$243.5b
CTSH Cognizant Technology Solutions
19.3x8.0%US$41.5b

Price-To-Earnings vs Peers: CTSH is good value based on its Price-To-Earnings Ratio (19.3x) compared to the peer average (31.2x).

Price to Earnings Ratio vs Industry

How does CTSH's PE Ratio compare vs other companies in the US IT Industry?

4 CompaniesPrice / EarningsEstimated GrowthMarket Cap
TAOP Taoping
0.8xn/aUS$1.70m
GTCH GBT Technologies
0.07xn/aUS$1.68m
DLTI DLT Resolution
0.4xn/aUS$358.69k
COWI CarbonMeta Technologies
0.06xn/aUS$21.99k
No more companies available in this PE range
CTSH 19.3xIndustry Avg. 45.4xNo. of Companies5PE020406080100+
4 CompaniesEstimated GrowthMarket Cap
No more companies

Price-To-Earnings vs Industry: CTSH is good value based on its Price-To-Earnings Ratio (19.3x) compared to the US IT industry average (45.4x).

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.

CTSH PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio19.3x
Fair PE Ratio37.7x

Price-To-Earnings vs Fair Ratio: CTSH is good value based on its Price-To-Earnings Ratio (19.3x) compared to the estimated Fair Price-To-Earnings Ratio (37.8x).

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

The above table shows the analyst CTSH forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
CurrentUS$87.09
US$86.44
-0.7%
8.1%US$100.00US$71.00n/a23
Jan ’26US$76.90
US$84.92
+10.4%
7.6%US$100.00US$75.00n/a23
Dec ’25US$80.49
US$84.05
+4.4%
7.5%US$100.00US$75.00n/a23
Nov ’25US$74.61
US$83.44
+11.8%
7.6%US$100.00US$75.00n/a23
Oct ’25US$76.09
US$82.31
+8.2%
7.5%US$94.00US$70.00n/a23
Sep ’25US$77.77
US$81.22
+4.4%
7.8%US$94.00US$70.00n/a24
Aug ’25US$76.31
US$78.92
+3.4%
8.4%US$94.00US$70.00n/a24
Jul ’25US$67.74
US$76.75
+13.3%
9.5%US$94.00US$65.00n/a24
Jun ’25US$66.15
US$77.25
+16.8%
9.6%US$94.00US$65.00n/a24
May ’25US$65.37
US$78.00
+19.3%
9.8%US$94.00US$64.00n/a25
Apr ’25US$71.75
US$79.12
+10.3%
10.1%US$94.00US$65.00n/a26
Mar ’25US$78.61
US$78.50
-0.1%
11.3%US$94.00US$65.00n/a26
Feb ’25US$77.88
US$76.23
-2.1%
10.7%US$94.00US$65.00US$82.6126
Jan ’25US$75.53
US$73.08
-3.2%
10.2%US$94.00US$60.00US$76.9026
Dec ’24US$70.82
US$71.77
+1.3%
10.2%US$94.00US$60.00US$80.4926
Nov ’24US$64.96
US$74.10
+14.1%
10.1%US$94.00US$61.00US$74.6124
Oct ’24US$67.74
US$72.93
+7.7%
10.8%US$94.00US$61.00US$76.0924
Sep ’24US$71.73
US$72.45
+1.0%
9.8%US$94.00US$61.00US$77.7725
Aug ’24US$65.85
US$67.77
+2.9%
12.1%US$91.00US$54.00US$76.3125
Jul ’24US$65.28
US$67.05
+2.7%
13.9%US$91.00US$53.00US$67.7425
Jun ’24US$62.19
US$67.09
+7.9%
14.1%US$91.00US$53.00US$66.1524
May ’24US$59.84
US$66.62
+11.3%
15.7%US$91.00US$49.00US$65.3723
Apr ’24US$60.93
US$67.19
+10.3%
15.3%US$91.00US$49.00US$71.7523
Mar ’24US$62.37
US$67.19
+7.7%
15.3%US$91.00US$49.00US$78.6123
Feb ’24US$68.84
US$64.80
-5.9%
16.7%US$93.00US$45.00US$77.8823
Analyst Price Target
Consensus Narrative from 23 Analysts
US$86.44
Fair Value
0.8% overvalued intrinsic discount
23
Number of Analysts

Analyst Forecast: Target price is lower than the current share price.

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Company Analysis and Financial Data Status

DataLast Updated (UTC time)
Company Analysis2025/02/06 22:49
End of Day Share Price 2025/02/06 00:00
Earnings2024/12/31
Annual Earnings2024/12/31

Data Sources

The data used in our company analysis is from S&P Global Market Intelligence LLC. The following data is used in our analysis model to generate this report. Data is normalised which can introduce a delay from the source being available.

PackageDataTimeframeExample US Source *
Company Financials10 years
  • Income statement
  • Cash flow statement
  • Balance sheet
Analyst Consensus Estimates+3 years
  • Forecast financials
  • Analyst price targets
Market Prices30 years
  • Stock prices
  • Dividends, Splits and Actions
Ownership10 years
  • Top shareholders
  • Insider trading
Management10 years
  • Leadership team
  • Board of directors
Key Developments10 years
  • Company announcements

* Example for US securities, for non-US equivalent regulatory forms and sources are used.

Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more.

Analysis Model and Snowflake

Details of the analysis model used to generate this report is available on our Github page, we also have guides on how to use our reports and tutorials on Youtube.

Learn about the world class team who designed and built the Simply Wall St analysis model.

Industry and Sector Metrics

Our industry and section metrics are calculated every 6 hours by Simply Wall St, details of our process are available on Github.

Analyst Sources

Cognizant Technology Solutions Corporation is covered by 69 analysts. 24 of those analysts submitted the estimates of revenue or earnings used as inputs to our report. Analysts submissions are updated throughout the day.

AnalystInstitution
Nitin BhasinAmbit Capital
James KelleherArgus Research Company
Christopher HickeyAtlantic Equities LLP